A nonprofit Rumford company is looking at several sites in Maine for a refinery that would turn forest products into clean-burning oil to be used as fuel in electrical plants.
The refinery would be the state’s first and the world’s largest.
The Bangor Daily News reported that Fractionation Development Center is considering Baileyville in Washington County, the Down East and Katahdin regions, Madison, Old Town, Presque Isle and Skowhegan among potential sites for a $45 million refinery, said FDC Executive Director Scott Christiansen.
Christiansen has since told the Sun Journal that Rumford is also a potential site.
The plant would be the first of several to eventually be built in Maine. Each would create at least 60 jobs for processing up to 900 tons of wood a day into bio-oil.
The oil helps to create electricity about as cleanly as natural gas in specially designed plants located near the refineries, Christiansen said.
FDC plans to visit Baileyville on Jan. 16 and Millinocket on Jan. 17 to conduct informational meetings. FDC officials have already visited Millinocket twice. Christiansen said they were drawn to the Katahdin region by its rich woodlands and many experienced forestry workers.
Christiansen told the Bangor newspaper, “All we can engage in at this point is preliminary conversations, but we are doing that fairly aggressively.”
“Approval is a big deal,” Christiansen said Monday. “The citizens have to want it. You don’t want to mess with anybody who doesn’t want you.”
Christiansen said a site could be selected by June. Local and state permitting would follow, and construction would begin by the end of the year. Operations would start within two years.
The first plant is crucial to funding additional projects.
“What can’t be ignored is that the first one caries a lot of risk. When you do the first one, there has to be a significant return on investment. It’s got to be a high number, a 35 to 40 percent ROI,” he told the Bangor Daily News.
“We haven’t found the slam-dunk spot that guarantees the first investment. There are a lot of investors who want to be a fast second. There aren’t that many to plunk down $35 [million] to $40 million on the first,” Christiansen added. “The questions that are left are: How tough is permitting going to be? How can we reduce costs everywhere to attract a first investor? Everybody within a community would have to help.”
A plant would have a huge impact on a region’s economy, Christiansen said.
Sen. Bruce Bryant, D-Dixfield, a member of the FDC Board of Trustees, said he will work to bring a biorefinery to the River Valley region, but the site of the plant is not crucial.
“We’re not hung up on who gets the first biorefinery. There’s enough there for everyone. This is just the beginning of a new sector for the state,” he said.
The site chosen will be the one where all the variables meet, he said. That includes steam and power, and where there is less pressure on the forest. The nine possible sites are near paper mills.
Christiansen said he or Todd Polanowicz, assistant FDC director, have visited most of the sites three times.
“We have to find the place with the highest return,” he said.
The FDC is a spinoff from the River Valley Growth Council, now a separate entity governed by its own board and funded by state grants.
Rosie Bradley, executive director of the RVGC, said she expects the FDC to remain in the River Valley Technology Center regardless of where the first biorefinery plant is built.
Christiansen said a site should be chosen by June, followed by a groundbreaking for a biorefinery within six months or so.
As part of an 18-month study funded by the U.S. Department of Energy and the Maine Technology Institute, the center calls for construction of 50 bioconversion plants in Maine during the next 15 to 20 years, paid for largely by private energy companies.
“We don’t see more than a dozen coming into Maine, but we’re not worried about anything more than No. 1 right now,” Christiansen said.
FDC Ventures, a for-profit spinoff from the nonprofit FDC, also received a $7,200 grant from the Northern Forest Partnership Program, based in New Hampshire, for the development of a business plan to commercialize a bio-oil production system in Maine, New Hampshire and Vermont.
FDC has an as-yet unnamed technology partner that will handle plant operations. The center is also in discussions with investors, he said.
The biorefinery industry has several similar plants operating in Canada.
The Bangor Daily News contributed to this report.
Pyrolysis is defined as the reduction of matter into char, tars, oil and hydrocarbon gas in the absence of oxygen. Its end products are carbon black, oil that can be sent back to a refiner, and some hydrocarbon gases that can be used to make steam or electricity.
Bio-oil is the material from which carbon, in the form of charcoal, and a combustible gas are recovered through “biomass refining,” which is similar to the refining of petroleum crudes that produces a broad spectrum of liquid fuels and value-added petrochemicals.
Charcoal briquettes and some types of tires are made from pyrolysis processes.