OLD TOWN – The future of Red Shield, formerly the Georgia-Pacific Corp. paper mill, is looking even brighter after the company announced Friday it has received a $30 million Department of Energy grant.

The grant was awarded to RSE Pulp & Chemical LLC, a subsidiary of Red Shield Environmental and will allow Red Shield to continue its partnership with the University of Maine to build a pilot plant for ethanol production at the pulp mill.

“Not only will it solidify and grow Red Shield in Old Town with the university, but it will be able to be a model for the rest of the pulp and paper company,” Gov. John Baldacci said Friday in a phone interview. “To be able to do this there is huge.”

The process has significant technical and commercial advantages over competing technologies because ethanol and other chemicals can be extracted from wood chips using existing pulp facility infrastructures.

“This is really the biorefinary that we have been talking about,” Hemant Pendse, UM professor of chemical engineering said. “We have been preparing for this moment, and this shows people how we can take our technology out of the research lab, show it in our university and take it to a larger facility.”

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

“Because the energy resource is produced as part of the pulp-making process, it adds no additional strain to the wood basket and makes more efficient use of the wood fiber,” Baldacci said.

Red Shield applied for the grant last August and is one of three companies nationwide announced today by the Department of Energy to receive the grant funds for ethanol projects. Projects in Vonore, Tenn., and Washington County, Ky., also received funding.

The first phase of Red Shield’s project already is being funded by a $10 million research grant that previously was awarded to its partner, the University of Maine. Red Shield also received in February 2008 a $500,000 grant from the Maine Technology Institute to support the development of the extraction process.

“The first step now is to start the engineering process of what this commercial-scale process would look like ramped up from the lab work UM has done,” Red Shield spokesman Dan Bird said Friday.

He noted that they aren’t sure how many people will be hired to complete the project.

“It’s not going to be hundreds more, but it could be a couple to four dozen,” he said.

A formal announcement of the funding and what the project will entail is expected to be held at 9 a.m. Tuesday at Red Shield.

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