Renewable Fuel Policy

[Vader]

The Liberal party announced today their objective for a 5% bio-fuel blend by the year 2010. In the case of ethanol this will require something like 10 ethanol plants the size of the Husky plant at Lloydminster. Considering that Husky plans to build another similar plant at Minnedosa, MB then that gives them 20% of the required capacity to achieve the mandated level.

Who will build/own the other 8 plants and where will they go?

I heard someone say the other day, "Once the plants are built... they are built".

Similar opportunity for bio-diesel but probably less volume. Light truck and passenger vehicles account for more than 50% of total energy consumption in North America and total off-road use(which includes construction and agriculture) is only 6%.

Conservatives and NDP say they will have their ag policy announcements in the coming days.

[wedino]

Husky(Lloydminster), Poundmaker & Weyburn will likely be able to supply Sask.(7.5% mandate) Number of plants (built or being built) in Eastern Canada will use corn. Processed corn can come in tariff free. Will they run it through a hammer mill before importing? I think they have to.

A 1% (B1) blend of biodiesel in Canada equates to 1 million acres of canola for road diesel. Add in agriculture & construction & it's huge. And Don't forget that USA has a huge appetite for ethanol/biodiesel.

[Cattleman]

I found it interesting that he didn't announce this while he was out west! Was actually very dissappointed. That means to me most of these are going to be in Ontario??

[silverback]

That is a very nice promise, but how does he intend to get it done?

It is almost 2006, there is a massive shortage of men, equipment, and materials to get anything built, let alone an ethanol plant (at least in this province). If it can be done in a shorter time than that - great, but time is not on their side I would think?

[cowman]

This is sort of related to this topic.
I know a young engineer who works at the Ammoco plant at Joffre that is running his truck on used cooking oil...as well as supplying a few buddies! He set up a simple system in his shop and has a truck that goes around to the fast food joints in Red Deer and collects their used cooking oil. He charges them a small fee for this service.
In the summer he runs straight but in the winter it is necessary to go to a 30% blend...but he is working on that!
He claims it costs him zero dollars to produce all his fuel, the pickup fee covers any costs of processing the cooking oil! He figures he will produce close to $40,000 worth of fuel a year from a very small investment in tanks, heaters, filtering equipment. Might be a very viable extra income business?

[sverchomin]

Unless a company is willing to pony up, we could be initially importing from the US. Their industry is getting going now and is probably 3-5 years ahead of our industry. Another point is that a lot of the ethanol plants in the US are government funded, which is a main driver for the industry. Wonder if Martin is willing to support the industry to meet his 2010 targets? If not, we may be depending of governent supported US plants.

[sverchomin]

Pulled a Charlie. The last sentence should read.

If not, we may be depending on government supported US plants.

[agstar77]

Conservatives have announced the same policy if elected, so I guess renewable fuel is hot.

[ianben]

We have similar retoric on renewable fuels here in Europe. A number of plants under construction and promised for UK. Germany is the country with the real comitment in the past and plants using significant quantuties of Canola but change of government may alter the tax breaks there.

My real question is does it matter where these plants are built if the building of them increases the demand for what we produce?

Will this new market demand be enough to remove the over supply from the market and push up price to at least the energy equivalent?

[dalek]

Probably won't make any difference in Ontario whether the ethanol is imported or made here from imported corn, unless something changes drastically, and more than just the corn countervail, we can't afford to grow the corn in competition with the US. At least one of the current ethanol plants is running at 70% US corn, which when you factor in the distillers grain coming out the back end results in a net LOSS in Ontario corn marketed.