Thanks very much to the committee for the invitation to speak to you today.
For the past 20 years, REAP Canada has been Canada’s leading agency in developing ecoENERGY from agriculture. We commend the federal Government of Canada in its recognition of the need to support bioenergy initiatives from the farm sector. Support for the Government of Canada's ecoENERGY initiatives can help strengthen Canada's prosperity in two ways. It creates demand enhancement for farm products, thereby strengthening commodity prices for the farm sector, and it enables Canada to become a leader both in the development of crops that efficiently harness the sun and in processing technologies that turn plant matter into useful energy forms for consumers.
Our agency supports the general concepts of existing ecoENERGY programs: support for producers for business plans, support for capital building offsets, and support for fuel producer incentives. However, before our agency makes specific recommendations to the committee, let me take the opportunity to better explain our approach and history with developing renewable energy from agriculture.
In 1991, REAP Canada gave a brief to the House of Commons Standing Committee on Agriculture about the state of the crisis at that time. We proposed that the best solution to the farm crisis was to recognize that the farming sector has a surplus production capacity and countries need to use this surplus agricultural production capacity to efficiently develop environmentally friendly renewable energy. Twenty years later, Canada has only been partially successful in developing this potential. We have been successful in strengthening farm commodity prices by using grains and oilseeds as feedstocks as liquid biofuels for the transport sector. However, the food commodity crisis that occurred in 2008 makes us realize that creating too much food crop demand through biofuel use can be too much of a good thing.
Canadians must now collectively acknowledge that the rapid scale-up of food crops into renewable fuels can also bring appreciable social dis-benefits to others. Make no mistake, the commodity crisis was largely driven by the rapid expansion of coarse grain utilization in 2008. In retrospect, renewable energy policy that creates liquid biofuels from food commodities has been a breakthrough in creating demand enhancement for Canada’s farm sector. Using food commodities for renewable energy, however, can bring appreciable harm to the one billion people on this planet who remain hungry. While it remains the Government of Canada's aim to develop non-food crops as liquid biofuels, this remains technologically and financially elusive, despite noteworthy efforts by Canadian companies over the past 35 years.
Where the Government of Canada has failed over the past two decades is not recognizing that in order to create appreciable amounts of renewable energy from agriculture, one needs to view first and foremost the land as a means to capture and store solar energy. This stored energy must be harvested and efficiently converted into an energy form that we can use, such as solid biofuels, biogas, and liquid biofuels.
Let's briefly look at the state of the solar battery technology on farms. From a solar energy collection standpoint, it is remarkably inefficient to use only the seed portion of plants to capture the sun's energy. Instead, energy crops like switchgrass, where the whole plant is used, should be prioritized. REAP Canada’s recent book chapter on developing energy crops for thermal applications, published in 2008, found in the case of the province of Ontario that switchgrass can produce 67% more net energy gain per hectare than grain corn and more than four times the net energy gain per hectare than soybeans or canola.
It does not make sense to put appreciable research support and generous incentives in place to support seed crops as fuels. Canada should be developing ecoENERGY policies that embrace the development of whole plant energy crops and phase out investments that develop grains and oilseeds into biofuels. Seed crops can be used to produce bioproducts, but it is a fully inept renewable energy policy to try to develop these crops as energy sources for the Canadian energy supply.
The Obama administration has fundamentally recognized this need to move beyond grains and oilseeds as energy sources by making important investments in energy crops through the new biomass crop assistance program. This program provides incentives for the farmer by offsetting establishment costs for growing energy crops, as well as providing the bioenergy conversion facility up to $45 per tonne of incentive for utilizing these feedstocks.
I want to stress to this committee that investing in energy crops is the best ecoENERGY policy approach when it comes to using Canada’s agriculture sector for renewable energy production. Energy crops are the solar batteries of agriculture. They provide both large- and small-scale investors the potential to have relatively abundant and affordable energy feedstocks for their energy conversion technology. This approach takes the Government of Canada out of the business of picking technology winners and unleashes the entrepreneurial spirit of Canadian businesses.
Our agency recommends that the new ecoENERGY program provide farmers a $100-per-acre incentive to plant perennial energy crops. This will help them minimize their liquidity constraints in developing energy crops and help mitigate their risks. Furthermore, we recommend that Canada develop its own biomass crop assistance program, which would provide bioenergy conversion facilities a $40-per-tonne incentive to use energy crops and a $20-per-tonne incentive for the sustainable use of crop residues over a three-year period.
Canada can develop an appreciable energy supply from dedicated bioenergy crops. REAP Canada has calculated that using 14% of Canadian farmland for bioenergy crops could produce 55 million tonnes of biomass or the equivalent of 175 million barrels of oil.
Now let's examine what happens to the energy we have collected on farmland after it is processed at a bioenergy conversion facility. What we find is that traditional liquid biofuels, such as corn ethanol and soybeans, produce 16 and 11 gigajoules respectively per hectare of net energy gains. In contrast, whole plant crops like corn silage converted to biograss or switchgrass converted to pellets can produce 120 to 140 gigajoules per hectare of net energy gain.
This again is from the same report I mentioned earlier, our book chapter on thermal energy crops for bioenergy.
It is evident that the greatest amount of renewable energy production can be realized by using bioconversion technologies that use whole plant energy crops such as switchgrass or whole plant corn. The least efficient thing we can do is turn seed crops into liquid biofuels. Clearly, the Canadian government should develop ecoENERGY policies that promote the use of whole plant crops into energy for producing densified solid biofuels or biogas for heat, power, and transport. It is time for the Canadian government to move boldly forward with progressive new policies to use our farms and fields to efficiently harvest the sun.
Thank you very much for your attention this morning.