Recipes for new fuels reviving Maine's mills

Vast forests again pose rich resource

Pellets compressed from sawdust are sent by conveyor to a cooling processor in Corinth, Maine. (Michael York for the Boston Globe)

CORINTH, Maine - Over a lifetime working in the forest products industry, Randy Irish watched mills fail and friends lose jobs. It finally happened to him, after 32 years, when Georgia Pacific shut its paper mill near this northern Maine town.

But two years later, Irish has a new future at a new mill. The product this time: energy.

Irish, 54, is plant manager for Corinth Wood Pellets LLC, which turns sawdust into wood pellets for heating stoves and is one of several energy start-ups that Maine officials hope can boost a struggling economy that has long depended on forests, fishing, and other natural resources. As employment in traditional industries, such as papermaking, has declined over the years, Maine officials have sought other ways to generate jobs in northern rural areas, where the unemployment rate may be double that of the state's more urban south.

Alternative energy offers new opportunities to tap Maine's natural resources. The state's vast forests, for example, could provide feed stock for renewable fuels, such as ethanol and biomass, and the wood and other organic materials can be burned to generate electricity, steam, and heat. There's also the power of wind on isolated ridges and of tides along its coastline.

"We want to be a major green energy producer," said Jack Cashman, senior economic adviser to Governor John Baldacci. "We're the most heavily forested state in the nation, and we plan to be players."

About 20 miles east of Corinth, Red Shield Environmental restarted the former Georgia Pacific plant in Old Town and rehired nearly 200 workers as it gears up to make wood-based ethanol, which could be blended with gasoline to reduce prices at the pump as well as the need for foreign oil. Near Penobscot Bay, Maine Maritime Academy is a key member in a public-private partnership to harness the power of ocean tides to generate electricity.

Horizon Wind Energy LLC of Houston plans to invest up to $1.6 billion by 2012 to develop several wind energy projects in Aroostook County in northernmost Maine, creating hundreds of construction jobs to build wind farms and nearly 100 permanent jobs to operate them. In Bangor, Hallowell International has tapped another resource, brain power, to develop advanced technology to manufacture electric-powered heat pumps that the company says dramatically lower residential heating bills.

Meanwhile, Corinth Wood Pellets, which reopened a shuttered lumber mill in 2007, has doubled production and employment since the beginning of this year, and expects to double both again by the end of the year. The company now employs about 30.

"Demand is off the charts," said George Soffron, the company's chief executive. "People just want to get away from oil."

The markets for alternative energy are likely to grow because oil prices, despite their recent retreat, are expected to remain high. State and federal governments are mandating that utilities use increasing amounts of renewable sources, including wind, solar, and biomass, to generate electricity. They also are requiring higher concentrations of biofuels to be blended with gasoline, diesel, and heating oil to reduce reliance on fossil fuels. And since the production of biofuels from corn and soy is blamed for rising food prices, governments are encouraging the development of fuels made from nonfood crops such as wood.

Red Shield has a three-part plan to turn the old Georgia Pacific mill into a biofuel refinery. First, make pulp used for higher-end products such as clothing. Next, burn wood waste to run an existing biomass-fired power plant to run the mill and to sell electricity to other businesses. Third, produce ethanol from a waste component of pulp-making known as hemicellulose.

The University of Maine developed the process to extract and refine ethanol from hemicellulose. Since the feed stock is essentially free, Red Shield could make ethanol for less than $1.30 a gallon, according to chief executive Ed Paslawski. Red Shield, which won a $30 million grant from the Energy Department for the ethanol project, expects to begin production in about two years and make about 5 million gallons a year.

Still, no one expects it to be easy. Earlier this summer, for example, Red Shield shut down its pulp operation because of a shortage of wood chips and filed for bankruptcy protection because pulp making, while only one part of the eventual operation, is the main revenue producer while Red Shield develops the energy components.

The chip supply problems have eased, and Red Shield lined up $13.6 million in new financing. It expects to emerge from bankruptcy and restart the mill later this month.

Dan Bird, who has worked at the mill for about 30 years, has experienced such ups and downs before. A former union official, he survived several ownership changes, a near closing by Georgia Pacific in 2003, and the final shutdown in 2006. He was part of the union team that negotiated the reopening of the plant under Red Shield, and later was hired as the plant's human resources manager.

For Bird, the mill represents more than a job. His family has worked there almost from the day it opened more than a century ago.

"These alternative energy ideas, hopefully, will keep us around for another 150 years," said Bird, 51. " My grandfather worked there, my great-grandfather, great-uncles, and great-great uncles, so I'm tied to the mill pretty well."

Duane Hallowell thought he would someday take over his family's Washington County lumber mill, but just as he graduated from high school in the early 1990s, the mill shut down, costing some 70 jobs. Instead Hallowell went into the Navy, where he developed expertise in heating and cooling systems, which ultimately led him to heat pumps as alternatives to oil and natural gas systems. Heat pumps are sort of reverse air conditioners that turn cold air into warm.

Hallowell, who founded Hallowell International three years ago, said he remembered his family's lumber mill and the lost jobs when he decided to manufacture heat pumps in Bangor. While heat pumps have typically worked only in mild climates, such as the South, Hallowell's technology has made them effective in cold climates and efficient enough to cut household fuel bills by 60 percent at current prices, according to the company's testing.

Sales have jumped sixfold over the past year, Hallowell said, and employment has tripled to about 30.

"Growing up with the lumber mill, it was a point of pride for my family, bringing good jobs to the area," said Hallowell. "That's what I wanted to do."

Lumber mills have brought jobs to Corinth since the 1830s, according to local historians. The Corinth Wood Pellets plant had made pallets and produced lumber for about 40 years before it shut down in 2006.

Corinth Wood Pellets hired Randy Irish to manage the mill earlier this year. Irish not only got the chance to resume his career, but also to restore a connection to the Maine woods that reached back to his childhood in Aroostook County.

Irish spent summers in those woods, driving horses to haul the timber his father cut for lumber and paper mills. His father, Irish recalled, taught him to recognize the different species of trees, preached against clear-cutting, and impressed upon him the importance of preserving forests.

"I always knew I would get back into forest products," Irish said. "It kind of gets in your blood."

Robert Gavin can be reached at rgavin@globe.com.