An American investment and energy firm announced Nov. 13 it will build a massive 1.36 billion litre biofuel facility in Alberta.
Curtis Chandler, president of Dominion Energy, said the refinery would include a 454 million litre ethanol facility, a 454 million litre canola oil crush facility and a 454 million litre biodiesel facility.
The plant will require one million tonnes of wheat and one million tonnes of canola each year, the largest plant of its kind on the Prairies.
“We’re hoping once farmers know that they have a local and ready buyer, maybe they’ll plant more canola or plant more wheat specifically for our plant,” said Chandler, who expects to draw the crops from a 480 kilometre radius of the plant.
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Three Alberta communities are on the short list for the $400 million biofuel facility. An announcement on the location is likely by the end of November. Construction is expected to begin by May and production should begin by the middle of 2008.
The company has included in its proposal an expected federal government announcement of financial incentives to encourage the production of biodiesel. In October, the Alberta government announced it would invest $239 million to help encourage investment in the bioenergy industry.
Dominion Energy, which develops renewable fuel facilities in Canada and the United States, is currently converting a cornstarch plant in Collingwood, Ont., to an ethanol production facility. That project is in conjunction with Riverstone Holdings, one of the private equity firms investing in the proposed Alberta facility. Carlyle Group is also an investor in the biofuel plant.
Chandler said economies of scale dictated the size of the facility.
“The costs per gallon is significantly less. Your operating costs are significantly less. That will make us competitive with anyone in North America.”
Chandler believes biofuel will be an important part of North America’s energy future and there isn’t enough production capacity in Canada to fill those needs. The federal government is expected to mandate that all fuels must include at least two percent biofuel by 2010.
“We actually believe in ethanol. We believe in canola itself and we believe in canola oil for biodiesel in Canada, especially in the winter months. We believe that if we’re going to have a biodiesel plant that we need to control our own oil supply and not rely on third parties to purchase that oil.”
Ernie Sirski, a Canola Council of Canada board member, said the announcement is good news for canola producers and the entire agriculture industry.
“It has to be positive for the whole canola industry,” he said.
