The Ottawa Citizen
November 25, 1997
Deal includes building test plant in Ottawa
Environment groups reacted ecstatically to yesterday’s announcement that Petro-Canada will get into the ethanol fuel research business and hopes to start major ethanol production.
“It spells the beginning of a new energy industry. Petro-Can has made a wise investment,” declared Louise Comeau of the Sierra Club, which campaigns against fuels that create “greenhouse” gases, which cause global warming.
“I hope they make lots of money, and I hope Iogen makes lots of money,” she said.
Iogen is an Ottawa biotech company that makes enzymes that chew up wood waste and the unused part of farm crops to make sugar, which is then refined into ethanol.
Yesterday, Petro-Canada announced it would throw its money and refining experience into teaming up with Iogen.
The complex deal includes building a $15-million to $30-million ethanol test plant at Iogen’s Hunt Club Road site next year, co-funding for research and development, future equity positions and a licensing option for Petro-Canada to build a full-scale ethanol refineries.
Both companies say the high-tech process — which will use bioengineered enzymes to convert low-cost cellulose into ethanol — could give them a commanding lead in the race to replace fossil fuels in Canada’s transportation sector.
Currently, North American car engines can only burn a mix that’s 90-per-cent gasoline and 10-per-cent alcohol. But next year, Chrysler Corp. plans to introduce a minivan that can burn a 50-50 mix. And car engines can be designed to run on pure alcohol.
Smaller retailers, including the MacEwen Petroleum chain in Eastern Ontario, already sell ethanol-blend gasoline. Their ethanol is refined from corn.
“This (ethanol fuel) is not new,” Ms. Comeau said. “What’s new in Canada is we’ve gone the corn-and-wheat route (to make ethanol).” She likes the idea of converting waste from forestry or farming to fuel.
“It’s very exciting,” said Tom Adams, an energy analyst with Energy Probe, a group in Toronto that supports alternative energy sources.
“I’ve been part of the fan club of this cellulose-based ethanol for a long time,” he said. “The trick is in the conversion process” from waste to sugar.
One advantage of this system is it uses a group of plants that includes both corn, which is widely grown in Ontario, and wild grasses that don’t need intense farming methods, he said.
If the enzymes can do their work efficiently, the cost will easily be competitive with regular gasoline, he said.
“We haven’t had a lot of good news stories on climate change in Canada. This is one,” said Robert Hornung of the Pembina Institute, another group that focuses on the global warming issue.
“Even major oil companies can see the economic advantage in greenhouse-gas emission reductions,” he said. “It won’t be the solution, but it definitely will contribute, along with a lot of other things such as increased fuel efficiency.”
The Canadian Petroleum Products Institute and the Canadian Association of Petroleum Producers couldn’t reach any of their officials for comment.