Giant biofuel plant planned; $400M Alberta project
National Post
Wed 18 Apr 2007
Page: FP2
Section: Financial Post
Byline: Geoffrey Scotton
Dateline: CALGARY
Source: CanWest News Service
Edition: National
Story Type: Business
Length: 710 words
CALGARY - A site north of Innisfail, Alta., will be
home to North America's largest biofuels refinery
starting this summer when construction begins on a
$400-million plant that will produce 300 million U.S.
gallons per year of ethanol, biodiesel and crushed
canola.
Dominion Energy Services, LLC along with New
York-based private-equity affiliates Riverstone
Holdings LLC and The Carlyle Group yesterday
formally announced plans for a 160-hectare site
outside of Innisfail for the project.
"The rail infrastructure is massive; that's why we
needed so much land," said Curtis Chandler,
Dominion president and chief executive.
"We have to be able to take unit car trains in, which
are 111 cars, to cut down on our transportation costs."
The project has been under review by Alberta
Environment since March and approval is expected in
May,Mr. Chandler said.
"We're deeply into the permitting stage. We've had
our permits for a month and a half and we're
expecting [environmental] approval in May," Mr.
Chandler said. "I'm very excited. It will be the largest
facility in North America."
Dominion is a Florida-based firm with links to
Calgary's natural- gas industry -- Mr. Chandler and
his father, Bruce, built the Alberta Hub natural-gas
storage facility near Edson -- and alternative- energy
investments in Central Canada.
Riverstone-Carlyle is one of the largest U.S.
private-equity firms with US$56.1-billion under
management. In March, 2006, it purchased the
natural-gas storage assets of Calgary-based EnCana
Corp. in a US$1.5-billion deal.
"The rail access, close proximity to large quantities of
feedstock and skilled local workforce made Innisfail
an ideal location for our newest venture with
Dominion Energy," said Stephen Schaefer,
Riverstone's managing director.
"Biofuels are taking an increasing role in helping
North America reduce our dependence on fossil and
foreign fuels," Mr. Schaefer added.
Ken Graham, Innisfail's Mayor, said on Monday the
project will give a major boost to his town, 116
kilometres north of Calgary on Highway 2.
The plant is expected to create 400 construction jobs
over the 12- to 16-month planned construction period
and 90 full-time positions once the plant is fully
operational by mid- to late-2008. About 200 indirect
jobs will service the plant and its employees.
"There's going to be a lot of spinoffs, jobs, shopping
in town. It will be good for the community," Mr.
Graham said on Monday.
"It's going to be a big, big project and I suspect there
are going to be spinoff industries locating around it.
It's going to be great for the farmers as well," he
added, noting the facility will use wheat and canola
as feedstocks.
When completed, the plant will be among the largest
employers in the Innisfail area, joining the ranks of
facilities owned and operated by companies such as
insulation maker Johns Manville Canada Inc., pet
products manufacturer Nestle Purina Canada Pet
Care Canada Inc. and oilfield-machinery maker NWP
Industries Inc. (Northwest Pipe and Supply Co.).
The facility will include a 100 million-U.S.-gallon- or
374-million- litre-a-year ethanol plant, a similar-sized
canola crush operation and a
374-million-litre-peryear biodiesel refinery. It will
also produce animal feed, canola meal and is
designed to capture its carbon dioxide emissions for
use for injection to enhance oil and gas recovery.
Dominion and Riverstone/Carlyle are taking
advantage of growing public interest in alternative
fuels and expanding government financial and
regulatory support for the production and
consumption of ethanol and biodiesel.
In March, Ottawa announced a $2-billion package of
support for ethanol and biodiesel projects and
technology, while Alberta has launched a
$239-million bioenergy program. The Innisfail
facility will receive a 14ยข-a-litre subsidy through an
Alberta producer credit program.
Other firms have plants in the works as well,
including CR Fuels Inc., which plans a $275-million
biofuel complex near Strathmore, and Canadian
Bioenergy Corp., which plans to turn out 114 million
litres of biodiesel from its $65-million Fort
Saskatchewanarea plant by next year. Biostreet
Canada Inc. hopes to turn out 175 million litres a year
from a central Alberta location.
Currently, Permolex Ltd. operates a 12
million-litre-a-year ethanol plant in Red Deer, Alta.,
and Husky Energy Inc. of Calgary has built a
$110-million, 130-million litre-a-year ethanol plant
in Lloydminster, Sask.
Last December, Ottawa mandated a 5%
renewable-fuel content for transportation fuels by
2010 and a 2% content mandate for diesel and
heating oil by 2012.


-- 
Darryl McMahon
It's your planet.  If you won't look after it, who will?

The Emperor's New Hydrogen Economy (now in print and eBook)
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