the ownership of former investment banker Lynn Tilton, a once-shuttered
pulp mill in Old Town, Maine, is shooting to commercially produce
aviation fuel from wood.
A New York City-basedfinancier wants to make aviation fuel from wood
using extracts from wood chips typically used in the pulp and paper
process—and she is moving ahead aggressively to reach that
Tilton's pulp mill in Old Town, Maine, has a plan to begin commercially
producing bio-butanol within two years, some of which would be used as
fuel for helicopters the savvy former investment banker owns.
the plan succeed, the Old Town pulp mill would be the first integrated
facility in the world capable of producing both pulp and
would mark a significant milestone for the forest products industry in
Old Town, on the banks of the
Penobscot River. The operation began as a sawmill in 1860, evolved into
a pulp and tissue mill, and is now being transformed into a pulp and
bio-fuels plant on the leading edge of society's transition from a
fossil-fuel based economy to a society that is more and more embracing
renewable alternative fuels.
company is working closely with the University of Maine to investigate
and implement the technology needed to build a commercial bio-butanol
is related to ethanol but is less corrosive on pipelines, easier to mix
with gasoline, and has about 30 percent higher energy content. One
knock against ethanol derived from feedstockssuch as corn is its
corrosive impact on pipelines.
turnaround specialist Lynn Tilton rescued the pulp mill from bankruptcy
in 2008 through her company, Patriarch Partners, and made a $40 million
investment in the mill. The company has a history of investing in
troubled businesses, and the pulp mill in Old Town certainly qualified.
For many years, Georgia-Pacific manufactured pulp in the mill under the
Northern Tissue brand of products but decided to close the mill in
2006, putting about 460 employees out of work.
long after, a company called Red Shield bought the pulp mill and
partnered with the University of Maine in a Forest BioproductsResearch
Initiative. A joint proposal to the United States Department of Energy
yielded a $30 million grant to work with the university on a pilot
ethanol production plant. However, Red Shield ended up filing for
bankruptcy in 2008, and that's when Patriarch Partners stepped in to
operate the pulp mill as Old Town Fuel and Fiber.
owner Tilton managed to get agreement from the local union for pay cuts
in exchange for steady jobs over the short term to ensure the pulp mill
could operate. Within six months, pulp prices and productivity gains
allowed wages to return to previous levels, and now she has her eye on
another prize on the horizon—bio-based aviation fuel.
addition to producing 600 tons of pulp per day, Tilton has directed
mill management to investigate the technology and build a bio-fuels
production plant at the pulp mill. It would initially produce about 1.5
million gallons of bio-butanol from extract removed from 80 bone dry
tons of wood per day. The plant is expected to cost about $75 million,
financed through a combination of company and U.S. federal government
funding. The federal government has already committed $30 million
toward the project, which must be matched by the company.
is banking heavily on the federal government aggressively pursuing its
goal of domestic companies producing 21 billion gallons of bio-fuels by
2022, and also that legislators will require fuel producers to include
a percentage of bio-based fuel in their conventional fossil fuel
owner of Old Town Fuel and Fibre Lynn Tilton (above, with long blond
hair), has directed mill management to investigate the technology and
build a bio-fuels production plant at the pulp mill. It would initially
produce about 1.5 million gallons of bio-butanol from extract removed
The bio-fuel produced
at the pulp mill could also find a market within Tilton's own stable of
companies, as she owns MD Helicopters, originally founded by Howard
So far, the pulp mill has progressed to installing the feedstock
extraction process at its front end and has built a bio-fuels
production pilot plant. It hopes to have a commercial plant operating
in about two years.
Jim St. Pierre, the company's bio-refinery project manager, says the
existing infrastructure surrounding pulp production makes the company's
consideration of a bio-fuels manufacturing facility possible.
Integration of both processes is key to its economic viability.
"If this was a greenfield plant, there is no way that anyone could
afford that kind of investment," he says. "I think it's important to
understand that it's not something you can start on day one and say
that you are going to build a facility."
St. Pierre acknowledged there is still quite a lot of work to do to
have the bio-butanol produced at the pulp mill certified by
transportation experts at the Environmental Protection Agency (EPA) as
an aviation fuel or as an additive to fossil fuel-based aviation fuel
Several local companies have been approached about taking the fuel
manufactured by the pulp mill, and while they don't anticipate an issue
blending the bio-butanol with conventional fuel, they are awaiting
approval on the product and its use from regulatory agencies.
So far, activity at the pulp mill to produce bio-fuels has not caught
the attention of the fossil fuel industry, and St. Pierre thinks that
is because they are a small player in the marketplace and still have to
prove their process.
The northern hardwood chips for manufacturing both pulp and bio-fuels
are supplied under contract by other forestry companies located in the
surrounding area, and St. Pierre emphasized that the extract must come
from hardwood, not softwood.
A ‘pre-hydrolysis' process—which has already been
constructed and installed before the pulp production
process—produces the extract that includes such material as
lignin and hemicellulose that will be used in bio-butanol production.
"The process is probably commonly known, but not applied," says St.
Pierre. "We have developed the technique here to apply it within our
process. If you have the right equipment and process knowledge, it
certainly is very possible to do it." He says the fact that the pulp
mill has actually gone ahead and built an extraction facility is what's
very unique about this situation.
St. Pierre says the pulp mill's partnership with the university has
been invaluable, as they provided the necessary technology and
innovation that led to early versions of the company's pre-hydrolysis
system. The university has also been able to advise the company on the
technical viability of various processes being considered.
"They have been a willing and resourceful partner through every turn we
have made since the beginning of this process," he says. The pulp mill
has in fact hired one of the key researchers from the University of
Maine, "because we see this as a long term engagement, not a short term
Tilton at the Old Town Fuel and Fibre mill (at left), talks about the
potential markets for bio-fuel. The bio-fuel produced at the pulp mill
could find a market within Tilton's own stable of companies, as she
owns MD Helicopters, originally founded by Howard Hughes.
As to the economic viability of the proposed technology, St. Pierre
says it will be up to the company to decide whether to implement it.
The pre-hydrolysis process will consume about 10 percent of the wood
chip feedstock serving the pulp mill. There are 1200 bone dry metric
tons of wood chips arriving at the plant every day. To date, the pulp
mill has produced up to five percent extract from the wood chips, which
so far has been conditioned and processed into sugar at the pilot
plant. Researchers have not yet fermented the material at the pilot
plant into bio-fuels but are working with other technology companies to
better understand what opportunities are available to Old Town Fuel and
Fiber from the extract.
They plan to have the pilot plant fully integrated into the pulp mill
by the end of the year, to be able to manufacture small amounts of
bio-butanol on site, which will also allow them to show their product
to potential customers. In addition to the building blocks needed to
produce bio-butanol, the pre-hydrolysis and fermentation processes will
also allow the pulp mill to remove other valuable chemical products
such as acetic acid, acetone, and formic acid from the extract. St.
Pierre emphasizes that the direction they have been given from Tilton
is to focus specifically on manufacturing aviation fuel from wood.
Removal of hemicellulose as well as other chemicals such as lignin from
the wood fiber has not had a negative impact on pulp quality, although
the company has had to modify its bleaching process and witnessed a
small percentage of yield loss.
The U.S. government has set an aggressive target for domestic bio-fuels
production. And it seems that if anyone from the business world is
capable of helping them meet that target, it may be the sometimes
flamboyant and extremely bright Lynn Tilton.
In 2005, Tilton, who has been known to attend trade shows wearing a
leopard-skin dress with knee-high boots, purchased MD Helicopters at a
significant discount. The company didn't manufacture a single
helicopter its first year under Tilton's leadership, but went about
moving the manufacturing of parts in-house to quell complaints from
unhappy existing customers. By 2008, the company delivered 50 new
Tilton also bought the floundering Spiegel catalogue business, which
was established in 1905, and launched an aggressive plan to market its
products on-line. Tilton is a fan of vertical integration, and many
products manufactured by other companies she owns are now sold through
Launched in 2000, Patriarch Partners is reported to have equity
interests in over 70 companies and controlling interest in about
two-thirds of those companies.
It seems that news of the death of good old Yankee know-how may well
have been exaggerated, if Tilton and the Old Town employees are any
indication. They are hoping to show that a blend of old and new
industry—and a lot of New England initiative—may be
the best path forward to expand bio-fuels manufacturing capacity in