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Posted on  

May 20, 2003

Ontario: Ethanol Plant Could be Coming

Sources say Suncor could build plant in the city

Suncor Energy is working on plans to build an ethanol plant in Sarnia, sources say.

The company is tight-lipped, but those close to the project cite a successful feasibility study and recent factors that boost its likelihood, including a local land purchase and growing market demand for cleaner fuels under the Kyoto Accord.

Last week, Suncor surprised the community by announcing it has made a conditional purchase offer on a parcel of undeveloped land owned by Dow Chemical.

The 164-acre site is south of Churchill Road between Vidal Street and Tashmoo Avenue, adjacent to the Aamjiwnaang First Nation.

Suncor spokesperson Neil Levine refused to confirm or deny the land is earmarked for an ethanol plant.

"We're conducting a number of feasibility studies and when that's complete we can proceed. But until then we're not going anywhere," Levine said.

"What I can tell you is that we're examining all our options and when we're ready to make a decision, we'll be certain to let you know."

Fuel ethanol is made from grains, especially corn, and added to gasoline to lower greenhouse gas emissions.

Suncor Energy owns a refinery in Sarnia and sells gasoline in Ontario from 300 Sunoco stations. The Canadian-based oil and gas company is also actively involved in the development of renewable energy sources.

Sources say the feasibility study for a pilot or full-scale ethanol plant in Sarnia coincides with a burgeoning demand for fuel ethanol.

Ontario already imports 110 million litres annually, despite being home to the only world-scale ethanol production plant in Canada; Commercial Alcohols Inc. in Chatham-Kent.

And the market is expected to take off as Canada tries to meet its climate obligations under Kyoto. Ottawa has set a target of 35 per cent of Canada's gasoline supply containing a 10 per cent ethanol blend by 2010.

"That will translate into approximately 1.6 billion litres of ethanol in Canada per year," said Brian Doidge, general manager of the Ontario Corn Producers Association.

"And the demand already exceeds our ability to produce.

Doidge, who has heard the rumours about Sarnia, said other ethanol projects are proposed for Cornwall and Brantford, Ont. But the combined production from those two farmer-owned co-operatives would only slightly surpass Chatham's annual output of 150 million litres.

News reports this week suggest Ottawa may spend as much as $575 million of its Kyoto budget to subsidize the production of fuel ethanol.

Cheaper ways to eliminate greenhouse gases exist, including making buildings more energy efficient. But Ottawa likes ethanol because it could be a boon for corn growers and rural economic development.

"There's no doubt that as the public becomes more attuned to air quality issues, the government will attempt to address it through auto emissions," said Sarnia-Lambton MP Roger Gallaway.

The high cost of producing ethanol is already offset by huge government incentives. The federal government provides a tax exemption of 10 cents per litre and Ontario a 14-cent-per-litre tax break.

But costs have fallen as ethanol use grows, said Rose-Marie Ur, MP for Lambton-Kent-Middlesex and a longtime advocate.

"It's good for the environment, it's good for agriculture and it's good for you and I who breathe the air."

Source: The Sarina Observer



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