Petroleum companies are excited about a new technology that could replace biodiesel, which has some canola groups worried.
Hydrocracking is a process that allows diesel producers to meet their renewable fuel obligations by mixing vegetable oil directly with crude oil, bypassing the need to add the expensive blending and transportation infrastructure associated with biodiesel.
“It is sure a lot more effective and efficient way of creating that fuel,” said Ted Stoner, vice-president western division of the Canadian Petroleum Products Institute.
Hydrocracking is a catalytic process that breaks larger molecules into smaller ones, producing a diesel blend that is materially identical to regular diesel.
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The technology is in its infancy, with some pilot plant activity happening in South America. Similar testing would have to occur in Canada before it would be adopted by oil companies here.
Once the process has been refined, the technology would allow petroleum companies to eliminate the challenges associated with biodiesel.
“You would end up avoiding any infrastructure for blending tanks, and trucking biodiesel all around the place. It would just go by pipeline, the same as the regular diesel,” said Stoner.
Saskatchewan Canola Growers executive director Judie Dyck is nervous about the impact hydrocracking would have on the country’s fledgling biodiesel industry.
She wonders if Canada’s canola industry dropped the ball by allowing petroleum companies to include two words in the Canadian Renewable Fuels Strategy, a document designed to guide the government in writing its biofuel policy.
Dyck would rather the strategy urged the federal government to implement a two percent “biodiesel” mandate than the “renewable content” mandate proposed by the Canadian Renewable Fuels Association and endorsed by national canola groups.
If the government adopts the “renewable content” language when it unveils its long awaited biofuel policy, it will pave the way for petroleum companies to fill the mandate via hydrocracking technology.
That would be the death knell for the biodiesel industry and for farmer dreams of participating in that value-added venture, said Dyck.
“If we don’t have a specific biodiesel mandate, then I am not encouraged that primary producers will have any great opportunity to participate in the biodiesel industry,” she said.
Barb Isman, president of the Canola Council of Canada, said the petroleum companies wanted the ability to fill their entire renewable fuels obligations with ethanol.
The council supported the “renewable content” wording because it was the only way the oil companies would agree to any kind of diesel-related mandate. It was that or nothing.
“The reason that the canola industry agreed to support the compromise was so that we could move forward and not essentially end up having the renewable fuel standard filled only by ethanol,” she said.
The final say on the wording is up to the federal government, which is expected to unveil its biofuel policy before Christmas, but it is anticipated policymakers will rely heavily on the advice they received from industry.
Isman said the council would prefer to see a biodiesel industry meet the mandate than a hydrocracking industry, but she pointed out that both technologies would require canola oil.
She noted it will be a lot easier for a proven technology like biodiesel, which is already in small-scale production in Canada, to meet the proposed 2010 mandate than a technology that is still evolving.
“(Hydrocracking) is theoretical. It doesn’t exist anywhere,” she said.
But Stoner said it usually takes three to five years to iron the kinks out of new refinery technologies, so it is conceivable Canadian petroleum companies could have hydrocracking in place by 2010.
“That would be the soonest in my opinion,” he said.
