Patty Loew:
Two years ago "In Wisconsin" brought you news of a $40 million US energy department grant. Flambeau River Papers got the grant to produce fuel from wood by-products. Art Hackett is still on the money trail and has an update on a hot idea in Park Falls.

Art Hackett:
This is a story about the old and dreams of making the old new again. First, the old. People have been making paper at the Flambeau River mill in Park Falls since the 1890s. The plant is small and a bit of an antique. In fact, this paper making machine still in use today dates back to 1905, the one next to it was installed in 1919. The mill has operated under a number of different owners throughout the years providing 300 of the better-paying jobs in a community of about 2,500 people. But in 2006 the mill's owner went bankrupt and the plant closed.

William “Butch” Johnson:
We really wanted to start where we could get somebody else to buy the mill.

Art Hackett:
William “Butch” Johnson was involved in the bankruptcy proceedings because the old owner owed him money.

Butch Johnson:
As we worked for it, it became obvious the people trying to liquidate the mill didn't want to reopen it.

Art Hackett:
Johnson is a modern-day timber baron. He was a major supplier of wood for the plant and owned the chippers that processed logs into pulp. To avoid the fate of the previous owner, Johnson had to improve the plant's bottom line.

Butch Johnson:
Natural gas is one of the things that sunk the previous owner.

Art Hackett:
This is where the old made new again part of the story begins. Engineers rearranged the plant's plumbing. The mill now uses waste heat from inside the plant to bring water from the Flambeau River up to temperature so it can be used in the paper-making process.

Butch Johnson:
Conservation saved us that kind of money. Probably a $7 million savings over the course of time. That's a big number. And it also...

Art Hackett:
$7 million over how long?

Butch Johnson:
Per year.

Art Hackett:
Then there is the other fuel source for the paper mill, wood.

Art Hackett:
Flambeau River doesn't just use wood to make paper, the mill actually runs on wood. They take bark and small scraps, grind it up and burn it in a boiler along with coal to make steam. Now the mill has a new idea, taking the wood and using it to make what the Beverly Hillbillies called black gold or Texas tea. Flambeau's initial efforts to make the plant more energy efficient brought him in touch with Clean Tech Partners in Madison. It used to be called the Center for Technology Transfer. Clean Tech is headed by a former researcher at the US department of agriculture's forest products lab, Masood Akhtar.

Masood Akhtar:
Right in that meeting I had with Butch we had a copy of the deal he proposed and I said hey, if you're going to reduce your manufacturing cost, we can help you focus on energy program short term but the long term goal is going to be that you should be looking into this producing liquid transportation fuels.

Art Hackett:
Liquid transportation fuels created out of the wood.

Bob Byrne:
Did I think it was off the wall? No, we didn't violate laws of science or nature, but it was not something that I would have considered as a paper mill executive in any other paper company.

Art Hackett:
Bob Byrne had worked at the Park Falls mill years ago. He was nearing retirement when Butch Johnson hired him as the mill's chief engineer. Currently the mill simply burns wood in a conventional boiler along with a small amount of coal. Steam from the boiler powers the plant. In the future, the heat to generate steam will come from a device called a vaporizer. It will also run on wood.

Bob Byrne:
We're going to take wood and dry it and we're going to put it in a pressure tank and we're going to add heat and change that wood into a gas. And that gas is a hydrocarbon gas which is what wood is made of, then we'll send that gas to a reactor which is like a big heat exchanger and a liquid will come out and a solid material like wax will come out and that liquid material will look a lot like diesel fuel. Simple process.

Art Hackett:
The diesel fuel can be used as is to power trucks and equipment. The waxy material, paraffin, can be sold to oil refineries and turned into a variety of petroleum products.

Butch Johnson:
There is not a better spot to open up a refinery-type operation that we're doing than a biodiesel plant in a paper mill.

Art Hackett:
Akhtar said paper mills aren't doing this to be in the oil business on the side. Paper makers are interested in something the biorefinery generates in the process of making oil, lots and lots of heat.

Masood Akhtar:
Any time you produce steam, BTU, to replace natural gas they can use it to reduce their cost. Once they do that, then basically they become competitive for even the product they're making, which is pulp.

Art Hackett:
This will cut your gas bill.

Butch Johnson:
We'll have zero gas bill. We will not have any natural gas cost. All the mill will be heated off of wood, 100%.

Art Hackett:
No coal, no gas.

Butch Johnson:
No coal, no gas. And excess electricity will also be produced at the same time.

Art Hackett:
It sounds like fantasy, something that is too good to be true. But the process, it turns out, is also a case of the old made new. It is known as the Fischer-Tropsch process named for the two chemists who invented it dating back to pre-World War II Germany.

Art Hackett:
This actually process...

Bob Byrne:
It's old technology. The difference is, it didn’t pay. The economics weren't there when oil was $40 a barrel, it didn't pay. Now when oil is more than $100 a barrel it has a good return.

Art Hackett:
As for environmental issues the process has some inherent advantages over current technology. According to a renewable energy advisor, emissions from existing boilers go up the stack. In the case of the proposed biorefinery, emissions are intentionally captured since they would be used to produce the biofuels. Flambeau River and another mill, New Page Papers in Wisconsin Rapids are working together on the project since both mills are exploring the same process, though in different scales.

Masood Akhtar:
The US department of energy thought that if they can -- these guys can actually demonstrate at paper mills at a 10% commercial level, then venture capitalists will start believing in it because you can scale it up to 100%.

Art Hackett:
Even before his mill won the grant Johnson was convinced the technology would work on an industrial scale.

Butch Johnson:
I know we can do it on an industrial scale, and we'll do it.

Art Hackett:
Bruce Johnson is banking on the biorefinery to help keep open a mill that has already closed once.

Butch Johnson:
I think this mill means $20 million in payroll and benefits. That's a pretty good number. You look at the amount of wood that it purchases and you are talking 140,000 to 150,000 cords of wood. That’s another $12 million.

Art Hackett:
A mill that means a lot to Park Falls.

Patty Loew:
Construction on the biorefinery is set to begin in December, pending final approval of federal grants and loan guarantees.