Richmond, Va.-based Intrinergy is gearing up for a $10.5 million project to build a biomass energy generator at a paper mill in Wiggins.

The project at the Cellu Tissue Coastal Paper plant could be the first step in providing the southeast Mississippi timber industry with an outlet for its products during a time when traditional buyers are dwindling.

Intrinergy officials plan to begin discussions with wood providers during a meeting on Wednesday.

The generation facility, which will eventually add about 18 jobs, would produce energy using 1,000 tons of unwanted wood byproducts, such as barky scraps discarded at lumber mills or the damaged wood products that sat in useless piles after Hurricane Katrina, said Intrinergy vice presidents Matthew Markee and Thomas Meth.

“There are two major benefits, the environmental and the commercial impact,” Meth said. “We apply synthetic gas that is a renewal energy to replace natural gas, fuel oil or coal in a market where energy prices have been high and very volatile.”

“We take the volatility out of the energy. What they pay is lower than what they pay today for natural gas,” Meth said.

Meth said one benefit of the project is “a high tolerance for what we can take in,” explaining that the wood they need to make energy is of a lower grade than what would be required in a sawmill or paper mill.

However, 1,000 tons a week is a very small percentage of what South Mississippi could provide, said Glen Herrin, manager and co-owner of Southgate Timber Company.

“What they’re looking for is a byproduct — hardwood chips — so it’s not a big impact on the timber industry,” he said, noting that mills in the area produce millions of tons a week of this sort of scrap material.

If the alternative energy source catches on among other manufacturers or larger energy suppliers, it could begin to be felt in the timber industry, Herrin said.

“Eventually, it filters down, but we need more than just one of those plants,” Herrin said. “If people would go to using that instead of petroleum or butane, just think what a savings it would be. This is a start. It’s exciting, but we won’t see a dime anytime soon.”

The plant in Wiggins is Intrinergy’s first foray into the South Mississippi market but success with that project and a strong network of suppliers could prompt the company to invest in other sites in the future, Meth said.

“Mississippi is one of five projects we are starting on,” he said. “We are on the path of finalizing the wood supply, but once you are in an area it makes a lot of sense to see if other customers are interested.”

Markee said the company was “looking at other plants, but we are not far enough to say what they are.”

In addition to the Wiggins facility, which is expected to be operational near the end of 2007, Intrinergy is beginning projects in Bessemer and Birmingham, Ala., and completing a project in Coshocton, Ohio, that utilizes plastic and rubber byproducts instead of wood, which is not as easy to come by in the Midwest.

Joe Doss, coordinator of Southeast Mississippi Resource Conservation and Development Council, who is organizing the Wednesday discussion, said the new project should generate some talk and potentially lead to future projects.

“We hope to build interest in the industry and the businesses to at least consider supplementing their propane and natural gas usage with the use of wood,” Doss said. “By utilizing wood as an alternative energy source, we have created business for trucking companies, timber harvesting and so on.”

“It’s sort of like a domino effect. If we can get one or two of these companies in, it begins to help our forest industry,” Doss said. “It puts more market money into circulation, and green energy and environmental-friendly energy are all the talk now.”