INSIGHT: US pulp mill could be model for biobutanol's emergence

28 July 2009 16:46  [Source: ICIS news]

By Ryan Hickman

HOUSTON (ICIS news)--At the Old Town Fuel & Fiber mill in Maine, the US, the once-thriving bathroom tissue and paper towel-producing plant is striving to emerge as both an economic and scientific model for a burgeoning second generation of alternative fuels.

Still in its infancy on the biofuel front, Old Town is working on transforming the current pulp and paper mill into a one-of-a-kind pilot biobutanol production facility that would integrate its existing operations in paper making with its foray into transforming wood waste into renewable fuels.

The second-generation fuel has been touted as a superior product to the once-popular but ever controversial ethanol, the biggest name of the first-generation biofuels.

Biobutanol's promoters point to its low vapour pressure compared with corn-based ethanol, thereby making it easier to mix with gasoline. It is also a closer match to gasoline's energy DNA than ethanol, making it more attractive to run through the current gasoline delivery framework.

"In terms of the advantages, you can use it readily in existing infrastructures [such as] gasoline pipelines, and on the automotive side you can use it in traditional engines as well," said Divya Reddy, a biofuels analyst with Eurasia Group.

Biobutanol does have its downfalls, however, Reddy said.

Ethanol produces greater fuel yields from agriculture feedstocks than biobutanol.

"On the corn side, you get more from ethanol than from butanol," Reddy said.

Biobutanol can be made from farm-field raw materials such as corn and sugarcane, as well as waste biomass and switchgrass, but Old Mill's process capitalises on extracting cellulose, or sugars, from wood chips in the pulping process already taking place at the mill.

"I relate it to pulling maple syrup out of a hardwood tree," Old Town Fuel & Fiber mill president Dick Arnold said.

But what sets Old Town's operations apart from the numerous biofuel ventures that have been snowed under by start-up costs is that the current facility is producing cash flow with sales of pulp and paper.

Even though the domestic paper industry is lagging amid low-cost international competitors chewing up US market share, the costs of moving to biobutanol at Old Town can be cushioned by the existing income, Arnold said.

In addition, the nuts and bolts of the plant are poised for an easy transition to biobutanol production.

"We have the resources in place in terms of space availability, permitting, waste water treatment, steam and power," Arnold said. "We can integrate into an existing facility and gain all the benefits of it. It's creating value from an existing raw material supply that is already used in the pulping process."

Additionally, Old Town has learned from having already taken a shot at the biofuel business.

The giant US paper-maker Georgia-Pacific ran toilet paper and tissue out of the plant until November 2006 when it sold the mill to Red Shield Environmental.

Red Shield teamed up with the University of Maine to embark on turning the mill into an ethanol facility, financially bolstered by a US Department of Energy (DOE) grant in the tens of millions of dollars.

Soon after, the coffers dried up and the project filed for bankruptcy, mired by the difficulties associated with ethanol production.

"We were faced with the economics of ethanol and struggles the ethanol industry was going through," Arnold said. "Cost of production, transportation issues, corn ethanol and the issues of feeds. We felt we had a better chance of going after second-generation biofuels."

That caught the attention of Patriarch Partners, a US venture capital group that purchased the plant in November 2008 and started the drive towards butanol.

Arnold said the company is in talks with the DOE to receive some of the government's $200m (€140) investment in biorefineries that was announced in December 2008. The government's financial incentives for research and development in advanced biofuels technologies are part of the push to produce 21bn gallons of biofuels by 2022, as laid out in the Energy and Independence Security Act.

The biobutanol initiative at Old Town is slated to cost $75m, Arnold said, with the hope that the DOE would pick up $30m of the tab.

However, Old Town is not the only biobutanol enterprise relying on wood chips.

Cobalt Biofuels is honing in on non-agricultural feedstocks for making butanol, with a pilot plant currently turning wood into the fuel in California.

The plant is a staging site for what Cobalt president and CEO Rick Wilson hopes will be built up into a demonstration facility capable of producing 2-3m gal/year of butanol.  

Cobalt is trying to separate itself in the marketplace with its recent technological developments, Wilson said.

"We couldn't use an existing fermentation process," he said. "The production rate of butanol is just so slow."

Wilson said Cobalt has patented a bio-reactor using waste biomass that accelerates the butanol 30 times from its natural state.

"It looks like something you'd see in a refinery but a biological version of that," the former BP engineer said.

A pulp and paper mill like Old Town would be an ideal site for a reactor that feeds off of wood waste.

Even though Wilson believes in biobutanol's superiority over ethanol, he think the two should be complementary, especially when it comes to gasoline blending.

"We are an enabler of the corn ethanol business," he said.

Oil and gas giant BP has invested in biobutanol, too, with a joint venture alongside chemical major DuPont. The project is aiming to start up a plant in the UK this year.

Back in Maine, Old Town ran a 24-hour trial last week that produced 1,000 lb of extract that could be transformed into butanol.

Arnold said his phone keeps ringing with players in the chemical and fuel sectors on the other end interested in what they are doing at the mill.

But Arnold admitted it would be at least a few years with help from the government and additional technological advancements before Old Town's demonstration plant could be taken to a commercial level and replicated by others at a competitive price point.

"We are confident commercialising technology is going to be the key to it," Arnold said. "We think this will be a commercially viable venture as we move ahead."

($1 = €0.70)

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By: Ryan Hickman
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