The value of wood waste can be enhanced considerably above its fuel value by extracting carbohydrates from it before burning it, and converting the carbohydrates to fuel-grade ethanol. The process conditions for extracting and fermenting carbohydrates from various southern pine residues (bark, needles, twigs, and branches) were evaluated, and the characteristics of the post-extracted wood waste determined. An economic assessment of incorporating forest residue and hog fuel extraction and fermentation in a pulp mill is included.