Saskatchewan’s first large-scale ethanol project is expected to gobble up the province’s entire mandate for the alternative fuel.
Fuel distributors are required to blend one percent ethanol into their gasoline sales. The province plans to increase that to 7.5 percent in the future.
At a blend of 7.5 percent, the province is expected to use 125 million litres of ethanol per year. The Husky Energy plant in Lloydminster, Sask., which celebrated its grand opening Sept. 26, will produce 130 million litres of the alternative fuel a year.
“Our consumption of ethanol would be covered off by that one plant alone,” said Simon Weseen, a University of Saskatchewan agricultural economist.
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“Every bit of production above that is going to have to be exported.”
That creates problems for the province’s burgeoning ethanol industry because the Americans import little ethanol. Also, neighboring provinces may not be willing to offer subsidies for the consumption of Saskatchewan ethanol.
That means sales over 125 million litres won’t have the benefit of provincial tax breaks and will be competing on the world ethanol market until the federal government follows through on the five percent national mandate it has promised.
