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Critical biomass
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The economics are building for cellulosic ethanol production in the New North
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By Sean Johnson, March, 2010
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The NewPage paper and pulp mill could become the centerpiece of cellulosic ethanol development.
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When Jan Hacker looks at the bleak and shuttered former NewPage paper mill in Niagara, she sees an opportunity to jump-start the new economy right here in Northeast Wisconsin.
Hacker, a consultant for St. Paul-based Resource Analytics, recently prepared a two-part feasibility study showing both the capability and the interest in converting the former mill to a cellulosic ethanol plant. Cellulosic ethanol is a biomass fuel produced from wood, grasses and other non-edible plant materials. While still considered an emerging process, many think biomass is the next generation of ethanol production and that it may have significant environmental benefits over traditional row crop ethanol production.
While Hacker’s study is detailed, she says all you have to do is look at the old plant and its surroundings to see the economic benefits of converting the plant to ethanol production.
“It already has many of the features that you would need for such a facility,” Hacker says. “All of the logistical infrastructure is already in place.”
Key components to any production facility already exist at the former mill in Niagara.
Rail service, which is necessary to bring raw materials in and ship the finished product out, is already available. Raw materials are plentiful, because the timber that was part of the mill’s supply for pulp and paper has not found new markets. The sorting yard is still intact and the building has the capacity to handle the large machinery necessary. And, the region has a tradition of industrial processes involving wood and agriculture.
“You have everything in place to bring the raw materials in and ship the product out,” Hacker says. “Why build it when it is already there? I just think there is great opportunity for that site.”
While still in its infancy, the bio refining industry has taken some important steps both regionally and nationally, Hacker says. A commercial-scale production facility is under construction in Michigan, and several former paper mills in the region, including Wisconsin, are being considered for conversion to refineries.
Wisconsin currently has nine ethanol plants in operation, producing just under 500 million gallons of ethanol a year. The plants presently in operation primarily produce ethanol using grains such as corn.
Energy consultant Marc Hess says a critical mass is approaching with biofuels, which can be particularly attractive because many of the technologies being explored provide a beneficial use for an industrial waste product. Hess is working on several small demonstration projects in the area.
“We are looking to develop some of these to the point where there would be commercial viability,” says Hess, president and CEO of IEP Development, a venture of the Oneida Seven Generations Corp. “The goal is to get to the point where we can attract venture and government funding.”
Most of the projects pursued by IEP range from one to 10 megawatts and are usually co-generation projects an industrial customer might use to convert a waste-product into energy to reduce their demand. One project in development would involve the gasification of a municipal solid waste stream to generate both electricity and reduce the amount of waste going into a landfill.
“There is ample opportunity here,” Hess says of biomass. “We are still in the due diligence phase.”
That’s probably also the next phase for the Niagara site should a developer express an interest in the shut-down pulp mill. Josh Morby, a spokesman for New North, which commissioned the studies, said there has been interest, but nothing definitive yet.
“Cellulosic ethanol could still be described as emerging,” Morby says. “As it becomes more commercially viable, that site’s value increases.”
The NewPage mill in Niagara closed its doors in 2008, with nearly 300 losing their jobs. New North has been working with community leaders to find alternative uses for the facility. New North Executive Director Jerry Murphy says the Niagara mill represents a unique opportunity because of the logistical infrastructure that could quickly adapt to a new use as a bio refinery. It could also be an important lesson on how to position the regional economy to take advantage of its role in the paper and pulp industry.
“The longer view is how can we reposition to take advantage and capture value out of what is now a waste stream,” Murphy says. “We can really create some new opportunities.”
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