Jon Bjornstad delivered a fence-shaking speech to Saskatchewan biofuel investors last week in hopes that a few might fall off their perches.
“I don’t know what you’re waiting for. You need to start writing cheques,” said the president of C & N Companies, which markets biofuel for nine North American plants representing 1.9 billion litres of capacity.
In his presentation, Bjornstad cast aside common biofuel concerns such as the glut of ethanol now flooding the market and worries that fuel production might reduce food supplies. Instead, he focused on negotiations surrounding a new renewable fuel standard for the United States.
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U.S. ethanol capacity is expected to reach 28 billion litres by mid-2008, outpacing the federal mandate, which doesn’t call for that volume of renewable fuel until it expires in 2012.
Biofuel lobbyists are pushing Washington to adjust the standard to mop up the oversupply on today’s market. So far the signs are encouraging.
The U.S. Senate has tabled a bill that would create a mandate for 136 billion litres of renewable fuel within 15 years, one-upping U.S. president George Bush, who called for 132 billion gallons in his summer state of the union address.
High profile Democratic presidential candidates such as Hillary Clinton are also on board. She announced an energy plan last week that called for 136 billion litres of ethanol and biodiesel production by 2022 and 227 billion litres by 2030.
Bjornstad said there is political will on both sides of the political spectrum, so it is only a matter of time before a new tidal wave of demand hits the U.S. market, generating significant export opportunities for Canadian plants. U.S. firms will be scrambling to keep up with new demand.
“I’d get ready. I’d start building some of those facilities because we’re going to need your help,” he told delegates attending a workshop organized by the Saskatchewan Biofuels Development Council.
Council president Judie Dyck said nothing moves as fast as they would like but there is a concerted effort to establish an industry in Saskatchewan, and the situation south of the border can’t hurt that process.
“They’re going to need our ethanol product,” she said.
Bjornstad, who has 20 years of experience selling petroleum and biofuel, said the looming revision of the renewable fuel standard is not the only reason for optimism in the U.S.
He said there is 15 billion litres of untapped demand for renewable fuel in the southeastern United States, such as Georgia, South Carolina, North Carolina and Florida.
As well, he said that at current prices it is no longer feasible for Brazil to export ethanol to the U.S. That’s 2.6 billion litres of imports that can be filled by producers in Canada and the U.S. that are not subject to duties.
Bjornstad also had encouraging words for those considering building biodiesel plants.
“Your canola-based biodiesel is a phenomenal cold-weather performer.”
He expects canola biodiesel will be an attractive blending option for U.S. soy-based biodiesel plants that want to sell fuel into cold northern tier states.
Bjornstad told reporters after his presentation that one lesson from the U.S. biofuel industry is bigger is better. Many plants that started small soon expanded their operations to take advantage of economies of scale.
“You might as well dig deep and build a decent sized facility now.”
Bjornstad suggested the food versus fuel debate is bogus. He showed a graph of anticipated world soybean and corn stocks that indicated healthy supplies in the system.
“We’re going to have billions and billions of bushels of corn left over after this crop is harvested.”
