Reports have surfaced that a $400 million canola crushing plant and biorefinery project planned for Alberta is not proceeding.
In April 2007, Riverstone Holdings, the Carlyle Group and Dominion Energy Services announced they would build a 379 million litre canola crush facility, a 379 million litre ethanol plant and a 379 million litre biodiesel facility near Innisfail, Alta.
The initial plan called for ground breaking in the summer of 2007 with commercial production starting in the fall of 2008.
Those plans never came to pass.
About a year after Riverstone made the initial announcement, a company spokesperson said the project had been held up by a missing permit from the Alberta Energy Resources Conservation Board but that work would begin as soon as the document was in place.
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However, according to a spokesperson for a rival Alberta biodiesel project, the Riverstone plant won’t be providing it with competition.
“I’ve heard that that one is no more,” said Angela Reid, vice-president of BioStreet Canada, which is working to build its own 225 million litre biodiesel plant in Vegreville, Alta.
Reid wouldn’t divulge where she heard the news but said BioStreet has a lot of eyes and ears on the ground who have a good understanding about the stage of various projects.
Riverstone was contacted for this story but declined to provide an update of its Innisfail plans or to comment on the report that the project was dead.
JoAnne Buth, president of the Canola Council of Canada, said she hasn’t spoken to the principals behind the project in more than a year.
“It’s not something that we’ve put into our estimates of crush capacity coming on stream,” she said.
The council is counting on a combined 2.5 million tonnes of annual crush capacity to be added by Cargill Ltd., Richardson International Ltd. and Louis Dreyfus Canada Ltd.
“We know where (those) projects are at,” Buth said. “We know they’re building.”
Few people seem to know anything about the status of the Riverstone project, including local economic development officials.
Dale Mather, chief administration officer for the Town of Innisfail, could offer little insight on the two-year-old project.
“We haven’t heard from those parties for months and months now,” he said.
A spokesperson for Red Deer County had a similar tale.
“We have no updated information on the status of this project,” said corporate communications manager Donna Brinkworth.
A spokesperson for the Alberta Biodiesel Association said it does not comment on member projects.
A spokesperson for Dominion Energy was contacted for this story but did not return calls.
If the project were to proceed as originally outlined, it would create the largest ethanol and biodiesel plants in Canada. The biorefinery would consume one million tonnes of wheat and 800,000 tonnes of canola annually from a 250 kilometre radius of Innisfail.
The companies behind the proposal have a track record of investing large sums of money in energy and power projects. Riverstone, a private equity firm, manages $17 billion US in six investment funds, including the world’s largest renewable energy fund.
Buth said companies made a flurry of biodiesel plant announcements a few years ago, but nothing is being built partly because the price of crude oil has since dropped and the price of vegetable oil has risen, making the projects uneconomical.
The global economic recession made matters worse by creating a challenging environment for companies to attract the financing they need for capital-intensive projects.
“Across the board, things have been much slower than we ever expected,” Buth said.
