A Detroit-based company and a group of Canadian investors plan to build two biodiesel plants in northern Alberta at a cost of about $300 million each.
The Power Alternative of Detroit, along with Canadian investors, have targeted High Prairie and Smoky Lake in which to build two 66 million litre per year plants. Both are expected to be running by late 2012 or early 2013.
“Each of them will be capable of processing up to 500 metric tonnes per day, or 165,000 tonnes per year,” said TPA president Jim Padilla.
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Though the exact plant sites have yet to be chosen, the two regions were selected for their frequent availability of off-grade canola that will be used as the initial feedstock.
TPA has one operating plant in Detroit, which Padilla said it would like to expand if feedstock supply was more stable. In Alberta, neither demand nor feedstock are expected to be a problem.
“The demand is there. Alberta right now has a mandate that says two percent of all diesel fuel will be biodiesel, and that’s in effect as we speak.
“And so what does that mean? It means nearly 180 million litres of biodiesel will be used in Alberta this year and currently Alberta has no commercial production.”
Padilla said he finds it absurd that the province is importing biodiesel in spite of its record as an energy and agriculture powerhouse.
“That’s why we looked at this. We were quite frankly surprised that it hadn’t been done before.”
Canadian investors in a consortium called New West Opportunities Inc. will own the project. Greg Radstaak, communications co-ordinator for New West, said his group consists of about six members, most of them from Toronto and Alberta.
The short timeline for production is designed to take advantage of a 13 cents per litre tax subsidy offered by the Alberta government that expires in 2013, as well as federal repayable loan programs for such projects, also soon to expire.
TPA’s plant in Michigan will be moved to Alberta to become the first operation, and the second will be built on site, Radstaak said.
Radstaak said the plants will each draw product from a 200 kilometre radius. Some crops will be contracted and New West also expects to buy land of its own.
However, Archer Daniels Midland’s November announcement of a $265 million litre facility to be built in Lloydminster will cause New West to re-examine its plans to ensure adequate feedstock will be available. The new plants will use canola initially and then move into oilseed alternatives, Radstaak said.
“In terms of being a new facility, we’re kind of late to the game in the province of Alberta, but other than the ADM announcement, there hasn’t been any viable biodiesel projects that are up and producing in Alberta.”
Smoky Lake County reeve Dareld Cholak said his council and producers in the region are supportive of a biodiesel plant. Officials from TPA and the New West have held numerous meetings in the region.
“By getting the plants in our area … they’ll be able to buy the off-grade canola that the agriculture sector, the farmers and ranchers are having a tough time getting rid off, so it will provide a market for the off-grade canola,” Cholak said.
“Diversification and keeping the people in rural Alberta is our goal more than the assessment and the taxes.”
Feedstock constitutes 80 percent of the expense in making biodiesel so it makes sense to locate close to the source, Padilla said.
He and Cholak also expect the plant will eventually accept feedstock other than canola, including mustard, camelina and possibly pennycress, a prettier name for stinkweed.
“We’d be looking for marginal farmlands that can’t capably grow food grade canola that we could potentially use to grow pennycress,” said Padilla, adding TPA has been part of research work into the use of pennycress for biodiesel that indicates it can produce fuel suited for cold weather engine performance.
Research on the crop has also been done in Alberta.
