The dramatic and unsettling events related to the terrorist bombings in the United States add to the arguments in favour of much increased ethanol production in Western Canada.
Grain importers are on edge, ocean insurance rates are rising for Middle East and Asian destinations and there are signs the world economy is slowing.
So far, oil markets are preoccupied with recession and reduced demand. But if the conflict spreads from the current Afghanistan-Pakistan focus to include Iraq and other oil producers, the price could rise.
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For these reasons, Western Canada should pursue ways to provide some insulation against global unrest, reduce grain transportation costs and increase our energy resources. Ethanol is an untapped opportunity.
There are only three ethanol plants in the prairie provinces.
Traditionally, ethanol has not been competitive with gasoline, but with new technology and the rising cost of gas, the gap is quickly narrowing.
And considering the benefits -cleaner burning fuel, rural economic development and reduced reliance on imported fuel -ethanol deserves serious backing.
We hope a Saskatchewan government study due this fall on the potential of expanded ethanol production provides the data needed to determine how to proceed across the Prairies.
Keith Hutchence, a research scientist with Saskatchewan Research Council, wrote in the August edition of Saskatchewan Business Magazine that requiring all gasoline sold in the province to contain 10 percent ethanol would require 160 million litres annually.
That would require 16 plants the size of the only existing ethanol plant in the province, Pound-Maker Agventures.
The main byproduct from ethanol production is a rich livestock feed that would help spur development of another rural development opportunity: feedlots.
Minnesota recently pushed ethanol development, encouraging new generation co-ops to take the lead. There are now 14 plants there, 12 of them co-ops, producing more than 1.06 billion L.
This year and next, Minnesota taxpayers will contribute about $70 million US to ethanol production. In return, more than 1,400 jobs were created, about $80 million worth of imported oil was displaced annually and about 7,500 farm families have invested in the co-ops.
