Governor Baldacci toured Maine Bio-Fuel, Inc. of Portland last fall. With the news of the grants, the company’s co-owner, Dean Sgouros, said, “It means survival … Now we can expand.” photo by Ramona du Houx
Plans would boost biomass and biofuel production, bringing $150 million for Maine


By Ramona du Houx

March 21, 2010

In February President Barack Obama announced a series of steps his administration is taking as part of its comprehensive strategy to enhance American energy independence, while building a foundation for a new, clean-energy economy.


At a meeting with a bipartisan group, including Governor John Baldacci, the president laid out three measures that will work in concert to boost biofuels production and reduce our dependence on foreign oil.

• The Renewable Fuels Standard requires biofuels production to grow from last year’s 11.1 billion gallons to 36 billion gallons in 2022, with 21 billion gallons to come from advanced biofuels.
• The U.S. Department of Agriculture has proposed a rule on the Biomass Crop Assistance Program (BCAP) that would provide financing to increase the conversion of biomass to bioenergy.
• The President’s Biofuels Interagency Working Group released its first report — Growing America’s Fuel. The report lays out a strategy to advance the development and commercialization of a sustainable biofuels industry to meet or exceed the nation’s biofuels targets.

“By 2022, we will more than double the amount of biofuels we produce to 36 billion gallons, which will decrease our dependence on foreign oil by hundreds of millions of barrels per year,” said President Obama. “We’re also working to make sure that we can start turning things like plants and woodchips into heat, power, and biofuels, and that will create new economic opportunities for rural communities. And our biofuels working group is releasing its first report that details the government’s strategy for supporting the biofuels industry.”

For Maine Bio-Fuel, Inc. of Portland, its great news. “It means survival,” said Dean Sgouros, co-owner and vice-president. “We all can breathe easier.”

2009 was a traumatic year for biodiesel production, with agricultural prices increasing, the recession, and the lack of tax credits. Two-thirds of the industry shut down.

Tax credits for the industry ran out under President Bush, despite efforts of the Environmental Protection Agency Administrator, Lisa Jackson, who advised the Bush administration about new EPA data and changes concerning these industries.

“She sent President Bush and Cheney e-mails. They never opened them,” said Sgouros.
Obama’s administration did and has turned the tide for the industry with this announcement. Tax credits were reauthorized in December 2009.

“There are 29,000 jobs at stake in the biodiesel industry. We were left standing, because our fuel stock is cooking oil. Businesses across the country closed last year. Now we can expand,” said Sgouros, who would like to grow Utopia, recently identified by the EPA as being a good base for biodiesel.

Armed with more conclusive data, the EPA states that using biodiesel instead of gasoline results in a 57 percent reduction of greenhouse gasses.

For Maine’s paper mills that have plans to diversify in biomass production, the announcement could help their survival and growth, in a green energy economy.

Researchers at the University of Maine are refining technologies to turn wood or the waste from the pulping process into fuels. They have been working closely with Old Town Fuel & Fiber (the former Georgia Pacific mill) and have won research and development grants.

Old Town Fuel & Fiber’s Web site says, “The extraction of hemicelluloses from woodchips and the process of converting the lignocellulosic extract to biofuels and other chemicals provide replacements for costly and less eco-friendly energy and transportation fuels. Using this technology, Old Town Fuel & Fiber is now one of the few existing pulp mills in the U.S. with the ability to produce 80 percent of its energy needs, with plans to produce 100 percent or more. Together with the University of Maine, Old Town Fuel & Fiber anticipates building a center of excellence for research and development of new technologies.”

“Lynn Tilton of Old Town Fuel & Fiber wants the fuel for tanks and helicopters she manufactures. It’s really progressing to the highest value-added product possible, while employing more workers. It means more diversity in our paper mills. So it’s not just paper or pulp, which is important. They are also energy generators and are part of the independent energy future we want for Maine and the county,” said Baldacci.

Old Town Fuel & Fiber’s technology is designed to be easily integrated into existing pulp facility infrastructure.

“We have 17 million acres of forestland. We are the Saudi Arabia of forestland. We have researchers at the university of Maine working on cellulosic biofuels. We have the second highest number of biomass facilities in the country after California. This is a significant, exciting program for Maine,” said the governor.

Maine’s timberland owners, loggers, farmers, and waste-oil suppliers will benefit directly. BCAP payments are for material that is sold to qualified biomass facilities for the production of heat, power, bio-based products, and advanced biofuels like the cellulosic ethanol. Suppliers need to sell their materials to one of the 26 qualified conversion facilities in the state to receive the subsidies.

“The state needs to work with the federal government to protect the landscape and sustainability of the forests, at the same time to make sure there is enough there for traditional usages,” said Baldacci.

On a conference call with reporters, Agriculture Secretary Tom Vilsack said that to protect woodlands used by the boat industry and other quality woodcrafts there would be a woodland prohibition in place.

“We want to protect forests as well, so the resource is sustainable. There is tremendous opportunity for the growth in these industries,” said Vilsack. “BCAP will stimulate biomass production, and that will benefit producers and provide the materials necessary to generate clean energy and reduce carbon pollution.”

BCAP has already begun to provide matching payments to businesses delivering biomass for the collection, harvest, storage, and transportation of biomass to eligible biomass conversion facilities.

Vice President Joseph Biden said the $80 billion being invested in clean energy through the Recovery Act stimulus package includes $600 million for biofuels projects across the nation. About $150 million is projected to come to Maine. Rules implementing the BCAP program become final in April, when Maine suppliers will be able to start applying for the subsidies. The funds run out in two years.

“We will be petitioning the federal government to reauthorize the program once it runs out,” said Baldacci. “At the state level, we will continue to work with REGGI Trust fund and Energy Efficiency Maine to make sure we are supporting those paper companies and individual manufacturing facilities. We need to make sure they continue to obtain energy grants, so their processes are more efficient. They have found that polluting less uses less energy and makes them more successful.”

EPA Administrator Jackson said the announcement set the stage for entrepreneurs and innovators to progress their ideas in the green-energy economy, will stabilize prices at the gas pump, and help farmers and foresters with new markets, while reducing carbon emissions.

“The actions President Obama has taken will create jobs, slash greenhouse-gas emissions and increase our energy security, while helping to put America at the leading edge of the new, energy economy,” said Jackson.

Increasing renewable fuels will reduce dependence on oil by more than 328 million barrels a year and reduce greenhouse-gas emissions more than 138 million metric tons a year when fully phased in by 2022.

The president also announced a Carbon Capture and Storage Task Force that will be charged with the goal of figuring out how to deploy affordable, clean, coal technology on a widespread scale within ten years.

The governor is confident President Obama’s administration is committed to energy independence. And Baldacci is actively fighting to ensure Maine embraces this opportunity.

The Midwest has plans for energy transmission that would rely on coal and wind energy. Maine’s plans involve all renewable-energy sources, especially offshore wind. The Midwestern states would like to push Maine out of the picture.

“We recognize other parts of the county are promoting their energy sources. We have a plan with the New England Governors and the Eastern Canadian Premiers for energy self-sufficiency. It talks mainly about offshore wind. It commits us to becoming independent of foreign sources and not being susceptible to the Midwest or anyone else,” said the governor. “We have the largest real-estate platform for renewable energy; be it wave, tidal, wind, solar, or wood. Maine is the place where we can realize these opportunities. We can feed southern New England and the New York markets with clean, green energy, developed here.”