With last week’s federal budget announcement, the Saskatchewan Rural Municipality of Birch Hills feels it is one step closer to attracting a world class cellulosic ethanol facility.
The 2007 budget set aside $500 million over seven years to invest in large-scale facilities for the production of the next generation of renewable fuels. The document singled out Iogen Corp. as one of the companies that might use the fund to build a plant.
Iogen has stated it will build its first cellulosic ethanol plant in one of three locations – Idaho Falls, Idaho, Vegreville, Alta., or Birch Hills.
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Observers feel the March 19 budget seals the deal for one of the two Canadian locations.
“I’d be surprised if a large portion of the $500 million didn’t go to Iogen considering the amount of money the federal government has already put into that company,” said Ken Graham, president of the Saskatchewan Ethanol Development Council.
Iogen declined to expand on its two-paragraph News release
news reacting to the budget.
“This is a great budget for cellulose ethanol,” said company vice-president Jeff Passmore.
“Iogen looks forward to working together with the government of Canada and Shell Canada to build a cellulose ethanol industry that reduces greenhouse gases in the transportation sector.”
That is quite a shift from last month when the company was touting an $80 million grant it received from the United States government to build a 68 million litre plant in Idaho and said it was in negotiations for a $200 million US loan guarantee to accompany that grant.
At that time company officials said the location for the project was still undetermined.
Earl Mickelson, reeve of the RM of Birch Hills, feels the $500 million incentive is pushing the company closer to making a site selection announcement. He has been in close contact with Iogen officials since budget day.
“They say that this is another step towards what they need to have,” said Mickelson. “What we’ve established is that things are in place that it’s more likely they’ll be able to build their first plant in Canada as opposed to somewhere else.”
According to one industry pundit, that Canadian site will almost certainly be Birch Hills.
“I think Iogen has been fairly clear that their leading site in Canada is the Prince Albert area,” Kory Teneycke, executive director of the Canadian Renewable Fuels Association, was quoted saying in the Saskatoon Star Phoenix.
Mickelson said the Birch Hills plan calls for a facility capable of producing 220 million litres of cellulosic ethanol per year and employing about 90 people.
The plant would require 800,000 tonnes of wheat and barley straw annually from an estimated 1,200 area farmers, provide a $30 to $50 million injection into the local agricultural economy and create 10 to 15 full-time jobs in trucking and custom baling.
Mickelson agreed with Teneycke that Birch Hills has become the front-runner, partially because it has one of the best straw basins in the country and because of buy-in from the community. Thirty-eight surrounding rural municipalities support the Birch Hills plant, as does the Prince Albert Regional Economic Development Authority.
The community has the road and rail infrastructure to support the plant and the provincial government has committed to removing policy impediments identified by Iogen.
