What are some alternative uses for the Franklin mill?

Published 9:03 am Friday, November 13, 2009

FRANKLIN—Experts in the paper, pulp and forestry industries, along with economic development officials, say the International Paper Co. paper mill site could have a myriad of uses once its days of making paper are over.


The most popular option, or at least the one that is being mentioned most frequently, is the generation of power from biomass.

“Biomass is a very generic term,” Charlie Becker, a utilization and marketing manager with the Virginia Department of Forestry, said Tuesday. “It’s just woody materials — small branches, tops, residues, bark, as opposed to timber. It’s anything that’s organic.”

“Essentially anything you can make out of wood you can also make out of oil. They’re looking at potentially using a lot of the facilities because a lot of the pulp and paper companies have a lot of that material where they break down wood into different components and then put it back for paper and other chemicals.”

John Smolak, president and CEO of Franklin Southampton Economic Development Inc., agreed, adding, “Biomass fuels and biomass energy certainly would be good possibilities because of the existing infrastructure that could be left at the plant that currently is used for power energy generation now within the plant.

“Certainly all of the other wood handling equipment could also be used for surveying other users.”

Wood pellets

The manufacture of wood pellets for residential and industrial use, both domestically and abroad, is another possibility.

“It’s quite a strong market in Europe,” Becker said. “There’s more and more of a developing market in the U.S. too. We have five or six pellet plants in Virginia already, and a couple more are planned. A lot of them are associated with a sawmill, where they can use a lot of their residues.”

According to the Pellet Fuels Institute, a non-profit association based in Arlington that serves the pellet industry, pellet mills across the country manufacture wood fuel pellets from wood and other biomass waste products. Sawmills provide some of this wood to pellet mills, which in turn sort, grind, dry and compress the wood into a pellet form.

“The scale of these (pellet) plants are much smaller than a pulp and paper mill,” Becker cautioned. “You’re probably talking about a tenth of the size or less.”

The online Wood Pellet Fuel Organization reports that in 2008 there were approximately 850,000 American homes using wood fuel pellets for heat, in stoves, fireplaces and furnaces. Pellets were also being used in schools and factories.

Cellulosic ethanol

Another option is the production of a chemical called cellulosic ethanol, a biofuel that can be produced from various sources of cellulose: wood, grasses and agricultural waste.

“It’s more expensive to make right now than corn ethanol,” said Terry Godwin, a forestry consultant with GFER Forestry Consultants PLLC. “That should be overcome in a few years, but they’re just not there quite yet.”

Government grants, including $385 million from the U.S. Department of Energy in 2007, have been awarded for companies to build small-scale cellulosic ethanol plants to learn how to produce the chemical better and extract it cheaper.

“Every month they’re making strides,” Godwin said. “It’s only a matter of time until that product becomes within the realm of possibility.”

Godwin added that if gasoline were $4 a gallon, cellulosic ethanol would immediately become a more attractive option. Legislation on emissions trading, also known as “cap-and-trade,” would also give the market for cellulosic ethanol a boost.

“Ethanol producers are scared to put any money into a facility until they know that they’re going to be supported with some minimum pricing level,” Godwin said. “If cap-and-trade legislation goes through, then a lot of these things become a possibility because the law mandates that you have to reduce your carbon footprint. Wood is a good way to start with that.”

A combination of these

Then there is always the possibility of not one but several of these industries taking up residence at the 1,370-acre paper mill site.

“The facility could be a green complex,” Godwin said. “You could do all these things on one site potentially. We’ve got the logging infrastructure and we’ve got the wood. We just need the facility.”

Said Smolak: “There’s a potential for some kind of biomass industrial park that could service a lot of different industries within a close proximity to each other. I think there’s a lot of potential for that. The key is what is going to be IP’s position on what will be available to be marketed to outside concerns.”

Location, location, location

The Franklin mill’s location could also be a contributing factor to what is ultimately done with the facility.

“We’re 45 miles from the (Port of Virginia),” Godwin said, adding that local railroads and highways could reach barges very quickly. “It makes more sense to site a wood pellet plant in Franklin than someplace like Missouri. Shipping all of those products is going to be key, since the biggest market for pellets is in Europe.”

Added Smolak: “If they are going to (sell) wood pellets for private home use in Europe, either containerization or break bulk type ocean vessels would make it very attractive to ship that product to Europe.”

Would the same number be employed?

The experts agreed that it is too early to tell if the same number of jobs would be created once converted to alternative uses.

“The number of the jobs created, compared to what’s there now, will probably be less in most cases,” Becker said. “It depends on what the processes (selected) are and what they’re doing. Electrical generation probably would not create the same number of jobs, but again it depends on the size of the operation and how much wood they’re using.”

He added, “Other things can be made in a number of different operations, but the problem is that normally they don’t need a lot of the very high-tech equipment, a lot of the processing and conversion. That’s one thing that makes it difficult when a pulp and paper plant goes down — it’s difficult to find something to put in its place. (Pulp and paper production) are very complex processes. They usually have a lot of high-paying jobs and high-value productions. Other (enterprises) in the forest products industry, most of the time, don’t have that degree of specialization.”

Becker said the production of cellulosic ethanol would probably create the most jobs.

“Ethanol would probably employ more people than if they were just burning wood for electrical production,” Becker said.

Godwin concurred, adding that electricity and ethanol production “would probably not be as labor intensive as the paper-making process. I don’t know for sure, but I doubt that it would take as many people.”

John Faraci, the CEO for IP, also expressed doubts that alternative uses would generate as many jobs as are being lost.

“The potential for bio-energy production is often explored due to location and existing infrastructure,” Faraci wrote in a Nov. 4 letter to local government officials. “However, very few jobs are likely to be created by such enterprises.”

The role of IP

For the moment it is unclear if IP would be interested in hosting or partnering with other companies to create facilities at the mill site for alternative uses.

But it is thinking about doing so elsewhere, albeit at a mill that is staying open.

IP spokesman Rick Ouellette and Sterling Planet Inc. executive Boyd Andrews both confirmed Thursday that the company began negotiations in August with Sterling Planet, of Norcross, Ga., to install a biomass-fueled power plant at a pulp and paperboard mill in Riegelwood, N.C.

Andrews said the cogeneration power plant, estimated to cost between $150 million and $200 million, would generate 35 to 45 megawatts of electricity, provide more than 600,000 pounds per hour of steam to the mill and would be fueled by waste wood and forest trimmings. Surplus electricity would be sold to a utility.

“Most of the large pulp and paper mills have their own generation plants on-site,” Becker said. Currently, the Franklin mill has a plant that powers the mill but nothing else.

Asked if he thought IP would either build a larger power plant at the Franklin mill site or sell the power it could generate after paper production ceases, Becker said, “It depends.”

“A lot of times (pulp and paper companies) tend to sell (power plants) to somebody else because it’s out of their business model. But some of them are looking at bio-conversions and bio-refinery methods to actually put into their own operations.”