OLD TOWN – The biorefinery at Red Shield Environmental LLC, formerly the Georgia-Pacific Corp. mill, could be up and running in 2009 if everything goes as planned.

“We’ve done the preliminary engineering, process design, equipment layouts and staffing needs to implement a biorefinery here at Old Town,” Jennifer Johnston, Red Shield project engineer, said Monday.

The partnership between Red Shield and the University of Maine would produce ethanol, a gasoline additive, and other chemicals as part of the pulp production process.

“We will be diversifying from being just a pulp facility to a biorefinery and special-chemicals producer,” Johnston said.

Other good news at Red Shield includes a new tenant moving into the site’s large warehouse.

Old Town Logistics, a new business not connected to Red Shield, is slated to be on site within the next few weeks to operate the warehouse and allow neighboring mills to store pulp and paper products, Red Shield environmental manager Dick Arnold said Monday.

In continuing with plans to start up the biorefinery, Red Shield officials applied last week to the Department of Energy for a $30 million matching grant. The money would allow for the second phase of biorefinery construction.

Red Shield, which consists of a group of private investors, already has invested more than $2 million in the engineering modifications required to start the operation.

If selected as a finalist, Red Shield officials would travel to Colorado and give an oral presentation this fall, and would find out next February if the company is awarded the money.

The first portion of the project already is being funded by a $10 million research grant that previously was awarded to the University of Maine. UM is partnering with Red Shield in creating the pilot biorefinery plant.

UM researchers have been working on a technique that allows for hemicellulose to be extracted from wood chips before the pulping process.

Red Shield also applied in June for a Maine Technologies Institute grant to help fund the project, which is expected to cost about $60 million. If chosen to receive the funding, Red Shield officials expect to be notified in early October.

The biorefinery would create approximately 48 additional full-time jobs, Arnold said.

“The number of people involved over two or three years is going to be far greater than that,” Arnold said. There is a lot of construction that needs to be done, in addition to jobs created in marketing and shipping.

The largest market for ethanol is south of Massachusetts. MTBE, methyl tertiary-butyl ether, is found in automobile gasoline and has been outlawed in some places because it allegedly causes cancer and has been found in water supplies.

“Right now, Maine doesn’t mandate that,” Johnston said.

Ethanol also is expected to decrease the United States’ dependence on foreign oil.

The second main chemical to be extracted during pulp production is acetic acid, which is food-grade vinegar.

Market studies show there is a need for these chemicals, and others that can be produced as a byproduct of the pulping process.

“We’re hoping to be as local as possible,” Johnston said.