Mr. Speaker, it is a pleasure to join in the debate on Bill C-235.
Philosophically I do not have a lot of problems with what the bill is proposing. It is fancied up a little in the sense that it proposes oxygenating fuel, which is just another way of saying blending ethanol with gasoline, and for the government to promote or to legislate the mandatory use of ethanol in gasoline. I do not think that is necessarily a bad thing.
What it boils down to is whether the taxpayers and the drivers of automobiles in this country are willing to pay the costs to make that process economically viable. From all indications I have seen, especially over the last year with gasoline prices, the public seems to be extremely sensitive to gasoline prices and I really doubt that they are willing to spend the kind of money to fill the tanks in their cars that would be required to produce a viable ethanol industry.
Quite frankly, the ethanol industry could not survive in Canada without the excise tax subsidy that it enjoys today. Even with that subsidy it is only marginally viable and is very dependent on the cost of the feed stock going into the ethanol plant, whether that be grain, fibre or crop residue of some kind.
Unless the plant can access those feed stocks at an extremely low price, the plant just cannot be economical. Certainly with crop residues on the prairies, we are looking at $70 or $80 a tonne for residue straw from the crop. Iogen Corporation, the pilot project right here in Ottawa that is making ethanol out of grain straw, certainly cannot pay that kind of money and it has been very upfront about that.
The proposal to have governments legislate or mandate whatever that level of ethanol would be is really not possible until there is the amount of ethanol produced in this country to make it possible. That would be a huge amount of ethanol and that will only happen when the economics are right and plants can produce the ethanol and make a dollar at it and I think we are a way from that.
There are other problems with the ethanol industry that bear looking at. The member is quite right in saying that there is some reduction in tailpipe emissions in pollution over pure gasoline to gasoline that is blended with ethanol. At a 10% blend that gain is relatively small. If one looks at the complete cycle in the production of ethanol as well as tailpipe emissions, the gain for the environment is relatively small.
There are some real problems to overcome in the industry before the member's idea could really become a reality. There are certainly other technologies on the way that are equally as attractive as ethanol. Perhaps the economics may turn out to be better as well. In the full life cycle, the amount of energy it takes to produce a litre of ethanol has to be taken into account when looking at the savings for the environment or for human health.
Ethanol is a difficult product to blend with gasoline. Where gasoline generally can be moved all across the country through pipelines at a relatively small cost, that is not the case with ethanol. The alcohol, which ethanol essentially is, has a tendency to separate from the gasoline in the pipeline and does not make transportation by pipeline possible. Therefore it requires that the ethanol be trucked from the point of production to the point of sale. Again, we have to figure in the pollution caused by the trucking of the ethanol versus transporting ethanol by pipeline.
There is another big issue. If governments are going to consider mandating or legislating a minimum amount of ethanol blend in gasoline, governments will have to look at the whole issue of government taxation on gasoline, whether that be blended gasoline or straight fossil fuel gasoline.
Last summer government taxation on gasoline was a big issue across the country. Even some service stations now are advertising their tax exempt price on gasoline and then adding the tax on at the till. People are absolutely shocked to find, depending on where the price of gas is, that almost half the price of a litre of gasoline is tax.
If the government is going to be serious about this issue and promotes the use of ethanol without those dreaded subsidies which the member presenting the bill continuously talks about in the fossil fuel industry, if we are going to produce a viable industry that can stand on its own without subsidization, then we have to look at how that product is taxed at the pump.
That is where we could make the product more attractive. It could be made attractive enough to consumers so that they would be willing to use the blended gasoline rather than straight gasoline. We have not seen any willingness on the part of government to reduce taxes on gasoline. In fact the opposite has probably been true rather than a willingness to reduce taxes.
I receive letters in my office all the time from constituents and people across the country who have discovered that as the cost of gasoline rises, the amount of tax on the gasoline also rises. The GST is based on a percentage and it is added on after the provincial and federal excise taxes. It is a tax on a tax. Most consumers find that very offensive. The government has to do something about that if it is going to be serious about promoting this new kind of fuel.
As I said before, there are other technologies that are as attractive or more attractive than ethanol. Biodiesel and even the diesel technologies that exist in Europe are so far ahead of where we are in North America. There is a huge potential for them as a bridge between gasoline and diesel into the new technologies of hydrogen that are around the corner in this country. We could make huge gains and huge improvements in pollution levels with biodiesel. The technology to capture the particulate exhaust from diesel trucks is there now. We could take huge advantage of that and I think the economics are more realistic.
The other one is hydrogen and the hydrogen fuel cell car. The technology is certainly there. We just have to figure out a way to produce and store the hydrogen and to put it into the tank so that it is safe to transport in a car or truck. That technology is virtually pollution free, producing nothing but pure drinking water out the tailpipe.
The bill has its merits and its idea is laudable, to reduce pollution and improve human health. However, I think there are other technologies that we should look at.