Millinocket hears plan for $45M refinery, jobs

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MILLINOCKET – Town leaders would love having Millinocket host a proposed $45 million refinery that would turn forest products into clean-burning oil and fuel 25-megawatt electrical plants, they said Wednesday.

“It’s all good news,” Town Councilor David Cyr said after a 1 1/2-hour meeting at the former Aroostook Avenue School with Executive Director Scott Christiansen of the Fractionation Development Center, a Rumford-based nonprofit firm promoting Maine biomass technologies for the Legislature.

“At first glance, it seems like it would be a good fit for the region,” Town Council Chairman David Nelson said. “It appears at this stage that they have done their homework.”

“It’s an exciting type of new business that we need here,” Councilor Jimmy Busque said.

FDC imagines a pyrolysis refinery and accompanying 25-megawatt electrical plant would be the first of several such tandem operations in the state. Each could create about 50 jobs, 20 for harvesting 800 to 900 tons of low-grade wood, such as hog-fuel, sawdust or chips, per day for the 30-worker plant to process into bio-oil, Christiansen said.

The bio-oil would fuel the creation of electricity about as cleanly as does natural gas in specially designed plants located near the refineries – preferably within 50 to 70 miles.

As many as 50 more jobs would be indirectly created, he said.

Millinocket is among the top four contenders out of nine Maine towns or areas being considered as a first site by FDC and its as yet unnamed technical partner, Christiansen said.

If all goes well, site selection will occur by June, with permitting afterward, construction beginning by year’s end, and operations starting within two years.

Baileyville, Lincoln, Madison, Old Town, Presque Isle and Skowhegan are other areas being considered.

“It’s all about access to wood, to workers and to community and to transportation to get the product out and where you are going to find that in the state of Maine,” Christiansen said.

Pyrolysis is the reduction of matter into char, tars, oil and hydrocarbon gas in the absence of oxygen. Its end products are carbon black, oil that can be sent back to a refiner, and some hydrocarbon gases that can be used to make steam or electricity.

Bio-oil is the material from which carbon, in the form of charcoal, and a combustible gas are recovered through “biomass refining,” which is similar to the refining of petroleum crudes which produces a broad spectrum of liquid fuels and value-added petrochemicals.

Charcoal briquettes and some types of tires are made from pyrolysis processes.

Katahdin Paper Co. mill manager Serge Sorokin, five councilors, Medway businessman Dick Day, planning board member Avern Danforth and members of the board of directors of the Millinocket Area Growth & Investment Council attended the meeting, among others.

No one spoke against the project.

Christiansen described the bio-oil refinery process as technically solid, with several much smaller plants producing oil in Canada, yet risky for investors who typically seek a 35 percent or more return on their investment in such a first-time operation.

“What we are trying to do has been done, quite a bit, but not at this scale,” he said. “It is difficult to convince investors to create a fuel that doesn’t have an established market yet.”

The project needs private investors, not municipal capital funding, but Christiansen met with the leaders to gauge their receptiveness. Community support is crucial since a lack of it can repel investors or increase costs.

Yet he encouraged residents and leaders to “ask the questions nobody wants to ask.

“Ask them now and approach it [the project] reasonably and have discussions within the community and decide whether you have confidence in the science and whether you want it to be here,” Christiansen said. “You owe it to yourselves, if you don’t mind my saying so … to not just say yeah, we want jobs, or say yeah, we want this.”

Among the potential risks: The project might offer competition to Katahdin Paper mills in East Millinocket and Millinocket. Initial research indicates enough product in Katahdin for both, but the refinery needs wood and sawdust, possibly increasing harvesting prices, Christiansen said.

“I don’t think there’s any mill in Maine that wants anything within 50 miles of itself that uses a wood chip,” Christiansen said. “On the other hand, Millinocket is at the end of the Golden Road. A lot of wood comes through here.”

The last thing the project needs is a bidding war, he said.

“We are not going to go anywhere where we think our business costs are going to escalate,” he said. “We would need to sit down and explain to the community leaders and the community that we [paper mills and refineries] won’t be cutting each other’s throats.”

The refinery and plant could partner with paper mills or other sizable wood-product industries, selling them electricity and bio-oil, which could eventually replace the No. 6 oil paper mills use. Such a partnership has been discussed with Lincoln’s tissue mill.

FDC is discussing partnering with the University of Maine and its biorefinery energy programs because the proposed refinery is a platform that might eventually create many more products, everything from pharmaceuticals, plastics and new types of gasoline.

But those technologies are still fledgling. FDC wants to produce bio-oil for electricity because that approach would be most workable, market-ready and alluring to investors. That’s why the electrical plant would need to be on the New England power grid, Christiansen said.

FDC wants to work with its host communities, Christiansen said.

“We are in Maine to open a sector in our economy,” he said. “We are not here to wring Millinocket dry to bring some jobs here.”

Fast facts

WHO: Fractionation Development Center, a Rumford-based nonprofit firm founded in 2004 to promote Maine biomass technologies for the state Legislature, and an unnamed technology partner.

WHAT: A pyrolysis refinery and 25-megawatt electrical plant (enough for 17,000 homes) with few emissions, no net increase in greenhouse gases.

WHERE: Six to 10 acres near at least 90,000 gallons of water daily, wood flows and an adequate electrical transmission line.

WHEN: Site selection by June, construction by end of year.

REQUIREMENTS INCLUDE: An adequate workforce, receptive host community, access to 850 tons of hog-fuel, sawdust or chips, and investors.

WHY: Non-polluting alternative energy development involving forest products, creation of as many as 100 full-time jobs.

SOURCE: Presentation and mainefdc.org