Iogen Corp. is backtracking on comments made by the company’s executive vice-president this summer indicating that North America’s first cellulose-based ethanol plant will be built in the United States, not Canada.
In a June 29 presentation to the U.S. House of Representatives’ agriculture committee, Iogen’s Jeff Passmore made it clear that American interests had beaten out Birch Hills, Sask., and the County of Minburn in Alberta in wooing what some say will be a $400 million project.
“We are ready to get the shovel in the ground in 2007, in other words next summer, so we would like to get going and break ground on a plant in Idaho.
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“We have selected southeast Idaho as the location for the first facility because it is one of the best wheat straw and barley straw basins in North America,” Passmore told the committee.
But Iogen’s marketing director said backers of the two Canadian locations shouldn’t read too much into Passmore’s comments because he was simply pandering to American legislators.
“We were playing to a U.S. audience there. A decision has not yet been made that precludes Western Canada,” said Maurice Hladik.
Ryan Hall, economic development officer for the County of Minburn, said it has received no official word that the company’s first plant will be built south of the 49th parallel.
“We understand that we are still in the running or (under) consideration for the first plant,” he said.
The county sent a letter to Alberta MP and environment minister Rona Ambrose on Sept. 22, urging the federal government to adopt biofuel and climate change policies that would encourage Iogen to build in Alberta.
Hall said the proposed plant is a $350 to $400 million facility that would use wheat and barley straw to produce about 220 million litres of ethanol a year and would employ up to 100 local residents.
Hladik wouldn’t confirm those details.
But according to Passmore’s presentation, the Idaho Falls, Idaho, plant would be a much smaller facility capable of producing about 100 million litres a year.
Shell Oil Co. and Goldman Sachs & Co., a Wall Street investment firm, have invested in Iogen and have committed to help commercialize its ethanol technology, but nothing will be built until the ethanol company secures a government loan guarantee.
In the U.S. the company has applied for a four-year, $80 million US grant and is applying for a loan guarantee, but both programs are subject to 2007 budget approval.
There are no similar funding programs in Canada but Hladik said that can change in the time it takes to make a cabinet decision.
“There’s nothing in the pipeline in Canada, but the pipeline can be built and delivered in a matter of weeks,” he said.
Iogen is also working on a deal to commercialize its technology with Volkswagen in Germany, but that project is farther behind than the North American proposals.
Hladik said 2007 is still the official target date to begin construction on Iogen’s first commercial-scale plant, a project that was originally proposed to be built in 2002.
But with no government coming forward with a loan guarantee, Passmore’s assertion that the shovel will be in the ground by next summer appears to be as tenuous as his statement that the first plant will be built in Idaho.
“There may be slippage,” Hladik confirmed.
