Plans to build a $100 million ethanol plant near Hartney, Man., got a boost recently in the form of a proposed federal government mandate requiring that all gasoline sold at filling stations across Canada contain at least five percent ethanol by 2010.
“It is obviously encouraging news from the standpoint of our project. It solidifies the fact that this industry is going to move forward and that plants like this need to get built,” said Mark Vandaele of Clean Country Resources, which hopes to begin construction next year.
“It adds credibility to our feasibility study and it sends a message to potential investors that this is an industry that’s coming alive.”
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To meet the coming demand for 2.1 billion litres of ethanol a year once the mandate comes into effect, Vandaele said all the proposed ethanol plants across the Prairies, as well as expansions to existing facilities, will be needed.
“I think it creates a market share for all the ethanol plants,” he said. “Five percent is enough to allow all of us to participate without having to look for export markets.”
He added that a number of lead investors in the Hartney plant had called following the announcement in early December to say that they are “more interested than ever” in helping to finance the project.
With the final draft of the business plan for the 190-million-litre facility being written, a site has already been selected near the small town in southwestern Manitoba. The project would require 22 million bushels of grain from 350,000 acres of land to produce its feedstock of 70 percent feed barley and 30 percent feed peas.
Vandaele, who farms and operates a seed company near Medora, Man., said the success of farmer-owned ethanol companies in the United States inspired him to try the same model in Canada.
In September 2005, a steering committee made up of Vandaele and five local directors, along with a handful of farmers and businesspeople, was formed to look into the details of building an ethanol plant.
“In the past, as producers, we have always been the victims of a rising energy market. We paid the price in fertilizer and in fuel,” he said.
“This is the turning point. We can benefit by supplying raw materials.”
The coal-fired plant, which would run 24 hours a day, with a two-week shutdown for maintenance, would produce 540,000 litres of ethanol daily from 53,000 bushels of grain.
“The requirements are vast, of course,” Vandaele said, adding that at current yields, the plant would eat up 30 percent of the barley grown in Manitoba. Figures for peas are even greater, with just 122,000 acres planted in the province in 2005, well short of the plant’s demand of at least 200,000 acres.
“We see a plant of this size as being the new price setter in the market,” he said. “We’ll set a price and most of the other industries will be competing against us.”
The byproducts, of which there would be a million pounds per day, would be superior to ordinary dried distillers grains from corn, he said, because the pea and barley mash would be higher in protein and competitive with soybean meal.
Some 35-40 jobs would be created, both on the plant floor and in administrative offices, along with up to 700 spin-off jobs.
The project, which still has to pass an environmental assessment, recently passed phase 1 of its water study, which Vandaele called the project’s biggest obstacle. The plant has applied for a permit to draw 1,000 acre-feet per year from the Oak Lake aquifer.
“We have isolated an adequate source of water, so we know we have enough water to run this plant,” he said, adding that the plant would not affect other users in the area.
Phase 2 of the water study may be completed by spring, he said. Once the water and air quality permits are acquired and financing is in place, construction could begin by spring or early summer of 2007.
“We would like to see as much local money as possible in this project, but we are certainly not so naïve as to think we could raise that much in our rural economy,” he said.
Why peas and barley and not wheat?
“We were concerned about being able to secure enough acres of wheat to run the plant,” he said, adding that feed barley is usually the cheaper of the two grains. Peas were added to the mix to boost the protein content of the byproduct to 40-48 percent.
“‘We are just about as much a feedmill as we are an ethanol plant,” he said. “We felt we could take a lot of the volatility out of this project by being in a position to extract maximum value from our byproducts. We want to make a high energy, high protein meal that can compete with the soybean meal that is imported from the U.S.”
With the hog industry consuming more than 400,000 tonnes of soybean meal a year, the Hartney plant’s proponents hope to displace half of that with their own product.
