As Canadian politicians continue to work out the details of a proposed biofuel mandate, U.S. lawmakers are pushing for a dramatic expansion of the fully operational renewable fuel standard in their country.
Earlier this month, on the first day of the new Congress, a group of midwest senators, including prospective presidential candidate Barack Obama, introduced legislation that would take the ethanol and biodiesel industries in that country to a new level.
The BioFuels Security Act calls for 30 billion US gallons (113.56 billion litres) of ethanol and biodiesel production by 2020 and 60 billion US gallons (227.12 billion litres) by 2030, more than a 10-fold increase over the 5.3 billion US gallons (20 billion litres) of ethanol produced by 110 biofuel refineries in 2006.
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Those are far more ambitious targets than the ones set out in the current mandate, which calls for 7.5 billion US gallons (28.39 billion litres) of renewable fuel by 2012.
“This legislation lays the road map to a long-term ramp-up in domestically produced renewable fuels,” said Iowa senator Tom Harkin, one of the sponsors of the bill.
“I believe if we are to attain national and economic security for our nation, we can and we must achieve these aggressive goals.”
There were news reports that U.S. president George Bush would unveil a similar proposal in his Jan. 23 State of the Union address to Congress.
Talk of such a dramatic cranking up of the U.S. mandate is music to the ears of western Canadian farmers intent on building an ethanol facility in Saskatchewan.
“I’m extremely pleased,” said Rob Hundeby, director of Gardiner Dam Terminal Ltd.
“It looks great for our plant and for any other plant that is considered being built in Canada.”
The group of Lake Diefenbaker area farmers plans to build a 100 million litre plant next to its elevator at Strongfield, Sask.
“Because we can ship ethanol freely from Canada to the United States, the United States becomes an obvious market for our ethanol,” Hundeby said.
GDT Ltd.’s business plan, which was to be made public this week, calls for servicing Canadian and intercontinental markets, so the proposed U.S. mandate increase couldn’t have happened at a better time. Hundeby said the company will be able to qualify for the 51 cent US per gallon (16 cents Cdn per litre) excise tax once it denatures the ethanol by adding five percent gas to the fuel produced at that plant.
That more than compensates them for the three cent Cdn per litre (11 cents US per US gallon) freight bill for shipping ethanol from central Saskatchewan to the American Midwest.
With 850 million litres (225 million US gallons) of ethanol capacity already on tap, Canada is almost halfway to meeting the Conservative government’s proposed 2.1 billion litre (555 million US gallon) mandate by 2010. Hundeby said all it will take is another dozen plants the size of GDT’s proposed facility to meet that goal, which isn’t a lot.
“That is why the U.S. market is very significant,” he said.
Politicians south of the border seem to be proceeding with more urgency than those in Canada. The American mandate just kicked in last year and already legislators are talking about raising the bar.
Meanwhile, the Canadian government recently proposed a mandate that will start in 2010 for ethanol and 2012 for biodiesel.
Proponents of the GDT project and other western Canadian ethanol and biodiesel ventures are looking to the federal government for further details on the mandate and the $200 million Capital Formation Assistance Program announced on Dec. 20.
“We’re eagerly awaiting how farmers can participate in the benefits of ownership,” said Hundeby.
