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Idle Canadian pulp mill could see new life as new biofuel plant

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princealbertmillThe collapse of the forest products industry, especially in Canada, has idled many paper and pulp mills but out of that continuing disaster comes an opportunity for biofuels and bioenergy.

There’s some evidence of that this week from the Government of Saskatchewan, even if it is a vaguely worded. The Canadian province reached an agreement with Iogen Energy and Domtar, a major Canadian paper and wood products company, which “sets the stage for the potential redevelopment of the Prince Albert mill site as a cellulosic-based ethanol plant and bioenergy facility.”

Under the agreement Iogen, a biotechnology firm based in Ottawa, would convert the Domtar pulp mill – idle since 2006 – into a facility that would convert cereal straw to cellulosic ethanol. If a final investment decision is positive, the province says, the multi-million dollar project, in partnership with Royal Dutch Shell, would also include a power plant generating electricity from forest and ethanol plant residues. Shell and Iogen are linked through a commercial alliance.

The money/investment part is also vague at this point because Iogen/Shell won’t make a final investment decision on the project until design and feasibility work is completed. If the project then proceeds Iogen will buy the mill assets from Domtar.

The Saskatchewan government would then assume ownership of the remaining mill property not involved in the Iogen bioenergy initiative, and take responsibility for the existing environmental cleanup obligations associated with the decommissioning of the pulp mill site. In exchange, Domtar would pay an environmental settlement fee to the province as compensation for its share of the environmental site obligations.

The quote, from Bill Boyd, Saskatchewan’s energy and resources minister: “Redevelopment of this mill site has been a priority for us, for our forest industry and for people of the area. A final decision still needs to be made by the company, but this agreement is an important first step in our commitment to find new uses for the mill facilities, new markets for our forest and agricultural resources and new forestry jobs for Saskatchewan people.” He called the deal a “win-win” situation for the forest industry and area farmers while showcasing new technology and new approaches from Iogen. So it’s a win-win-win, eh?

Iogen is planning public meetings later this month with communities and the First Nations tribe in the region as it evaluates the pulp mill site. The company also will move ahead with detailed engineering studies and the required environmental approvals.

The agreement is the “essential next step” for the Saskatchewan project, says Iogen Chief Operating Officer Pat Foody. “It allows us to proceed with the development and assessment work that will provide the needed input into the eventual decision whether to proceed.”

If it does proceed, the province said it would purchase green power produced from the plant and also “provide new growth tax incentives related to technology commercialization and transportation.”

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Written by William DiBenedetto

4 June, 2009 at 10:36 am

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