Ethanol plant looks to grow

A Red Deer ethanol plant has boosted production and is exploring new market opportunities, thanks in part to federal funding.

Red Deer MP Earl Dreeshen listens as Permolex general manager Randy Cook explains the process at the Red Deer grain processing facility on Wednesday.

A Red Deer ethanol plant has boosted production and is exploring new market opportunities, thanks in part to federal funding.

Red Deer MP Earl Dreeshen announced on Wednesday that Permolex Ltd. will receive up to $23.2 million through Canada’s ecoEnergy for Biofuels program.

The grain fractionation plant in Edgar Industrial Park is among 22 companies approved to receive money under the $1.5-billion program, which is designed to boost domestic production of renewable fuels.

“In this difficult economic time, this is exactly what we need,” said Dreeshen, explaining that the money should create local jobs and business opportunities.

Farmers will benefit from Permolex’s increased demand for feedstock, he said, adding that support of the renewable fuel industry also helps the environment.

Grain-based ethanol generates up to 40 per cent fewer greenhouse gas emissions than gasoline on a life-cycle basis, said Dreeshen, noting that the federal government has mandated a five per cent renewable fuel blend in gasoline by 2010.

“The five per cent regulation for gasoline alone can reduce Canada’s greenhouse gas emissions by as much as four million tonnes a year — one million cars off the road.”

Randy Cook, general manager at the Permolex plant, said the money will support a number of initiatives, some of which have already been undertaken.

The facility has already been modified to increase ethanol output to 40 million litres from 25 million litres a year, he said. Improved efficiencies are being sought for the production of ethanol, as well as co-products like bread flour, vital wheat gluten and livestock feed.

One possibility is a “cold-cooked process” that would reduce energy needs, said Cook.

Research is being conducted into the potential of alternate feedstocks like barley, rye, triticale and cellulosic materials, he added. Other areas of interest include increased water recycling, CO2 capture and ethanol recovery.

Cook said Permolex has employed 40 to 50 people over the last two years, and is exploring opportunities for further expansion. Mandated ethanol requirements in Alberta and British Columbia bode well for the future of the plant, he added.

Cook estimated that 700 million to 800 million litres of ethanol will be needed in the two provinces annually to satisfy a five per cent blend in gasoline.

Money under the ecoEnergy for Biofuels program is being paid on a quarterly basis over a nine-year period. It will take the form of a per-litre subsidy of up to 10 cents for ethanol during the first three years, with this rate to decline thereafter.

Permolex Ltd. is owned by Oakville, Ont.-based Permolex International LP. The Red Deer plant has been producing ethanol since 1998, but operated as API Grain Processors before Permolex assumed ownership in 2003.

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