Farm Boyz Rule Ottawa - By Terence Corcoran of Financial Post.

[freenorth]

So Francisco were you happier when canola was $6 wheat was $4 and nitrogen
was 26 cents. What's changed since then?

We always respond or react to US farm policy that's why we grow oats and canola. It's not just because they are off the CWB it's also because the US doesn't subsidize them to the same degree as wheat,corn and beans. Similarly with biofuels we are getting into them because there is demand in the U.S. and Europe for them and we are reacting to it.

Canada is an exporter of energy true but we also need to practise being good stewards and leaving things better then we found them and hence we can not ignore the green arguements for biofuels.

Yes it is risky to build a business built around a government subsidy but I would not expect incentives to last long term. The Canadian industry will not get anywhere near as overbuilt in Canada as it may elsewhere. The front runners will have an advantage. There will be successes and failures and consolidation and the sun will come up tomorrow.

[Fransisco]

The green arguments? Good stewards leaving things better than before?

Check out this

http://pubs.acs.org/subscribe/journals/esthag-w/2007/apr/science/ee_ethanol.html

<blockquote>Jacobson, an atmospheric chemist at Stanford University, knew that air quality got worse during Brazil's big ethanol push in the 1970s and that the reason was still unclear.

Jacobson decided to use his sophisticated air-pollution model to put ethanol to the test. Would switching the U.S. fleet to white lightning make the country breathe easier?

His results, published today on ES&T's Research ASAP website (DOI: 10.1021/es062085v), show that ethanol is no silver bullet for health. Switching to E85 blends (85% ethanol, 15% gasoline) could result in slightly higher ozone-related mortality, hospitalization, and asthma (9% higher in Los Angeles and 4% higher in the U.S. as a whole), the study finds. Cancer rates would be similar for gasoline and E85.</blockquote>

and this

<blockquote>
Scientists at Environment Canada studied four vehicles of recent makes, testing their emissions in a range for driving conditions and temperatures.

"Looking at tailpipe emissions, from a greenhouse gas perspective, there really isn't much difference between ethanol and gasoline," said Greg Rideout, head of Environment Canada's toxic emissions research.

"Our results seemed to indicate that with today's vehicles, there's not a lot of difference at the tailpipe with greenhouse gas emissions."

The study found no statistical difference between the greenhouse gas emissions of regular unleaded fuel and 10 per cent ethanol blended fuel.</blockquote>

[Fransisco]

So is it really cleaner burning? Or maybe you just want it to be cleaner burning.

[Fransisco]

Oops, looks like I forgot something else. According to Consumer Reports

<blockquote>Overall fuel economy on the Tahoe dropped from an already low 14 mpg overall to 10. In highway driving, gas mileage decreased from 21 to 15 mpg; in city driving, it dropped from 9 mpg to 7. You could expect a similar decrease in gas mileage in any current flex fuel vehicle because ethanol has a lower energy content than gasoline - 75,670 British thermal units (BTUs) per gallon instead of 115,400 for gasoline, according to the National Highway Traffic Safety Administration. As a result, you have to burn more fuel to generate the same amount of energy.

With the retail pump price of E85 averaging $2.91 per gallon in August, according to the Oil Price Information Service, a 27 percent fuel-economy penalty means drivers would have paid an average of $3.99 for the energy equivalent of a gallon of gasoline. </blockquote>

I'll let you guys do the math but that acreage requirement just went up again.

[Fransisco]

And the incentives won't last long? Famous last words.

I've already pointed out that Brazil with their sugar cane are the front runners in this thing. They've got the best natural advantage there is in the world when it comes to ethanol and they still had to spend 13 billion dollars over 14 year to get the thing going and they are still losing money today on their E-20 mandated blend.

Yet our industry can survive subsidy free in a couple of years? Dream on.