enlarge Doug Jones/Staff Photographer

Barber Foods uses enormous amounts of energy in its cooking and freezing processes. Here, line workers Hanh Ta, left, and Alexandra Zubowicz straighten and space stuffed chicken breasts as they move from a crisper heated to 390 degrees to a freezer running at minus-34.

enlarge Doug Jones/Staff Photographer

The holding freezer is a massive energy consumer at the Barber production facility in Portland.

enlarge Doug Jones/Staff Photographer

Steve Hanson, engine room operator at Barber Foods, keeps a watch on resources that power freezers, cookers, fryers and the plant itself.

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A rotary forge shapes red-hot steel stock into machine-gun barrels at the General Dynamics Armament and Technical Products operation in Saco, which manufactures weapons systems for the military. The plant is dramatically reducing its reliance on oil by using more natural gas.

Click here to read stories in the "Fighting Back" series, about coping with high energy prices.

The Millinocket paper mill has survived for more than 100 years, through wars, the Great Depression, foreign competition, ownership changes and other challenges.

But what may well be the final blow to what today is called Katahdin Paper Co. is something most Mainers face: high oil prices.

Mill executives announced recently that the company's fuel costs have doubled in the last year and that the factory expects to close indefinitely on July 28, putting 208 people out of work.

"Obviously the runaway oil prices have been a huge issue," said Jack Cashman, senior economic adviser to Gov. Baldacci. Cashman and others are working to keep Katahdin Paper operating, even as they monitor how high energy costs are affecting other plants.

Katahdin is particularly vulnerable because oil is the mill's sole source of heat and steam for papermaking. Even so, energy costs have put at least a half-dozen other manufacturers around the state on the brink of a Katahdin Paper-style situation, said Cashman, who declined to name them.

"I'm sure you can repeat that around the country," said Cashman. "Oil's gone from 40, 60 bucks a barrel to 140 bucks a barrel. That's a helluva jolt to absorb."

Across the state, manufacturers are confronting high and wildly unpredictable energy costs by working to diversify their energy sources and squeezing every efficiency they can out of operations to cut fuel use.

The stakes are high for the state in this effort. Manufacturing jobs tend to pay well; in 2007, the average weekly wage for manufacturing jobs was $856, while the state average for all jobs was $675. Goods-producing companies typically sell their products outside Maine, bringing new dollars into the economy.

But that work is fuel-intensive.

Katahdin Paper went through a staggering 400,000 barrels of oil in 2007. That's 16.8 million gallons. By comparison, a typical single-family home in Maine goes through 800 to 1,000 gallons.

Most paper mills are integrated, meaning they make pulp at the plant that is then made into finished goods. A byproduct of the pulping process is steam and heat, which is needed for the papermaking process.

It's an efficient system, capturing and reusing energy.

Katahdin is not integrated; its pulp is shipped from a mill in nearby East Millinocket. Katahdin's sole source of steam and heat for the massive, old mill comes from oil burners. While company officials cited oil prices as the main economic problem, other factors have hit the Millinocket mill, including rising costs of transportation, wood and pulp. And global competition in the paper sector is fierce, further pressuring mills like Katahdin Paper.

At Lincoln Paper and Tissue, two-thirds of the steam used in papermaking comes as a byproduct of the mill's pulp process, and one-third from a biomass boiler. By converting wood waste and other biomass solids into steam and electricity, Lincoln saves more than 9 million gallons of fuel oil a year, according to the company.

"People like us are being hit by all the energy costs, but we still have a relative advantage to people who don't have the pulping process," said Keith Van Scotter, president and chief executive officer.

CUTTING FUEL CONSUMPTION

Paper mills are not the only factories focused on energy prices right now.

"We use a tremendous amount of fuel oil," said Gary LaPerriere, director of operations at General Dynamics Armament and Technical Products' Saco plant, which makes guns for the military.

Three big oil burners heat water for the factory's wash tanks and other systems, and also warm the cavernous buildings. In 2006, the plant went through 338,000 gallons of oil.

But in 2007, the company invested $200,000 to install two natural-gas fired boilers. They went online in November, and cut oil usage significantly -- the company only used 276,129 gallons of oil in 2007, even though...