The Katahdin Paper Co. Millinocket mill will shut down Sept. 2 because of record fuel costs, but may reopen in 2009 with a biomass boiler to reduce its reliance on oil, according to the Bangor Daily News.

The mill's future has been uncertain since May, when the mill's owner, Toronto-based Brookfield Asset Management, said it would shut down the mill in July -- because record oil prices had doubled the mill's fuel costs -- and lay off its 208 employees. The mill burned 400,000 barrels of oil in 2007. At the time, the state began talking with the mill about the possibility of installing a biomass boiler to reduce the mill's dependency on oil. The mill received a short respite in early July when the company said the mill would stay open as long as the mill continued to receive orders and could maintain a positive cash flow.

When the news broke yesterday, a mill spokesman told the Bangor Daily News that the mill was closing indefinitely and that company officials hadn't given up the idea of installing a biomass boiler to replace oil in the mill's production of steam. Gov. John Baldacci, however, immediately said the CEO of Brookfield Asset Management had assured him the mill would reopen in 2009 with a biomass boiler.