Good News?

[ianben]

Found this info in Grain news e-mail

REGINA, SASKATCHEWAN, CANADA — Husky Energy plans to proceed with the construction of a major ethanol facility adjacent to its heavy oil Upgrader at Lloydminster, Saskatchewan, Canada, company officials announced Monday.

The new ethanol plant will be the largest in western Canada with an annual production capacity of 130 million liters. The plant will cost approximately C$90 million to C$95 million to build and is scheduled to be operational by the end of 2005

"Husky Energy is committed to continually improving fuel quality and expanding its operations to meet consumer demand," said John C.S. Lau, president and chief executive officer of Husky Energy. "Husky's goals for this expansion are to make cleaner fuels and to provide ethanol for the refining industry. This initiative will also support our current program of ethanol-blended fuels marketed under our Mother Nature's Fuel brand."

Ethanol is an oxygenate derived from biologically renewable sources, such as maize, other grains or wood waste. When added to gasoline, ethanol promotes fuel combustion, raises octane levels and prevents fuel line freezing, and the Canadian government agency Environment Canada has designated ethanol-blended gasoline as an Environmental Choice product.

"This is a significant investment in Saskatchewan, in the region, and in Lloydminster," said The Honorable Lorne Calvert, Premier of Saskatchewan. "It is a major step towards our goal of growing the economy in a 'green' and sustainable way.

"In addition to the environmental benefits arising from ethanol use, this facility also provides a new market for Saskatchewan grain farmers. It means cleaner fuel and more jobs. We are extremely pleased to see this major expansion in our biofuels production."

Husky Energy is a Canadian-based integrated energy and energy related company headquartered in Calgary, Alberta.

Is this good news for famers?

What crops will they use?

If they use wheat is CWB involved?

From a long way away it seems to make more sence to sell your neighbour to the south energy than wheat or beef.

US is short of energy. Willing to go to war now no WMD must have been for oil dont you think?
Border retirctions on beef and wheat which mostly trumped up just to protect their people.
So if the customer is always right why dont Canadians produce ethonal for the US and do everyone a favour?

[dnach]

Hopefully this is good news, the CWB should have no say what so ever in any grain being used for ethonal production.
Might be a good place to ship cps wheats for a profit, but time will tell.

[charliep]

Ianben

The plant will use Prairie Spring Wheat with perhaps some mid quality (#3) Canada Western Hard Red Spring wheat when weather impacts quality. Not sure of the fit into ethanol but hope can use some other crops like rye and triticale.

Whether the CWB is involved depends on the product output. If it is just wet or dried distillers grains fed domestically to livestock, can buy non board. If dried distillers grains are sold in the export market, then I think (not 100 % sure) would have to buy from the CWB. If by products are used in the human food markets (eg. starch, gluten, etc.), then for sure have to buy from the CWB. My understanding Husky is not targeting the latter market but other processers here in Alberta do and buy a portion from the CWB (I think API buys 15 % - this is a Red Deer Alberta company that produces gluten).

Whether ethanol is a good or bad thing depends on whether it can pay the bills. Most ethanol in North America has some form of subsidy/tax forgiveness involved. As a note (will have to have a Saskatchewanite confirm), the Saskatchewan government has or is looking at mandating an ethanol blend in their gasoline.

Looking for others input?

[chaffmeister]

Re Saskatchewan mandate - the best info I can get is that the SK government has stated that once the provincial ethanol production can satisfy a mandated 10% blend (which would require 130 million litres), the mandate will be implemented. I believe the Poundmaker facility in Lanigan can produce 12 Ml; add the Husky plant with 130 Ml and the NorAmera plant in Weyburn at 25 Ml and you get more than enough to mandate.

I got this from an un-dated web-page on the SK govt web-site. Has anyone got any more recent info?

[ianben]

Thanks guys.
How much wheat will this 10% ethanol inclusion need?
Would that be a significant amount?

I had thought CWB would or should encourage such ventures.
Here our HGCA uses every avenue to promote grain and oilseed use where ever it might be.

Never thought they would be picky over where bi-products where marketed.

Do you have any other organisations which seeks out alternative markets and promote Canadian grains?

[cowman]

Ethanol production is nothing more than a huge subsidy system to get rid of some grain. No way can it compete with oil. Saskatchewan passed a law making it a necessity in fuel production,otherwise no way would it fly. And as with most other goofy government ventures in the end it will probably cost the taxpayer big time!