Oil Prices

[ianben]

Hi Charlie
We have debated the pros and cons of the grain market for many years here, which I have enjoyed, and apart form managing risk have come to the conclusion farmers can have almost no influence on supply demand and therefore price.

Kyoto and green issues do seem influenced by the amount of oil a country has UK and Canada have and are not embracing bio-fuels like US and other non oil producing EU counties like Germany.
The EU subsidy is a tax break which is justifided by their cleaner susainable properties.
So is this a subsidy?
But when did a government like collecting less tax?

As farmers do we need to involve ourselves in the debate about the rights and wrongs?

However I do feel I need to educate myself on the basics of both bio diesel and ethanol in order to encourage this new demand.

More demand must be good for farmers but we need to know the real facts in order keep these new customers happy.

[wd9]

Ianben, no not for ethanol, just BD.

Road tax and fuel tax varies province to province. Manitoba is at 15 cents a litre off for BD production and I think BC will be at almost the same level. I must admit, the tax thing is complicated. Just guessing on them and they keep changing too, but will try and post better numbers on Monday on the taxes.

The 30 cents per litre the US has makes it all worth it. The challenge for infrastructure investment in Canada will be harmonization with the US or we simplt will not get crush capacity or BD facilities as they all will be in the US. Green takes green for a country to be green.

Also Charlie, you make it sound like the oil industry gets no incentives and are a pure business model.

[pilllypilsner]

first of all it was m. king hubbert who predicted peak oil in 1956.
second,has the oil price/canola price
ever been so out of whack.what happens if it tightens.i'm all for alternate energy but people should know the risks
before they put their money in something.
third,80% of the world's oil comes out of the strait of hormuz.iran is no push over and when war comes the price
of oil could go very,very high.

[WRAPper]

I think that's one of the key's WD9, The US is desperate to reduce it's offshore energy supply needs and thusly are throwing huge dollars at research and development right now. As is Europe, Canada having what they feel is an exportable surplus is lagging behind, read yesterday that we are 6 to 7 years behind the EU in renewable's.
Charlie ,
I agree with where you come from on this issue, but unless there is some form of parity of incentive with other jurisdictions will we Alberta farmers see this industry develop elsewhere and then see the continuation of the cycle of exporting raw unprocessed products elsewhere for further value added?
That flies in the face of Doug Horner's and the Alberta Government's stated goals of increased processing.
As WD9 has said don't believe the oil and gas industry hasn't been helped along the road at times.
Where's the ITC's in the budget for Biodiesel research and development?

Youu asked about the feed complex charlie, lets keep the canola meal here for our feeding industry 34% crude protein value there.

Another question should and could we be looking at lines of high yielding cultivars with not always great chlorophyll profiles to use in Biodiesel. (no WD nexera doesn't yield well enough)
Remember cyclone, huge yield 40 percent green seed,(ready in late october) but would farmers grow it or a variation at 70 bushels and 4 and a half dollars? IP to the biodiesel plant? Winter Canola?
Lot's of questions but maybe for a change lets look at it as lot's of opportunities.
Solutions not problems , that's the attitude we need to have here.

[wd9]

Oil content will be the key for alternative fuels. What to do with the mountains of meal and DDG's from ethanol will be another huge oppportunity for innovation - or cheap fertilizer.

Trouble with 60% oil content however, it is difficult harvesting little round jello packs as radically different seed structure will be required. Yield is only a small portion of the answer, oil content is where several problems can be addressed - meal, oil and oil seperation (less processing).