OLD TOWN – RSE Pulp & Chemical LLC, a subsidiary of Red Shield Environmental, intends to use grant funds it received from the Maine Technology Institute to continue research and development efforts to integrate the University of Maine’s patent-pending process to create alternative fuels and chemicals from wood chips.

The process has significant technical and commercial advantages over competing technologies because the hemicellulose can be extracted from wood chips using existing pulp facilities infrastructures.

The $500,000 in MTI funding is coupled with $1.1 million in matching funds from the pulp company.

MTI, of Gardiner, was created in 1999 by the Legislature to encourage, promote, stimulate and support research and development activity leading to the commercialization of new products and services in the state’s technology-intensive industrial sectors, according to the organization’s Web site.

The competitive Development Awards are presented three times a year by MTI to support companies in their early activities for product development, commercialization, or business planning and development.

The technology involved in Red Shield’s project to create a biorefinery pilot plant that would use wood chips to create alternative fuels fits into the country’s goal of finding alternative energy sources and reducing its dependency on foreign oil.

In addition to the MTI grant, Red Shield officials said Friday they’re waiting to hear if they’ve been selected to receive a $30 million matching grant from the Department of Energy.

The money would allow for the second phase of biorefinery construction. 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 biorefinery pilot plant.

“We’re in the short list of companies that have been selected,” Red Shield plant manager Dick Arnold said. “From our understanding, there’s about 10 companies in this short list.”

Of those 10, four companies already have been selected to receive funding. From the remaining six companies, Arnold said, he believes three will be chosen by the DOE to receive awards. The department is reviewing additional information submitted by each entity and is expected to make its final decision in the near future.

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