New Brunswick's bioenergy still an infant industry
DERWIN GOWAN, TELEGRAPH-JOURNAL Published Friday August 1st, 2008
Agriculture Eastern Greenway Oils Inc. opts for low volume, high margin
Diesel fuel made from farm crops might never seriously challenge the stuff the oil companies pump out of the ground.
A tiny Carleton County operation hopes to survive by turning canola oil into fuel additives, an ecologically correct way to suppress dust on gravel roads, even penetrating oil to help mechanics loosen rusty bolts.
Eastern Greenway Oils Inc. in Waterville launched its new product Penetrol in some auto supply stores six to eight weeks ago. It works better than WD-40, claims Ray Carmichael, EGO's business development manager.
Biodiesel makers cannot pay the prices that food processors offer for canola, said Carmichael. "You can't take the queen of the ball and turn her into diesel oil."
Neither can made-in-New-Brunswick biodiesel compete with biodiesel from the United States, with its federal subsidy of US$1 per gallon, or 26.5 cents per litre.
Further, the oil industry can still sell petro-diesel cheaper than biodiesel, world oil prices notwithstanding. Most other provinces offer incentives to burn biodiesel and ethanol in highway vehicles, but New Brunswick does not.
If the company cannot compete with a high volume, low margin product such as fuel, it might make a go of low volume, high margin products including penetrating oil and fuel additives.
The city of Fredericton uses EGO's fuel additive, 4 Plus Premium, in its transit buses. This additive improves combustion to reduce carbon monoxide emissions, and lubricates the fuel pumps - something sulphur did before the advent of low-sulphur fuel, Carmichael said.
BIO-D Énergie, New Brunswick's other biodiesel producer at Clair, in the Madawaska panhandle, opted for a different business model.
André Long, a farmer, bought the former Ouellett Feeds mill in 2006. The mill turns crushed canola and soybean meal into livestock feed. The waste oil from making the meal serves as raw material for biodiesel which the company burns in its fleet of 50 trucks in New Brunswick, Quebec and Ontario.
With these two small operations, biodiesel is still an infant industry in New Brunswick. EGO employs, besides Carmichael, one salesman and one person to run the plant, he said.
The one serious proposal to produce ethanol from New Brunswick farm crops, Roach Ethanol near Grand Falls, is not as far along as the two biodiesel producers. The Roaches, a farm family, plan to produce ethanol from grain, using gasified wood for energy.
In 2007 the federal government contributed $75,000 towards a feasibility study on the Roach Ethanol proposal. The family did not wish to comment this week on the status of the project.
An ethanol plant would cost in the tens of milliions of dollars, said Kevin Shiell at the Centre of Excellence in Agricultural and Biotechnolgical Sciences in Grand Falls, a branch of the New Brunswick Community College Edmundston.
Not including the building, a person can build a biodiesel plant for $100,000, said Carmichael.
Ottawa wants Canada to burn more ethanol and biodiesel. The provincial government's discussion paper on taxes states that New Brunswick will "explore the possibilities" for biofuels, but the industry faces challenges.
The farm-gate price for canola went from $250 per metric tonne in 2005, to $350 last year, to between $530 and $560 this year, Carmichael said, driven by demand for protein in India and China.
"If we could get high oil prices with low canola prices ", he said. Or, stick to the low volume, high margin plan.
Some feedstocks might yield more value in products other than biofuel, said John Argall in Fredericton, executive director of the provincial industry group BioAtlantech. The starch in cull potatoes, for example, could serve as the base for compostible plastic.
New Brunswick farmers planted about 2,000 acres of canola this year, said Carmichael. Most of this will go for table oil. A commercial crushing plant might require 10,000 acres, he said.
Fields gone to alders across New Brunswick might grow grain for ethanol, said Shiell.
In a paper for the Falls Brook Centre in Knowlesville, Carleton County, in 2006, Julia Ostertag cautioned against clearing forest to grow fuel.
Biofuel could provide another market for rotation crops for potatoes, she wrote. Small plants under local control would yield the maximum economic and environmental benefits, she argued.