Dominion Energy Open House

[craig]

I have just returned from the open house regarding the proposed ethanol, canola crushing and bio diesel plant proposed for just north of Innisfail. There was no formal presentation so there were questions left unanswered but fill you in the best I can. I would start by saying a plant of this scale is hard to fathom and the logistics of processing this much product and moving it in and out leaves unanswered questions. I would suggest that even the company does not have all the answers but those supposely will fall into place over time. So here are the numbers. The ethanol plant. There bulletin boards were confusing. One said about 132000 bushels of wheat per day the other about 111000 bushels.In metric about 3,700 metric tonne per day this will produce 1.3 million litres of ethanol per day and 1500 tonnes of dried distiller grains Canola crushing and bio diesel. Consumption 113,000 bushels per day producing 1.3 million litres of bio diesel and 1300 tonne canola meal.Did some calculations. On wheat if we assumed yield 2 tonne to the acre ( 73 Bushels)it would take over a half million acres of wheat per year. On canola at 40 bushels per acre you would need 1 million acres to supply the plant. On wheat if it was all trucked in you would need somewhere between 65 and 85 B Trains a day or about 33 (90 tonne rail cars) Unit train ever 4 days for wheat alone. On canola it would take between 50 to 60 B trains or 28 rail cars a day. Suggestion is they expect about 40% trucks and 60% rail. Then you need to add in the rail and truck traffic to move finished product and by product out of the plant. The comment was made that the plant needed for main requirements in terms of location. They were access to rail with ability for large car spots. Good access to major highways, a good water supply and proximity to oil refineries. The plant is proposing to recycle a large amount of it's water requirements and the plan is to scrub CO2 and sell to oil patch. It's getting late so will leave at that will try to add more tomorrow.

[kamichel]

They are an impressive company.
http://www.dom.com/about/overview.jsp
Try the interactive map of company assets.
What exactly does the proposed part mean?
Are they committed to building? Going to start? Certainly a plus for the Western Canadian grain industry if it goes ahead.
1/2 million acres is also 28 miles square.

[cottonpicken]

If its connected to the carlye group it will go ahead.

[craig]

Few furthur notes
The suggestion is that the supply area will be in a 300 mile radius of the plant. Reality is that west and east production zones for canola and wheat are hampered by lack of moisture(east) or short season (West) My acre numbers relate to decent production areas and the acreage requirement may in deed increase to account for marginal production. It is also obvious that there will be a big need for improved infrastructure (roads)around the plant.
There was some discussion on securing supplies and there is the suggestion that they will deal with both farmers and ag companies to source. It was suggested that there will be a number of pricing and contracts available.

[Burbert]

These big plans, always involve an unnamed investor, then sweat equity, meaning that farmers, have to buy in, purchases shares. Then of course there are contracts and commitments, for only the best quality grains and oilseeds available, delivered in, only the biggest and best farms need apply. The AB Gov't is on board, making it all happen, with behind the scene negotiations. Usually the final stage is a couple of wooden stakes stuck in the ground and the proposed site, that have little tiny orange ribbons attached. Then wait and see while the unnamed investor bolts with the cash he's gathered up. Chopstick factories, pelleting plants, strawboard plants, ostrich farms, are similar farm scam investment schemes which worked well in the past.

[JohnKenneth]

these are incredible numbers. can you see what this would do to the canola and wheat s/d's if this goes ahead? everyone's ignoring, or tired of thinking about all these biofuel developments but numbers like this are just as staggering to me now as they were last year when we started adding it up, before the markets rallied $2/bu.

did i hear right that contruction starts immediately and the hope is to be open in 12-18 months? burbert no need to reply, i'm wondering about craig's thoughts here.

[craig]

Suggestion is that they hope to start construction this summer and would take about 2 years to complete. They also said that they planned to break ground the first quarter of this year and that obviously didn't happen. I would suggest the approval process and dealing with infrastructure issues may take more time than expected. I would expect it would be likely that they would be in production sometime in 2009. This same company has a 51 million litre plant about 95% complete in Ontario. I share the vision like many that we will be more comfortable when construction starts. I do not share the Burbert vision that this is another project look for some last minute investors or a big government handout. I do not doubt that the Provincial government will be assisting where they can with this project. I would suggest that it is not much different than their support of the feedlot industry in the past as value added industry can help drive the economy. I think many share the vision that if the plant is built and is successful it will change the whole grain production dynamics in central and Nothern Alberta.

[craig]

I attended as well, and agree with Craig and others that are positive and forward thinking on this project. County of Red Deer still has to give final approval I believe, yet that shouldn't be a problem. Town of Innisfail fully supports it as well. Lot of work has to be done prior to completion. Highway 2A has to be rebuilt (been on the books to be done for past 20 years) and some NIMBY's need to be taken care of too.
They are looking on the ethanol side Andrew wheat, tired to get one independant fert/seed/chem dealer to get acres signed up. Bit early to do that just yet.
Will deffinately change things around here once built.
Erik

[wd9]

Craig, did the mention of bio-butanol ever come up ? (production of CH4 using the Dupont technology as opposed to ethanol CH3)

[craig]

wd9. I didn't here any mention of bio butanol. Talked to someone else at the meeting and he concurred that while the location meets their specs I might suggest they need some better local knowledge in terms of production supply of the feed stocks.

[kamichel]

Why an ethanol plant is not started here where I live I wonder sometimes. Almost the cheapest grain in western Canada and they want feed grain and soft wheat , we can grow it and in fact we are without the close market. I worry about contracting with the Belleplain plant because I don't believe they will be in operation by Nov. like they claim. If they are delayed by a year that could cause storage headaches for the farmer contractors. I hear they are still looking for a second plant site.