There is plenty of buzz about renewable energy in oil rich Alberta, but for grain producers like Doug Robertson, this next generation of fuel better have something in it for farmers.
“The potential of biofuel and biodiesel will only be realized if farmers make money at it,” said the chair of the Alberta Barley Commission.
As a grain and hay grower near Acme, Robertson sees potential in biofuel, but he wants a better deal than he has had in the past for his raw commodities.
Read Also
Manitoba horticulture hits the books
The 2025 Horticulture School in Brandon covered tools to extend Manitoba’s vegetable and fruit growing season, horticulture crop agronomy and new research like peat sustainability
“We can’t be the low end supplier of cheap feedstock,” he said in an interview at a biofuel conference in Calgary on Nov. 9.
“Farmers have played that game too much already. A lot of farmers are pretty skeptical right now that it is going to make them direct dollars. That is part of the hesitancy in it right now.”
At the same time he does not want to bite the hand that feeds him, namely the province’s giant livestock feeding industry.
“The cattle industry has helped producers survive in this province,” he said, but added there has to be a better way to satisfy everyone’s needs.
The barley commission wants plant breeders to create a high yielding, high-starch barley for ethanol, another variety with high beta glucan for food and high protein grain for the livestock industry.
But these customers must be willing to pay more for tailor-made grains.
At the same time new biofuel plants built in the province must be prepared to pay a fair price.
“We’re not going to do it for the prices we get now with the hope that someday it will be worth more, because we know where that leads,” Robertson said.
The Alberta government is offering incentives to build biofuel plants with the hope of benefits in the future. The province has announced a $209 million credit program and $30 million for commercialization and infrastructure support.
Agriculture minister Doug Horner hopes that attracts more investors.
He told a biofuel meeting in Red Deer on Nov. 10 that about $750 million worth of investment is coming to Alberta to build this industry within the next four years.
“The benefit to Albertans is projected to be at least $2.4 billion in direct sector revenue to the Alberta economy,” he said.
Horner is a strong believer in this industry and he wants farmer participation to improve incomes and rebuild rural communities.
It has been difficult to find patient venture capitalists for agriculture projects because the returns are slow to come. New generation co-operatives are favoured because farmers could invest with help from the Alberta Financial Services Corp.
As people learn more about the co-op model, Horner is confident investment will happen in rural areas.
He does not want a subsidized industry.
Alberta offers support of 14 cents a litre on biodiesel or ethanol and six cents a kilowatt hour on electricity that is generated from biomass. Other countries around the world are more generous. The U.S. subsidy is about twice what is offered here.
“I don’t think we have to match them,” Horner said in an interview.
“There are other factors that come into play to become competitive, like the distance to your raw material supply, distance to your marketplace, the business and tax environment you have to work in.”
However, British Columbia energy consultant Don O’Connor said it is unfair to expect renewable fuel to stand alone.
The federal government provided $40 billion in incentives to the fossil fuel industry in the last 30 years. There would be no Canadian nuclear industry without taxpayer help. Electrical power was developed for the public good with backing from government.
However, a lack of money and experience with biofuel dogs Canada. No one is sure what the market might do so it is hard to get financing.
“It is not easy to finance a new industry,” O’Connor said.
The industry also needs to make sure profits are shared with producers rather than provide subsidies to produce cheap food. The world spends $250 billion per year on farm subsidies, which has caused tremendous market distortions.
“Canadian producers compete on the world stage with some of the lowest levels of government support in the world,” he said.
A considerable amount of feedstock is exported and that could be cost competitive enough to stay home and produce biofuel, O’Connor said.
