Natural Resources Committee on April 20th, 2010

[Catherine Cobden]

We are at the final stages of pilot demonstrations. So we're much past R and D and much closer to first commercialization. One of the results of our study is that the forest industry is looking very seriously at full-scale pilot demonstration projects to take the technology to the next step. It's in that vein that we need some assistance.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Is there a government program to help with that pilot project?

[Catherine Cobden]

The ecoENERGY biofuels program would have been the project, and that has probably already been allocated for it. The question then becomes what will the next opportunity look like.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Very good.

[Jeff Passmore]

It's also important to distinguish between hardwoods and softwoods. Some technologies are better used with hardwoods and are closer to the commercialization end of the spectrum. Others are better directed toward softwood, such as the pine beetle infestation in British Columbia. The University of British Columbia is working hard at the research and development stage to figure out a solution to that problem.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Okay.

[Catherine Cobden]

There are many different ways you can get to this endpoint. In our study of 27 technologies, we looked at five technologies that can get you to ethanol. We looked at three or four technologies that can get you to biodiesel. So it is fair to say that there is a continuum within that.

We were excited to learn that some of these are fairly close to commercialization.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

I have a quick question on ethanol use in fuel. It's my understanding that a litre of pure gasoline has more mileage than gasoline plus some ethanol. Is there a difference in how far a car can go with that blend?

[Jeff Passmore]

Ethanol is 35% oxygen, and there's no oxygen in gasoline. As a result, ethanol has a lower BTU content than gasoline. But in a 5% or 10% blend, there is no mileage difference or mileage penalty. You would notice more of a mileage penalty if you had improper tire pressure in your tires on the car.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

On octane equivalents, is there anything being done in that regard? Is there a problem with the NOx, and that sort of thing?

[Jeff Passmore]

Pure ethanol has an octane of about 113. As you know, regular gasoline has an octane of 87, so it's a high-octane fuel. Race car drivers love using it. If you were talking about a flex-fuel vehicle where you could change the compression ratio and run on 85% ethanol, you could take advantage of that additional octane.

I should point out that I drove here in a flex-fuel vehicle today fuelled by 85% cellulosic ethanol. I've been driving on E85 since 2004.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

What is the price differential between what you drove here on and what we would get at the pumps?

[Jeff Passmore]

In an E5 or E10 blend, there's no price differential. Ethanol right now is selling at a lower price than gasoline.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Very good.

Is any butanol research being done in Canada for the purpose of fuel?

[Jeff Passmore]

I'm not aware of any.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Okay.

Can the industry distinguish between biodiesel and ethanol? We need to understand the challenges between--

[Jeff Passmore]

Ethanol is added to gasoline and biodiesel is added to diesel fuel.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

So on the research and where we are, we have enough to provide for the demands of those sectors in terms of the blends that are required.

[Jeff Passmore]

Right. We've spent a lot of time talking about the 5% by September of this year, but there will be a 2% biodiesel mandate brought in some time prior to 2011. I believe your next panel has some speakers who know more about biodiesel and can answer your questions more fully.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

What about the difference in costs associated with producing cellulosic ethanol and other kinds of ethanol? Is it far more expensive one way or the other?

[Jeff Passmore]

We have the opposite problem--and when I say “we”, recognize that I also work for a company that's in the cellulosic ethanol business. Generically speaking, cellulosic ethanol has a higher capital cost but a lower operating cost. Grain ethanol is the reverse. It has low capital costs for building the plants and a higher operating cost because you're using a non-agricultural residue as your feed stock.

Getting over the high capital cost is certainly a hurdle to having the first few plants built. Once the product comes off the line--the ethanol molecule--we'll have to be competitive with current ethanol pricing.

[Catherine Cobden]

I want to also point out that on the cellulosic ethanol side, not all technologies are created equal. We did see a significant economic disparity between the five different types of production processes we looked at. It's very important to keep in mind that it really does matter which specifics you're talking about.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Okay.

First-generation biodiesel uses feedstock such as soybean, palm, and canola. Second-generation uses non-food biofeedstock such as jatropha. Third-generation uses feedstock such as algae.

When will we see third-generation biofuels being produced commercially?

[The Chair, Conservative, Leon Benoit]

A very brief answer, please--if you have one.

[Jeff Passmore]

You'll see that probably after you see cellulosic ethanol being produced commercially.