October 11, 2008

PCA Starts Biorefinery

By Anonymous

CONTAINERBOARD Packaging Corp of America (PCA) started up a biorefinery to produce methane gas at its Filer City, MI, semichemical corrugating medium mill that is to nearly eliminate the complex's natural gas use as well as reduce production costs.

Using a proprietary process, the biorefinery takes byproduct liquor of the pulp cooking process and uses bacteria to convert the liquor directly to methane gas. The methane is then burned as fuel in an existing power boiler to produce steam, replacing essentially all natural gas (except for pilot lights) and 30% of coal consumption at the 413,000 tons/yr mill.

Since me pulping liquor is converted directly to methane gas, the process does not require recovery boilers or high energy-consuming evaporators, which remove water from the liquor so that it can be burned. The evaporators and me chemical recovery unit at Filer City, which is a fluidized bed version of a recovery boiler, were shut down.

PCA said the biorefinery is operating at around 75% of capacity and is expected to achieve full capacity and efficiency (generating purer gas) within a few months. The $20 million project is expected to result in annual cost savings of $10 million, resulting in a $25/ ton reduction in cost to produce medium at Filer City.

"The startup of the biorefinery at Filer City represents not only a significant milestone for PCA, but also for the development and use of low cost, green energy," said PCA chairman and CEO Paul Stecko.

"The economics on the project are particularly good considering that the returns are based, in part, on replacing primarily coal, a relatively low cost fuel, with methane in our boilers," he added.

About 22% of PCA's total purchased energy (and 24% for its mills alone) comes from natural gas and oil so the company has been "less impacted by the recent surge in energy costs," Stecko noted at the company's second quarter conference call. About 73% of purchased energy for its mills last year came from coal and bark.

Stecko said PCA would be able to talk in more detail about the internally-developed, proprietary biogas technology in the next few months.

Analysts asked if the process would be applicable to kraft mills in addition to semichemical medium mills. The process would appear to have potential to reduce capital cost of expanding existing mills that are recovery boiler limited or even for building new greenfield virgin fiber mills, contacts said.

Copyright Paperloop, Inc. Sep 2008

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