Evidence of meeting #16 for Agriculture and Agri-Food in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was biodiesel.
A recording is available from Parliament.
4:15 p.m.
Liberal
Paul Steckle Liberal Huron—Bruce, ON
If switchgrass were to become a cellulosic product used in the creation of ethanol, is it harvested at a time when it would give Ducks Unlimited greater exposure to those ducks breeding, hatching, and removing themselves from that—
4:15 p.m.
Regional Agrologist, Ducks Unlimited Canada
It is my understanding, from talking to the folks from Iogen, that yes, the harvest is after the nesting, so it's September or October, when the ducks are well finished nesting in the grass.
4:15 p.m.
Conservative
4:15 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Thank you for your testimony, Mr. Legault and Mr. Bisaillon. I also want to thank you for coming here today.
In your remarks, you raised questions about the United States. I will come back to that if I have time, but I want to begin with a few questions about the Varennes ethanol plant. The producers are partners in that plant and it is already operating. I would like you to give me a few details, if you have them, of course.
First of all, how are things going right now? Is the plant fully operational? Have producers benefited since the plant opened? Have they profited financially? Has the existence of the plant changed production? Has it been profitable only for a certain sector? I would like to have details on how things are going in that plant, which is Quebec's only ethanol plant.
4:20 p.m.
Director General, Fédération des producteurs de cultures commerciales du Québec
I will give a general answer and let Mr. Bisaillon give the details, since he is familiar with the financial aspect and the spinoffs.
As a general remark, therefore, the 300,000 tonnes of corn for this new market has had quite a spectacular effect on prices in Quebec. Of course, the price floor in Quebec must be increased. The difference is huge, especially since the hog sector seems to be very hard hit in the market right now. If there is a decline in hog numbers, which would mean a reduction in demand from the livestock sector, the plant will have been built just in time, and it is already having an impact on local grain prices in Quebec.
4:20 p.m.
Second Vice-President, Fédération des producteurs de cultures commerciales du Québec
The price was set in cooperation with Quebec producers. I do not have all the mechanics of that process here with me, but it is done on a quarterly basis. An average price is set, and it is the plant's current average price that dictates the local price for all grains. For Quebec producers, the Varennes ethanol plant is definitely advantageous.
4:20 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Can most corn producers in Quebec send corn to this plant right now?
4:20 p.m.
Second Vice-President, Fédération des producteurs de cultures commerciales du Québec
Two-thirds of the supply comes from members of Pro-Ethanol, which represents approximately 500 producers, I think. The final third is supplied by other producers, who may be members of Pro-Ethanol or not.
4:20 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
So there is no corn coming at this point from the United States to the plant. All the corn comes from Quebec producers.
4:20 p.m.
Second Vice-President, Fédération des producteurs de cultures commerciales du Québec
I do not know the details with respect to liquor producers or Ethanol Greenfield Ethanol, but it would not make sense to import American grain. I know for sure that two-thirds of the supply comes from Quebec producers, but the final third is bought on the free market and, to my knowledge, it comes from Quebec producers.
4:20 p.m.
Professor, Department of Chemical Engineering, University of Sherbrooke
That is my understanding as well. I know the plant very well and it is producing 120 million litres of ethanol right now. It has the capacity to produce up to 140 million litres, using grain produced in Quebec. As far as I know, no corn is imported. The plant is fully operational. It is a great technological success, and farmers recover all the protein, which Greenfield Ethanol provides to them as part of the financial agreement between the producers and the company.
4:20 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Mr. Chornet, you are at the Université of Sherbrooke, which I believe is a partner in two cellulosic ethanol plants in the Eastern Townships. I would like you to give us some details about the technology. In fact, I would like to know whether it is as advanced right now for cellulosic ethanol as it is for corn ethanol. I think that is not the case, but I would like to know what the difference is in term of years. Will it soon be possible to produce cellulosic ethanol as easily as corn ethanol?
4:20 p.m.
Professor, Department of Chemical Engineering, University of Sherbrooke
Today, the grain ethanol industry is an industry without risk. There is corn. We know exactly what to do in order to make sugar, to ferment it and to get proteins. This industry has allowed the ethanol sector to develop in North America.
In Quebec, for various reasons, we decided to try and show that we could use two other means of making ethanol, as well as making the corn ethanol. I am involved, both as an academic but also outside of the university, in both of the projects you have mentioned.
One of these technologies uses essentially used wood, such as wood from demolitions or construction, or even wood from the forest. We process this wood and make it into gas which we then make into ethanol using what are called catalytic techniques. This technology, as I was explaining earlier on, already exists in South Africa, and is coal-based. No company in the world is doing this with wood. We have a project in Westbury, in the Eastern Townships, that will prove that it is possible to do so with wood residue.
The plant is already partly built. The equipment has been ordered, and we should begin production this summer. There are risks. It is not without risk as in the case of corn, but it is a very low risk for a certain number of stages that are happening elsewhere, and that will prove the feasibility of success with our raw material in the Eastern Townships.
There is another project under way using better quality waste biomass. We would be making both ethanol and paper fibre. It is a project intended to give paper mills the opportunity to broaden their horizons at an historic moment when the pulp and paper industry is suffering.
4:25 p.m.
Professor, Department of Chemical Engineering, University of Sherbrooke
We are also—
4:25 p.m.
Conservative
4:25 p.m.
Conservative
Carol Skelton Conservative Saskatoon—Rosetown—Biggar, SK
Mr. Thomson, a couple of times in your presentation you stated that timing is critical.
Do each of the other gentlemen around the table feel that it is critical too? Can you explain that a bit further? You mentioned that you were emphasizing it, and I'd like to hear why.
4:25 p.m.
President, Canadian Bioenergy Corporation
Thank you. That's a good question.
If we were to have a renewable fuel standard by 2010 in terms of much of the production capacity to meet the demand coming from that renewal fuel standard, if it is to be produced in Canada and not imported from the United States or abroad, we are right in that window where plants need to move on the plans that they have, to put the down payments on technology to finish off their first phase of construction. I know that intimately, being familiar with a number of large-scale plants' plans. You can build a plant in 18 months, but you cannot build a plant in six.
So if we don't get that signal, I think the capital markets will take that as an indication that the federal government is not clear on its policy support, and money will flow into other jurisdictions. It's fairly straightforward.
4:25 p.m.
Conservative
Carol Skelton Conservative Saskatoon—Rosetown—Biggar, SK
I would like the comments of the other gentlemen too.
4:25 p.m.
Professor, Department of Chemical Engineering, University of Sherbrooke
I think the answer has been provided by my colleague. It is critical to give the right signal to the financial markets that we mean what we say and that there would be an industry developing in Canada. The timing is now. If we begin waiting, others will do it for us.
4:25 p.m.
Conservative
4:25 p.m.
Director General, Fédération des producteurs de cultures commerciales du Québec
We see the difficulty in the same way as Mr. Thomson. The urgency can be explained in this way. We already have projects in Quebec—we hear a lot about them—aimed at expanding an existing plant. The problems may be different in the rest of Canada, but in Quebec, it is a problem of public perception to do with using grain for the production of biofuels. I do not know if you follow the news in Quebec, but if we did not have that perception, we would already be producing something like 250 million tonnes of ethanol now. This is why time is of the essence. The more we wait, the more this perception will shift the wrong way, if I can put it that way.
4:30 p.m.
Regional Agrologist, Ducks Unlimited Canada
I guess from a habitat perspective there are probably two things to bring up. One is that it's important to act now to protect habitats so that expanding the ethanol industry doesn't come at the expense of remnant wetlands and habitat.
On the feedstock side, early ethanol plants on the Canadian Prairies did use winter wheat as a preferred feedstock. More recently, spring wheat varieties have come along that have gained favour because farmers were more comfortable growing them, and winter wheat has kind of fallen by the wayside. So I think the time to act is now, as the industry is growing, rather than waiting until the industry has matured and then having to stop.
