After years of promise, promotion and prediction, the dream of turning
prairie straw into ethanol and a new cash crop remains just that for
now – a dream still years away.
Iogen Corp., an Ottawa company promoting the promise of commercial
plants on the Prairies, now says it is at least two years away from
turning the sod for its first commercial plant.
And while at least four prairie sites are in the running, the first
plant may well be in Europe or the United States.
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“It is not a slam dunk that the first plant will be in Canada,” Iogen
executive vice-president Jeff Passmore said during a tour of the
company’s demonstration plant in Ottawa. “It will be late 2004 before
the first sod is turned and it is not clear yet where that will be.”
However, he said prairie plants definitely will be part of the network
once commercial production starts.
“We’re looking at a 10-year development plan and the West definitely is
part of that.”
Killarney, Man., Birch Hills and Indian Head, Sask. and Vegreville,
Alta., are favoured for construction because of the abundance of straw
within a 100 kilometre radius.
Plants will be built by private investors who will contract for rights
to Iogen’s patented process of using enzymes to turn cellulose into
ethanol fuel.
Two years ago, company officials were predicting construction of the
first plant would begin in spring 2002.
“Things have been slower than we expected,” Passmore said.
Still, he remains an enthusiastic optimist, bubbling with certainty
that the stars are aligning in Iogen’s favour:
- The United States Department of Energy has judged Iogen’s bioethanol
to be one of the cleanest fuels around, reducing greenhouse gas
emissions by 99 percent compared to gasoline. Passmore said it is
cleaner than traditional grain-based ethanol because Iogen’s process
creates fuel to power the plant, eliminating greenhouse gas emissions
from the manufacturing process.
- Canada seems poised to sign the Kyoto accord on greenhouse gas
reduction later this year and the Canadian government has recognized
ethanol as an important tool in meeting Kyoto commitments.
- Earlier this year, The Royal Dutch Shell Group invested $46 million
in Iogen, judging it the world’s “leading edge” bioethanol development
company. The Shell equity investment will help Iogen create the world’s
first commercial-scale bioethanol plant on the Ottawa site.
- The prospect of using prairie straw as an affordable raw material
remains a key part of the plan. The company says it could offer
approximately $35 for a tonne of straw, a price it considers attractive
on the Prairies, but too low to attract sufficient quantities in
Ontario.
“The quantities that we need are there (in the West) at affordable
prices and we think this would be a real benefit for the local
communities,” Passmore said.
The company estimates that a plant would boost incomes by $7,500 for
each area farmer contracting to deliver straw, and create up to 100
direct jobs and as many as 1,500 spin-off jobs in the region.
Economic development officials and local politicians clearly see the
potential, even if the deadline keeps moving back. Officials from all
four targeted communities have visited Iogen head offices for a tour
and a talk.
Rick Verspek, a member of the Killarney delegation to Ottawa, said he
appreciates the care that the company is taking to get the technology,
expansion and marketing plans right before authorizing a commercial
plant. The delays do not make him skeptical.
He is certain a commercial ethanol plant will some day be built in his
area, at great benefit to the region.
“I’m quite confident there will be a plant,” he said. “We envision it
will put roughly $10 million into the hands of producers in the region,
with other jobs and increased assessment on top. It will be very
significant.”
