Thank you, Mr. Chairman and members of the committee, for giving us the opportunity to appear before you this morning.
I'm pleased to be joined by Tim Haig, the chief executive officer of Biox Corporation, Canada's largest biodiesel producer. Mr. Haig also serves as the Canadian Renewable Fuels Association chair. I am also joined by Bliss Baker, vice-president of corporate affairs for GreenField Ethanol, Canada's largest ethanol producer.
As president of the Canadian Renewable Fuels Association, it is a great pleasure to come to speak with you about Bill C-33, legislation that will help diversify Canada's fuel supply, reduce greenhouse gas emissions, and revitalize rural economies. Coupled with the $1.5 billion ecoENERGY for Biofuels initiative and the $500 million NextGen Biofuels Fund, Canada is about to emerge as a major biofuels producer. In short, this new legislation will allow Canada to grow beyond oil, with a vibrant, new, homegrown ethanol and biodiesel industry.
Energy and the environment are the defining issues of our time. Together they are driving massive change in consumer behaviour, commercial expansion, and public policy. At the same time, the emergence of the bio-economy is no longer pure speculation; it's a reality.
For renewable fuels--biodiesel and ethanol in particular--all this adds up to increased demand, greater opportunity, and steady expansion. Let's be clear that biofuels is no fad or passing fancy. It is certainly an industry that is here today--and it is the future.
Biofuels is also the biggest change to take hold of agriculture in at least a generation, and over the next generation it will also emerge as the biggest change to take hold in our energy sector. In fact, I think it is becoming more and more clear that the bio-revolution taking place today will prove to be every bit as fundamental and far-reaching as the information revolution that began in the 1980s.
The opportunity, therefore, is to gain entry to this sector now, as the benefits of its upside potential are just beginning to take full shape. Ethanol and biodiesel stand at the meeting place between the two most powerful trends that play in our world today. I am speaking of the permanent rise in expensive oil and the global effort to combat the effects of climate change. These two trends not only define the here and now, they are set to shape the way of the world for the next two decades at least, resulting in far-reaching changes to energy use, industrial growth, and consumer activity.
As we speak, oil has already broken $100 per barrel once and will do so again. Oil companies are recording the largest corporate profits of any industry in history. This reality is unshakable and unchallenged. Cheap oil is gone for good. Contrast that fact with another recent report from the International Energy Agency that tells us global energy demands are set to rise by at least 50% by 2030. All of this is on top of the fact that there is limited and very expensive remaining oil coming from ever-increasing, non-democratic, and unstable regions of the globe. Dr. Kent Moors, executive managing partner of Risk Management Associates, International, a leading expert in world energy, estimates that there are about three decades left of a sustainable, conventional, crude oil-based market system. Oil will be prohibitively expensive in the future.
The ranks of the emerging middle class in China, India, and Brazil, combined with the stark failure to discipline consumption in developed nations like our own, render the challenge clear. An expensive gap exists between what we need and what we have, between demand and supply. It is within that gap that ethanol and biodiesel and next-generation renewable fuels find their place. In a future where demand will exceed supply, biofuels are both necessary and financially viable.
Here in Canada we have come to realize that the time for action is now. As you know, Bill C-33 will make the necessary changes in law to ensure that the federal government meets its goal of an average renewable content of 5% ethanol and 2% biodiesel in Canada's gasoline and diesel pools. These regulations guarantee a future market of three billion litres of biofuels in Canada.
The reality is that energy policy is going to increase the emphasis placed on ethanol, cellulosic ethanol, biodiesel, and future generations of biofuels here in Canada and in the United States. It is important to note that car makers are also taking up the challenge. All major car companies already warranty up to E10, or 10% ethanol. There are already six million cars and trucks in North America that can use E85, or up to 85% ethanol. Last week General Motors announced another major boost for ethanol, with a new plan to make half of their new vehicles 85% by 2012. That is just four years away.
Biodiesel in Canada is equally promising. This winter over 60 trucks are being put to the ultimate cold weather test by Climate Change Central, an Alberta government public-private non-profit organization in which the Canadian Renewable Fuels Association is involved, focusing on greenhouse gas reductions and new environmental technologies. The demonstration, which is taking place in the Alberta winter cold, is providing hands-on cold weather experience for fuel blenders, distributors, long-haul trucking fleets, and drivers. Most manufacturers already warranty up to B20, or 20% biodiesel.
Of course, these developments are not driven only by peak oil but also by concerns related to security of supply. In the United States, the President never fails to give a speech on energy that doesn't highlight the fact that 60% of U.S. oil comes from foreign sources, including over three million barrels per day from Saudi Arabia and Venezuela. Even Canada, an oil-exporting nation, imports about half of the crude oil we use for transportation.
The second defining trend of our time is climate change, a challenge that also highlights the valuable benefits of biofuels. Crude oil is not only expensive and in increasingly short supply; it is a major source of greenhouse gases. By way of contrast, biodiesel and ethanol are truly clean sources of energy that avoid the release of carbon and other pollutants.
As governments struggle with measures to lower our collective addiction to carbon, there are few better or more practical options than the adoption of biofuels. According to Natural Resources Canada, in addition to other sources in government and academia, corn-based ethanol could reduce per-litre GHGs by as much as 40% to 60%. Biodiesel GHG emission reductions are 70% to 95%, depending on the feed stock.
We are a clean way to power your automobiles, trucks, tractors, heavy equipment, and marine vessels. Your automobile specifically is a critical battleground in the fight to combat climate change. Adherence to a 5% renewable fuel standard for ethanol and a 2% renewable fuel standard for biodiesel amounts to the equivalent of 4.2 megatonnes of GHG reduction, or the removal of one million cars from our national highways each and every year.
Of critical importance to you as members of the Standing Committee on Agriculture and Agri-Food, biofuels will revitalize farms and rural communities across the country, from those of wheat and canola farmers in the west to those of corn and soya farmers in the east. New world-class biofuel facilities will be built, generating over $1.5 billion in new investment and resulting in 14,000 construction and related jobs in rural communities across this country. Once built, this industry will generate 10,000 direct and indirect jobs and generate $600 million in annual economic activity in Canada.
Bill C-33 will provide a new market for over 200 million bushels of Canadian grains and oilseeds. Put in a global perspective, Bill C-33 will position Canada in a global transition to biofuels that includes our major competitors in the United States, Brazil, and the European Union. Bill C-33 will help us compete on a level playing field and ensure we enjoy the strong economic benefits of this new area of dramatic growth.
Members of the committee, the work you are undertaking is very timely. Biofuels enjoy broad multi-party support, and it is our hope that legislators in the House of Commons and the Senate will move swiftly to pass Bill C-33. Let me emphasize, quick passage will ensure the continued growth of a domestic industry and allow for the introduction of biofuels into the Canadian fuel supply in a timely manner.
Thank you for your time and your efforts. Thank you for creating the conditions to allow us to grow beyond oil, to reduce greenhouse gases, and to revitalize rural economies across Canada.