October 27, 2009 Wood waste: Fuel of the future? Play video

(NECN: Amy Sinclair, Gorham, Maine) - Global warming, dependence on foreign oil, and high unemployment are some of today's most pressing problems. Now, a small company in Gorham, Maine, says it has found a solution -- in the form of a clear, sweet smelling liquid.

Maine has more trees than any other state in the union, so heating with wood is nothing new there, but engineer Stephen McKenzie's method is light years away from adding another log to the fire.

A small processing plant in a Gorham industrial park is the result of decades of research.

McKenzie has developed a new process for turning wood waste into liquefied fuel. In brief, the wood is mixed with acid, steamed and sent through a couple of reactors.

When it comes out the other end, it looks like molasses, but when it's blended with ethynol, it becomes ethyl levulinate, a clear liquid that smells like sherry and can be used as a substitute for heating oil.

Now, with the help from developer Paul Nace, Biofine Technology hopes to get this fuel to market.

They say Maine is the perfect place to pilot the project because in addition to the wood supply, most Mainers heat with oil.

The company has applied for a $50 million grant from the Department of Energy. It will allow them to build a demonstration plant that would show the process from start to finish -- a complete integrated biorefinery.

They say their fuel could be a game-changer for all of New England,

Biofine Technology will find out whether or not they'll get the grant money by the end of the year. If that happens, they say they hope to make the fuel available commercially in five or six years.

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