William 'Butch' Johnson, CEO Flambeau River Papers   1/27/2010 by Wayne Nelson

A proposed $275 million expansion at Flambeau River Papers in Park Falls would push the mill into commercial-scale manufacture of "green" diesel fuels and other energy products, and create a new market for the region's loggers.

As planned by the paper mill's three-year-old Flambeau River BioFuels affiliate, the project would add about 40 full-time employees to the 300 already working in the mill, and create an estimated 125 logging-related jobs in the regional industry. The company wants to begin construction in August and be operational by 2012.

There's nothing small about the vision behind the cutting edge project. William "Butch" Johnson, 60, of Hayward is the mill's chief executive and majority owner, and principal architect of the biofuels initiative. His team is planning the largest, second-generation U.S. green diesel plant, turning waste wood into steam, electricity, sulfur-free diesel fuel and a waxy feedstock that could be further refined into other transportation fuels.

As proposed, the operation would use 1,000 tons of bone-dry woody biomass a day, producing 19 million gallons of green diesel and wax fuels annually. The mill would use the steam and electricity in papermaking.

The plan builds on the strategy Johnson launched in 2006 to make the paper mill fossil fuel independent by replacing the natural gas, coal and "brown" electricity it buys for its energy needs.

Woody biomass is waste wood - small branches and such species as tamarack and basswood - that loggers leave on the forest floor because there's no viable market for them.

The shift to woody biomass already has reduced the mill's dependence upon fossil fuels by more than a third, and helped set the stage for a major milestone in 2009: profitability.

In December Flambeau River Papers was on target to finish the year in the black, the first time that's happened since a new owner group led by Johnson reopened the bankrupt mill in 2006.

"It's our first profit, not a huge one," Johnson said in mid-December, citing increased productivity and entry into higher margin niche paper markets, as well as reduced energy costs.

As big as the vision underpinning the biofuels initiative were the improbable odds when Johnson proposed it shortly after he led the buyout and reopened the shuttered mill. His Hayward company, Johnson Timber, had been the sole supplier of pulp wood to the Park Falls mill, and was a major secured creditor in the 2006 bankruptcy reorganization of then-owner Smart Papers, based in Hamilton, OH.

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