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Posted on  

October 18, 2002

Ethanol plant site unveiled in Sask.

By Karen Briere
Regina bureau

BELLE PLAINE, Sask. The worst kept secret in Saskatchewan was revealed last week: the first of three ethanol plants will be built in a former wheat field midway between Regina and Moose Jaw.

The province, through the Crown Investments Corp., and Denver-based Broe Companies will build the $55 million, 80 million litre facility next to the IMC Kalium mine and across the road from Saskferco's fertilizer plant. It is expected to open early in 2004.

CIC will own 40 percent of PrairieSun Energy Products, and will invest between $14 and $20 million, depending on how much community money is raised. Of that, $5.5 million will be in equity and the rest in debt.

The government and the Colorado company are also working with groups in Melville-Yorkton and Tisdale to develop two other plants.

But even as premier Lorne Calvert declared it a great day for the province, some were wondering if it will really be a boon for rural Saskatchewan.

"There is no guarantee in this deal that the big American companies running the new ethanol plants will use Saskatchewan grain," Liberal leader David Karwacki said.

Broe owns the short-line railway Omnitrax, and Karwacki suggested cheap American corn could be backhauled to the plant.

Dwight Johnson, president of Omnitrax and now president of PrairieSun, said the company does not intend to use imported feedstock.

"I think that's extraordinarily unlikely to ever happen," he said in an interview. "The transportation cost of that grain, moving it out of anywhere in the U.S., would make it far more expensive than the grain that's sitting right outside of our door here."

The plant will use about 217,000 tonnes of spring wheat and durum annually.

Saskatchewan produces about 14 million tonnes of those grains, using the five-year average.

Johnson said feedstock availability and price are the most important components of any ethanol plant.

"There's nowhere better than Saskatchewan for both of those."

Pat Broe, founder and president of Broe Co., said Saskatchewan's move to compulsory ethanol use was also key. Broe does not have any ethanol plants in the U.S.

"In Colorado ... five months out of the year we have a mandatory ethanol additive, but we don't have much corn in Colorado so it's been hard to produce it," he said in an interview.

Broe said he would also consider investing in the feedlot industry the province hopes will grow around these plants.

"I started business in the feedlot business so, you know, I'll take a look at it."

Agriculture minister Clay Serby said the province might also invest in feedlots, noting that public money kick-started Alberta's industry.

"The ethanol plants are important and they will add value to a region ... but really where the maximum jobs are and where the maximum potential in growing the agriculture industry is in the livestock," he said.

Construction at Belle Plaine will create 130 jobs and 35 people will be employed once the plant is operating.

It will produce enough distillers grain to feed 120,000 cattle.



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