Mr. Chairman, members of the committee, thank you for giving me the opportunity to appear before you this morning to share my insights on Bill C-33, an act to amend the Canadian Environmental Protection Act, 1999.
I come to you today as someone with over twenty years' experience in the refining, supply, distribution, and marketing of conventional petroleum products in Canada and as vice-president of Rothsay, a proud member of Maple Leaf Foods and a pioneer in Canada's biodiesel industry. I trust that my practical and commercial experience in both conventional and alternative fuels will be beneficial in today's proceedings.
I would like to impress upon the committee two messages today: first, that alternative fuels like biodiesel hold many benefits for Canada and Canadians; second, and more importantly, that quick passage of Bill C-33 is critical if we are to realize any of these benefits.
Renewable fuels like biodiesel can benefit Canada and Canadians in three ways. First, renewable fuels can address the growing challenge of climate change. Climate change is real, and the environmental consequences of being addicted to carbon-based fuels are a key source of the problem. Renewable fuels like biodiesel can help address these issues by offering substantial environmental benefits over conventional carbon-based fuels. In the case of biodiesel, the environmental benefits are many.
According to Natural Resources Canada, biodiesel greenhouse gas emissions reductions are 70% to 95%, depending on the feedstock. Even a blend of 20% biodiesel with conventional diesel can reduce carbon emissions, on a life-cycle basis, by over 15%. Our Sainte Catharine's plant alone helps eliminate approximately 122,000 metric tonnes of greenhouse gases annually, which is equivalent to taking 16,000 light trucks or 22,000 cars off the road.
Biodiesel is as biodegradable as sugar, and is ten times less toxic than table salt. Biodiesel also has a very positive energy balance. In fact, a new analysis conducted at the University of Idaho in cooperation with the U.S. Department of Agriculture shows that the energy balance of biodiesel is a positive 3.5 to 1, which is to say that for every unit of fossil energy needed to produce the fuel over its life cycle, the return is 3.5 units of energy. This compares very favourably relative to conventional petroleum diesel, which yields less than one.
Second, renewable fuels like biodiesel help address the issue of energy diversity. The $100 per barrel for crude oil is more than enough reason to look at renewable alternatives as a means to diversify our reliance on carbon-based fuels. Not only have crude oil prices climbed but product prices are also at record levels. Over $3 a gallon in the U.S. and $1 per litre in Canada is now commonplace thanks to an aging refining network, minimal spare capacity, and ever-increasing product specifications.
In their most current medium-term oil market report issued in July of 2007, the International Energy Agency, a well-respected source of energy information worldwide, forecasted increasing market tightness beyond 2010 due to OPEC's spare capacity declining to minimal levels by 2012.
In the same report, they indicate that energy demand is not receding any time soon. Expanding economies, particularly those in non-OECD countries--for example, in Asia and the Middle East--are forecast to grow their oil demand by 3.6% per year over the next five years. This is clearly a recipe for continued upward price pressure on both crude oil and petroleum products in the foreseeable future.
Renewable fuels like biodiesel can help diversify our energy supply by adding additional supplies and production capacity for clean, renewable alternatives that are fully compatible with today's engines, can meet the highest product standards, and can be easily integrated into our distribution infrastructure. What's more, these fuels are available now.
The third major benefit of renewable fuels is their positive impact on the Canadian economy. Our Sainte Catharine's facility in Quebec is proof positive of what even a modest investment can mean to local communities.
In terms of employment, we are proud to offer employment opportunities for professionals, skilled and semi-skilled individuals. We have over 25 people directly involved in our biodiesel business. We also spend over $800,000 per year on local services to support our operation and over $15 million will be spent acquiring domestically produced feedstocks.
Our plant contributes to the local tax base supporting municipal, provincial, and federal taxes. In 2007 we also completed a major capital upgrade of the facility and utilized local trades and services during the fabrication, construction, and commissioning phases of this project.
A strong domestic biodiesel industry establishes new markets and price stability for oilseed crops and animal by-products, while diversifying and strengthening rural economies. Clearly these three benefits--the impact on our environment, energy diversity, and the economy--are positive for Canada and Canadians. However, these will not be realized without quick passage of Bill C-33.
Bill C-33 is imperative if Canada is to foster a strong domestic renewable fuels industry and market. Make no mistake, Bill C-33 and a renewable fuel standard will not see appreciable demands in Canada for renewable fuels, which in turn will not contribute to the relatively small investment needed to our supply infrastructure to accommodate these cleaner renewable fuels.
We already see this now, with almost all of our 35 million litres of production from our Sainte Catharine's facility going directly to foreign jurisdictions that have much more developed renewable fuel programs. Today in Canada we have but two commercial-scale biodiesel facilities, while our neighbours in the U.S. have over 130, with another 37 under construction. What's worse is the significant gap that exists for consumers who want to use biodiesel. I'm aware of only two product terminals in Canada that can effectively blend biodiesel, and fewer than a handful of fueling facilities that actually offer biodiesel to consumers.
Quick passage of Bill C-33 will change this by creating the catalyst needed to secure investment in biodiesel plants and the necessary infrastructure to get this clean renewable fuel to consumers. Should Bill C-33 fail to pass, I'm certain that future investment in biofuels will be seriously impaired, if not outright abandoned. This is certainly the case for my organization, which would like to expand our biofuels business but is reluctant to do so, not knowing if a market will even exist in Canada.
In summary, I believe renewable fuels hold great promise and benefits for Canada and Canadians. They address climate change, improve energy diversity, and have an opportunity to add to rural development and Canada's economic growth. Quick passage of Bill C-33 will provide the catalyst needed to spur investment and to help Canada realize the many benefits renewable fuels have to offer.
Thank you for your time and attention.