``For us it's the best of all worlds,'' Canadian Bioenergy Corp. president Doug Hooper said in an interview after announcing the new plant would be located near Edmonton and use Alberta canola crops.
The 12.5-acre (five-hectare) site is beside a Bunge Canada canola processing operation near Fort Saskatchewan, Alta. The spot is also within reach of refineries and pipelines that make and distribute conventional diesel.
The plans call for construction of an organic fuel refinery, currently estimated to cost $65 million, by 2008. The plant would initially make 114 million litres of biodiesel per year, then eventually double its output as demand grows.
Rather than build a separate distribution and sales network for organic fuel, Canadian Bioenergy plans to blend its production into conventional diesel.
Biodiesel can be used in pure form without engine modifications. But industry and government alternative fuel strategies call for the development of five to 20 per cent biodiesel blends.
Canola makes the best organic fuel, Hooper said. Other materials such as waste restaurant kitchen grease and tallow can be used, but fuel made from them is more difficult to keep in suitable condition for vehicles in cold weather.
The project remains at an early stage. Canadian Bioenergy, a private firm that does not disclose the identities of its backers, has reserved a location with an option to purchase the refinery site. The next step will be a feasibility study, the firm said.
A key item will be forthcoming federal and provincial policies to encourage biodiesel development, Hooper said. His firm is hoping for government decisions later this year. Canadian Bioenergy will also invite Alberta canola growers to participate in the project.
Up to 10 biodiesel refineries could sprout in Canada over the next five to 10 years if government renewable-fuels policies make the budding industry competitive with its counterpart in the United States, Hooper predicted.
At a project announcement in Morinville, Alta., Alberta's Industrial Heartland Association executive director Larry Wall said his alliance of Edmonton-region governments and industries has been talking to Canadian Bioenergy about an organic diesel refinery for about a year.
As home to Western Canada's biggest concentration of refineries and petrochemical plants, Wall says, ``we recognize the value of alternative energy sources as both a viable business opportunity and for the role they can play in the energy future of the country.''
Canola Council of Canada president Barb Isman said: ``We have been working with federal and provincial governments to ensure canola-based biodiesel is a central part of Canada's renewable fuel strategy. A project of this nature helps bring the industry one step closer to that goal.''
About two-thirds of Canadian canola is sold as a bulk commodity with no value-added processing, Hooper said. ``We could use the raw resource to build an industry.''
gjaremko@thejournal.canwest.com
Edmonton Journal