Fertile Ground

Rising global demand for biofuels and plastics made from canola and other crops is sowing the seeds for a new variety of Alberta agri-business

Sep 1, 2009  

by Mary MacArthur

The lesson of those failed plants is that the venture might have succeeded with the development of small, niche markets that only used small amounts of straw, preventing a stampede of farmers wanting to sell to the manufacturer rather than the local rancher. Smaller markets would have helped supply lines develop slowly and manageably.

Kloeck says the bio-markets are in the middle stage. Demand for new green products is growing as novel uses for agricultural products continue to emerge.

“The most significant thing for agriculture to understand is that this [market] is real. There’s a completely different customer out there and they’re prepared to add value to agriculture. We’ve got to develop new skills and learn how to talk to each other or we’ll just continue to stare at each other over the fence.”

Given the durability of Duckworth’s corn-plastic coffee mug, biofuels might be offering the most obvious proof of that coming market.

Barb Isman, COO for Canadian Bioenergy Corp. in Vancouver, says the federal and provincial governments’ requirements for 5% of fuel to be made from renewable sources will have a huge impact on the biofuels industry, specifically regarding fuel made from canola, one of Alberta’s most lucrative agricultural crops.

Beginning July 2010, the Alberta government will require 120 million litres of renewable-based fuels each year. The federal government’s mandate will likely require 700 million.

Bioenergy’s proposed joint biofuels plant beside Archer Daniels Midland Co.’s canola crushing plant at Lloydminster, would be the largest biorefinery in the province and produce 250 million litres of biodiesel a year. Bioenergy is still working on a proposed 225-million litre canola biodiesel plant beside Bunge Canada’s canola crushing plant near Fort Saskatchewan. That’s all despite the global economic meltdown having slowed development of this market. The key, says Isman, is good planning.

“Now you’ve got to have a plant that integrates you into your source of supply, you’ve got to have scale and a lot of ability to weather financial concerns. It will not be easy to fill that mandate. You have to have a darn fine business plan.”

Despite the financial difficulties of getting a biofuels industry started during a recession, Isman believes a market will develop, but it will depend on the price of biodiesel compared to conventional petroleum. To give the biofuels industry a leg up, most governments have given the industry startup grants. In 2006, the Alberta government pledged $239 million over five years. And over the next few years, new varieties of canola will be developed that will help farmers grow higher yielding crops, which will help ensure supply, and likely spin off further research that, ultimately, could mean more money in the pockets of Alberta farmers. But could the crop, virtually unknown here 25 years ago, prove to be the saviour of the family farm?

For Doug Livingstone, a Vermilion-area farmer, anything that gives farmers another outlet for their crops has got to be good. But this is not the first time Livingstone has been told a saviour for agriculture is around the corner, like the strawboard plants.

“These operations weren’t without some unintended consequences, either by higher costs to producers or loss of products,” says Livingstone.

After having seen too many farmers’ hopes dashed with promises of guaranteed returns on their money, Livingstone will wait from the sidelines and watch the bio-industry evolve. Livingstone believes agriculture will play an important part in future energy production or as replacements for plastics, but not a total replacement. “Bio-industrial can become a big thing as long as we gently ease into the industry,” he says.

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