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Biodiesel boom

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Sensi Advanced Grower
Sensi Advanced Grower

Joined: 09 July 2004
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    Posted: 11 January 2006 at 12:29
ARBORG — When some bureaucrats suggested Finance Minister Greg Selinger drop the provincial tax on biodiesel fuel, Selinger wanted to hear their arguments.

Manitobans will send $2.5 billion to Alberta this year to pay for gasoline and natural gas, they explained.

But the province could keep tens of millions of those dollars in Manitoba — possibly hundreds of millions within a few years — if biodiesel fuel cost less than regular diesel.

Selinger didn’t need any arm-twisting.

Last month, the province dropped the road tax on pure biodiesel, reducing its tax by 5.5 cents per litre versus regular gasoline. That’s just a start.

In case you haven’t noticed, the biofuels revolution is on.

Most Manitobans know about the province’s plan to have 85 per cent of gasoline in Manitoba blended with 10 per cent ethanol.

The target date is now mid-2007, when the Husky Oil ethanol plant in Minnedosa should have enough capacity to meet demand.

But what does biodiesel mean for you, and for Manitoba?

It means fewer harmful emissions from large vehicles with diesel engines like buses, farm machinery, semi-trailers and road equipment if they burn biofuels — which are made from vegetable oil or animal fats — in place of fossil fuels.

A recent study in Ontario found evidence that diesel fumes are a carcinogen. You could breathe in the diesel fumes just by driving behind a semi-trailer truck, or standing at a bus stop.

Biodiesel fuel cuts emissions at an exponential rate. A 20 per cent blend of biodiesel reduces harmful emissions by 50 per cent. Biodiesel also means more money will stay in Manitoba. At current gasoline prices, the province’s ethanol strategy will keep $65 million in the province.

The biodiesel strategy has potential to keep another $25 million in Manitoba, if five per cent of diesel fuel imports are displaced. But the dollars could easily reach 10 times that.

The reason is that diesel engines are proving they can run on 100 per cent biodiesel fuel, although many manufacturers still want more testing.

The catch is biodiesel needs higher blends in winter months because cold increases its viscosity.

So Manitoba Hydro is using a 20 per cent biofuel blend in its trucks in summer, and just a five per cent biodiesel blend in winter. The City of Minneapolis uses a 20 per cent blend in winter, but its trucks are parked indoors at night.

Biodiesel will also save you money. Pure biodiesel is currently selling at five-to-six cents per litre less than regular diesel fuel.

Drivers of diesel engine vehicles like Volkswagen Jettas or Golfs, Mercedes Smart Cars or trucks larger than three-quarter ton can benefit.

The City of Brandon is now running a bus on biodiesel. The City of Winnipeg, with a much larger fleet and much more equipment, will be using biodiesel fuels in the future, it’s just a matter of when.

Manitoba Hydro is already running about 60 medium-sized to heavy trucks on biodiesel fuel blends.

But it’s in the country where the benefits will be greatest.

Not a week goes by without an announcement that some rural community in Manitoba is building a biodiesel plant.

Brandon is building one, so is Shoal Lake, northwest of Brandon, and Dauphin is looking at it.

Big investors in Dugald are lining up to construct one, and Beausejour recently scrapped plans to put up an ethanol plant in favour of a biodiesel plant.

The reason for so many small plants is that giant, economy-of-scale plants aren’t really more cost-effective when it comes to biodiesel.

About 70 per cent of the cost of biodiesel is the foodstock, not labour. Plus, an ethanol plant costs a minimum $60-$70 million, versus $1-$2 million for a biodiesel plant.

Also, local communities planning to build biodiesel plants have a built-in market.

Urban centres and rural municipalities have municipal road equipment (snow plows, graders, etc.), emergency vehicles, and school division bus fleets that run on diesel fuel.

Then there are local farm customers with tractors and combines to run, and trucking firms with their big rigs. Winnipeg is headquarters to 13 major trucking companies.

The biodiesel plants will also add another market for farmers’ canola — the best crop for making biodiesel because it has the best flow in cold temperatures — and will apply upward price pressure on canola crops.

The residual meal from crushing the canola, which is used as livestock feed, will displace much of the 250,000 tonnes of livestock feed, mostly soy meal, that’s imported every year into Manitoba from the United States.

Six biodiesel plants are expected to be running in Manitoba by this time next year, and another six are likely to follow. In biodiesel, Manitoba is way ahead of the rest of the country.

Each of the biodiesel plants will need about 10 full-time staff, operating three shifts, adding very welcome employment in rural regions.

Jobs will pay relatively decent wages of $12-$16 per hour. Plants will also add trucking jobs each to deliver their biofuel. Why is Manitoba so far out in front of the other provinces on biodiesel?

Arborg farmer Paul Bobbee smiles. Bobbee’s farm, which he runs with brother Dave, is about 100 kilometres north of Winnipeg. In the community, Dave is known as the sane one, Paul is the one who flies off on tangents. Paul is like the kid who is always mixing soft drinks — Fanta Creme Soda with Grape Crush and Cotts lime — to invent a new flavour.

That’s how he started making biofuels. He tried crushing flax, hemp, mustard, wild mustard (a weed), and off-grade canola, a nearly worthless crop. Then he took the oils and put them in his vehicles to see how they performed.

The off-grade canola was by far the best, and is the main ingredient that will be used in biodiesel production in Manitoba.

Paul, 51, along with Bob Lee, Interlake Development Corporation manager, approached the province with the findings.

“They said they’d rather talk about ethanol,” Paul recalled.

But the province remembered him and later invited Bobbee on an alternative energy tour through the United States. It opened Paul’s eyes, but it opened the province’s eyes more.

The government immediately struck a biodiesel advisory committee.

The Bobbees, with support from the province and the Interlake Development Corp., opened Manitoba’s first biodiesel plant last February, called Bifrost Bio-Blends.

Its biggest customer is Manitoba Hydro, which will buy 50,000 litres per year to start. It is also supplying to a northern mining company.

And, of course, a lot of people around Arborg are using biodiesel.

“I carry some jugs along with me (in his diesel-engine Golf) all the time to hand out to friends,” Paul said.

Farmers have large diesel storage tanks on their farms. Bulk gas dealers deliver the diesel fuel, and farmers simply mix in the pure biofuel to the blend they want.

Paul has run his Golf on pure biodiesel for 25,000 kilometres, and claims his engine has never run better.

Biodiesel tends to act as an engine cleanser, increasing engine life by as much as 65 per cent.

On the negative side, studies show new vehicles using biodiesel may get three to four per cent less mileage, versus regular diesel fuel.

Still, diesel engines get much better mileage than regular engines.

Also, older cars tend to get about 14 per cent better mileage performance because the biodiesel cleans out their carbon buildup. Paul is now deluged with phone calls from across Canada from communities wanting advice on how to start their own industries. “There aren’t many plants operating yet, or people with expertise,” he said.

“Paul is a real pioneer in the industry,” said Shaun Loney, provincial director of energy policy. “He takes the time to sell the industry. He goes out on cold winter nights to talk to groups.”

Making biodiesel fuel isn’t rocket science. First, you crush the seed to extract the oil. The canola oil is then mixed with methanol and sodium hydroxide — lye.

It’s heated up to 400 degrees Farenheit, then the heat is dropped down to 160 degrees. The chemicals interact and glycerol settles at the bottom along with other impurities.

Glycero is a byproduct sold to cosmetics, food and pharmaceutical industries.

Then you drain out the top 90 per cent, and mist it with water. The methanol attaches itself to the water, and again settles down to the bottom. What’s on top is the biofuel.

Lee is spearheading biodiesel development around the province, while the Bobbees reduce their role to focus on their primary businesses: the farm and seed crushing.

Lee has set up a structure of 18 local investors, including himself, the Bobbees, and the community’s development corporation, to take over ownership of the biodiesel plant, and expand it to meet commercial demand.

In total, investors have put up $280,000.

A provincial program where individual rural investors can reap a tax credit of 30 per cent, is expected to raise another $400,000. Other financing includes a $250,000 capital grant from the province, once Bio-Blends completes its new building (the province has put up $1.5 million to support small and medium size bio-diesel projects in Manitoba), and a $550,000 loan with the province.

Communities investing in the biodiesel plants is a no-brainer, Lee said.

Manitoba burns 850 million litres of diesel fuel a year. Replacing 10 per cent of that purchase with biodiesel would use up more canola than Manitoba grows.

Plus, there’s great demand outside the province. Europe has started calling Manitoba, looking to buy biofuel.

“We could end up shipping product there by tanker. The European market is just starving for biodiesel,” Lee said.

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