Pulp mill’s switch to natural gas may save $12 million annually

Woodland Pulp LLC plans to begin construction of a natural gas line to power its mill in Baileyville in early June. The mill's owners expect to be able to recoup the $12 million cost for the new gas line in one year, through avoided costs for oil payments.
Woodland Pulp spokesman Scott Beal cautions that one can't project how oil and gas prices will change, but presently the cost difference is about four to one. Last year the mill burned over 10 million gallons of heavy #6 fuel oil for its power boiler, its lime kiln and part of its recovery boiler. Currently the mill is a net seller of electricity, which is produced from the mill's thermal turbines that are powered by its two boilers, and from its hydroelectric dams.
The upfront cost for the new pipeline, which will run 4.5 miles north from the mill to the Maritimes & Northeast Pipeline in Princeton, will be covered in part by a $5.3 million loan from Machias Savings Bank, for which the Finance Authority of Maine recently approved commercial loan insurance. The company will invest another $5 million of its own funds. The remaining $2 million will be realized in avoided oil costs through the early conversion of the mill's lime kiln and power boiler over to liquefied natural gas, which is being trucked in from the LNG terminal in Everett, Mass. The lime kiln already has been converted, and the power boiler will be converted in July.
Woodland Pulp is currently obtaining environmental permits for the gas line, and legislative action to aid in getting the line constructed also has been taken. A bill sponsored by Senate President Kevin Raye of Perry, LD 1545, allows the Maine Public Utilities Commission, instead of the federal Department of Transportation, to exercise jurisdiction over private natural gas pipelines to ensure their safe operation. The bill has now been enacted, having been passed by the legislature and signed by Governor Paul LePage.
Raye also recently expressed his appreciation to the governor for his administration's "quick, decisive and positive action" in granting preliminary approval for Pine Tree Zone certification that also will facilitate the mill's conversion to natural gas. "As Washington County's state senator, I am grateful to Governor LePage and Acting Commissioner George Gervais of the Maine Department of Economic and Community Development," said Raye. "Woodland Pulp LLC employs 310 people at the mill and has an enormously important spin‑off effect throughout the region. The mill's future viability will be greatly enhanced by this action."
In addition to the financial savings for the mill, the conversion to natural gas will lead to significant environmental improvements. Particulate, sulphur dioxide, carbon dioxide and nitrous oxide emissions will be reduced significantly.