A biodiesel project planned for the County of Smoky Lake will open up marketing opportunities for farmers within a 400 km draw radius, say project proponents.
The U.S.-based bioenergy company The Power Alternative (TPA) in partnership with Canadian investors plan to open two 66 million litre a year biodiesel plants in Alberta, one near Waskatenau and another in the High Prairie region.
The plants are in response to provincial regulation requiring a two per cent blend of biodiesel, said Shane Pospisil, a principal with Nichols Applied Management and spokesman for New West Opportunities, the group of local, Canadian and U.S. investors.
“The group we’ve pulled together is firmly committed to these smaller regional projects where the supply chains are local or regional,” said Pospisil. Waskatenau is located on a rail line, which will be used to export product, and is close to Fort Saskatchewan where biodiesel will be used on “refinery row,” said Pospisil.
The plant is made of modular units and is waiting to be shipped from Michigan. TPA expects the plant to be operational by the end of 2012.
The plant in the County of Smoky Lake will hire 50 direct employees as well as create 300-350 indirect jobs. The plant will generate between $200-220 million a year in regional expenditure activity, said Pospisil.
The plant will use 500 million tonnes of oilseed a day at full capacity, which TPA expects to draw mostly from within the region.
TPA has held producer information sessions in Vilna, Waskatenau and Smoky Lake, and plans to hold one with the County of St. Paul in St. Paul in mid-December. Pospisil said he has received a lot of interest from farmers in the County of St. Paul following the meetings.
“We’re very excited the announcement was made and that TPA and New West chose our county as the site for the plant,” said County of Smoky Lake Reeve Dareld Cholak. The plant will improve assessment and provide economic development opportunities, he said.
“It will be a great benefit for our agricultural community. Seeing as our county is mostly agriculture driven, it will provide a market.” Farmers will be able to use marginal lands for alternate energy crops or diversify the family farm, he added.
“I think canola producers are looking for another avenue to sell their product,” said County of St. Paul Reeve Steve Upham. “Farmers are having to endure long line ups at some of the places. Anytime we can open a fresh market or a new door, I think it’s good.”
TPA will pay above market price for off-grade canola, said Pospisil. Over the next decade, TPA would like to see area farmers plant energy crops grown for energy content rather than food, like pennycress or mustard seed. The advantage of pennycress is less input costs and it grows well on marginal land, said Pospisil. The freeze point of biodiesel made from pennycress is superior to canola, he added.
The input costs of pennycress are at least $100 an acre cheaper than canola, said Cholak. “The profit margin will be greater.” Pennycress does not need rotation and improves soil quality, he added.
In Alberta, demand for biodiesel is 180 million litres a year. The province does not produce any biodiesel now and all biodiesel is shipped, much of it from Brazil. The transportation of the product from Brazil is “not minimizing environmental footprint,” noted Pospisil.
“Looking out over the horizon, reducing CO2 emissions is going to be critical,” he said, adding U.S. environmental regulation could encourage Albertan exports.
Biodiesel has 78 per cent less CO2 emissions and burns with nearly the same energy output. Several American plants are experimenting with biodiesel.
Pospisil predicts coal fired generating plants will be as big a user of biodiesel as fuel blending.
Biodiesel can also be used in aviation bio-fuels, bio-diluents, bio-fertilizer and bio-herbicide, according to the press release announcing the plant.
