Optimism is sprouting within the ethanol industry like tulips on a warm spring day.
Canada plans to boost ethanol production to almost four times its current level in the next few years. For farmers, that could mean more markets for grain and straw.
But no one knows how much Western Canada might benefit from the expected increase, because details of the plan are not yet in place.
“The devil will be in the details,” said Bliss Baker, president of the Canadian Renewable Fuels Association.
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“There’s not a ton of detail that’s available yet.”
Baker said the federal government has pledged to work on details in the coming months after the federal election.
Canada produces about 300 million litres of ethanol a year. Ottawa wants to increase production as part of its commitment to reduce greenhouse gas emissions.
Most ethanol production takes place in Ontario and Quebec. The renewable fuels association lists three plants in Western Canada, one in each prairie province.
Corn drives much of the ethanol production, with wheat a distant second. There also is growing interest in using biomass materials, such as straw from cereal crops.
Baker is confident the political will exists to crank up ethanol production and said the industry has built a solid base of knowledge and technology.
One of the challenges now is finding the capital needed to build more plants. Baker said Ottawa’s commitment to the industry should help attract investors.
“I think the future looks bright for ethanol, particularly in North America.”
Iogen Corp. shares that optimism and is looking at Manitoba and Saskatchewan as potential sites for ethanol plants. An announcement on at least one site could come early next year.
The Ottawa-based biotech company envisions a commercial plant that would use cereal straw to produce about 225 million litres of ethanol per year.
Terry Perkins, the company’s chief financial officer, estimated it would take 700,000 tonnes of straw annually to feed the plant.
“We’re looking at providing farmers with a second source of income from their crops.”
While encouraged by Ottawa’s commitment to ethanol production, Perkins sees other signs that point to an expanded industry.
South of the border, American states such as Minnesota have legislated the use of a 10 percent ethanol blend in fuel. With increasing concern about smog in major Canadian centres, Perkins figures it is only a matter of time until similar action is taken in Canada.
When that happens, he said, the demand for ethanol likely would justify construction of 20 ethanol plants such as the one Iogen proposes for Western Canada. Perkins said most of those plants would be built on the Prairies, where grain straw is most abundant.
Kerry Keating, general manager of API Grain Processors in Red Deer, hopes the government’s latest commitment to ethanol will translate into more money for research and development. Part of that research needs to look at the merits of ethanol as an aviation fuel, he said.
API uses wheat to manufacture about 26 million litres of ethanol a year. Most of it is sold to the United States.
Keating said he welcomes more ethanol manufacturers in Western Canada because they would help generate the volumes of ethanol needed to get it carried by major fuel retailers on the Prairies.
Keating also hopes Ottawa will commit more effort to promoting ethanol and that more thought will be given to using it in government vehicles.
