MEDICINE HAT, Alta. – Canadian agriculture must change direction and expand its narrow focus on food, food quality and food characteristics, according to an Alberta Agriculture official.
“We’ve got to start opening our eyes to what are the market opportunities on the non-food and industrial side, to capture some of these opportunities,” said Matthew Machielse, director of Alberta Agriculture’s Bio-Industrial Technologies Division
“The bio-industrial opportunity should see us move from an economy based largely on petroleum, to a more diversified economy where renewable plant biomass will become a significant feedstock for fuel, materials and chemical products. There’s lots of talk about how the petroleum sector isn’t paying the social cost of the environmental impacts.”
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Machielse said at a reduced tillage conference held here recently that bio-refining is about more than ethanol and biodiesel. It’s about a whole complement of products that have potential, with bio-based ingredients. Three key product streams for the bio-industrial sector include chemicals, materials and energy products.
“The U.S. Department of Energy released a study in 2003 that identified 12 platform chemicals, fundamental to product development, currently derived from petroleum but that have the potential to be derived from bio- based materials,” said Machielse.
“This chemical industry is a multi-
billion dollar industry. For me, it’s a multi- billion dollar opportunity. All we want to do is find what the sliver of that market is that we can feed into, with some ingredients from say wheat extracts canola extracts, or flax oil extracts.”
Machielse said Cargill’s Bio-Industrial and Biofuels Businesses include a range of products. On the ethanol side, those include NatureWorks PLA bioplastics, industrial starches, itaconic and citric acids, xanthan gums and 3-hydroxypropionic acid.
On the biodiesel side, products include industrial oils and lubricants, urethane polyols, renewable oils and glycerine derivatives.
Biodegradable and functional agricultural fibre ingredients present opportunities for use in construction materials, insulation, automobiles, fabrics and paper.
“DuPont, the chemical company, now looks at biomass as their opportunity. They’re looking at agricultural, forestry and municipal waste products, turning them into biofuels, fine chemicals and materials.”
Machielse said the U.S. company Metabolix is looking at producing natural plastics and other products from renewable resources, rather than conventional plastics from petrochemicals.
“They’re looking at switchgrass, which produces a plastic monomer in its leaf. They’ve developed a process of extracting that monomer to create a clean, renewable, plastic-like material to create a biodegradable plastic. But they’re not stopping there and throwing the rest out,” said Machielse.
“Switchgrass is a huge biomass generator. They’re identifying things like ethanol, gasoline and diesel fuels, electric power, heat and other products from the biomass that’s left over, after they extract the high value product from the genetically engineered implanted plastic monomers.”
The U.S. sees biofuel as a national security issue more than one of sustainability or renewability, said Machielse. It wants to replace imported petroleum products obtained from unfriendly countries with a homemade source.
“They are waving that flag loud and strong. They have that momentum. In Canada, we’re way behind as far as having that political momentum.”
He said Canada lags in the adoption of biofuel production, be it in processing, crops, biogas or green methane. He pointed out that in countries like Brazil, it is impossible to buy any gasoline that does not contain a biofuel component.
Machielse said Canada’s biofuel capacity comes from seven plants, which produce about 0.5 percent of renewable fuel for on-road use. If five new ethanol plants now under construction roll into production, that will increase to two percent in 2007.
In the U.S., there are about 150 plants producing two percent renewable content, with a target of four percent by 2012. That represents about 4.5 billion US gallons of renewable fuel out of 140 billion gallons of gasoline consumption.
“In Iowa and Nebraska alone, they’ve got over a billion gallons of new capacity being built there right now. The EU is at one percent renewable content and they want to get to 5.75 percent by 2010. Brazil is currently at 15 percent renewable content,” he said.
Alberta targets for E5, which means all gasoline sold in Alberta would be blended with five percent ethanol, would require up to one million tonnes of wheat or triticale for feedstock annually, by 2010. That would take production from a current 40 million litres up to 300 million litres, with up to $300 million of capital investment required.
Machielse said Alberta consumes about five billion litres of on- and off-road diesel. A short-term target for the same five percent biofuel rate in diesel would require a biodiesel production capacity of 300 million litres in Alberta. That would require up to three-quarters of a million tonnes of canola annually as feedstock and about $200 million in capital investment.
Machielse said Alberta is well positioned to succeed in this new biorefining direction.
“We’ve got tremendous agriculture infrastructure, an energy infrastructure, forestry biomass and a knowledge base. Few jurisdictions have that complement to drive this bioeconomy concept.”
Machielse said large North American corporations are getting on board. General Electric plans to double its investment in environmental research and development – from $700 million US in 2004 to $1.5 billion in 2010, and double revenue from “ecomagination” products from $10 billion to $20 billion by 2010.
Toyota plans to introduce 10 new hybrid vehicles in the near term, Johnson & Johnson bought 18 percent of its worldwide electricity use from green sources and Case New Holland recently announced it will warranty up to B20 blends in all the engines it manufactures.
DuPont has committed to acquiring 25 percent of its revenue from businesses not requiring depletable raw materials, plus getting 10 percent of its energy needs from renewable sources, by 2010.
Another telling indicator is Archer Daniels Midland’s appointment of Patricia Woertz, a former Chevron vice-president, as its new chief executive officer. The American food giant now has an energy executive for a leader.
Machielse said record oil prices are driving the changes. Natural gas and crude oil prices have sharply risen, while glucose prices have remained flat during the past 10 years. As well, energy consumption continues to increase.
“Biorefining is about capturing the value of the gap between sugar and petroleum. Even though we may become more efficient in how we use petroleum products, consumption will continue to dramatically increase. World daily consumption of petroleum has increased four times in 40 years.”
Machielse said the cost improvements and advances in biotechnology areas are progressing.
“New enzymes and fermentation have cheapened the cost of ethanol. In the U.S., we’ve seen it drop from $3 a gallon to below $1 a gallon, based on new technology.”
He said biorefining can be compared to petroleum refining.
“They didn’t stop at gasoline. They continued to determine all the components along the distillation column, pulling off products at different levels. That’s what we mean with biorefining. What are all the pieces we can pull out of crop or forestry biomass?”
But there are significant differences with biorefining compared to petroleum refining. Biorefining is sustainable, with reduced waste and emissions. It can occur in small- to medium-sized facilities located close to where the raw materials are produced.
“Value adding can occur in rural areas more so than petroleum refining. And it’s better than exporting unprocessed grains and oilseeds, along with the jobs that go with that.”
