Farmer investment sought for Innisfail ethanol plant

The company behind a multimillion-dollar ethanol plant proposed for near Innisfail is inviting farmers to invest in the project.

The company behind a multimillion-dollar ethanol plant proposed for near Innisfail is inviting farmers to invest in the project.

Dominion Energy Services LLC plans to hold a dozen townhall meetings in rural communities next week, at which time it will provide details about Alberta Ethanol and Biodiesel LP and how producers can buy an equity interest therein.

Alberta Ethanol and Biodiesel is the entity through which Dominion plans to develop a $190-million wheat ethanol and vital wheat gluten production facility.

It announced the project in late 2006, with a site north of Innisfail identified as the location several months later. At that time, the proposal was for a $400-million biofuel plant that could produce nearly 380 million litres of wheat ethanol per year and a similar quantity of biodiesel from canola.

The latest plans are for a facility with an annual capacity of approximately 140 million litres of ethanol, 40,000 tonnes of vital wheat gluten, 145,000 tonnes of distillers dried grains and solubles, and 100,000 tonnes of marketable carbon dioxide.

Dominion CEO Curtis Chandler said $33 million worth of equity in the project is being made available to farmers at a cost of 90 cents per partnership unit. This is a 10 per cent discount from the non-farmer price of $1.

The offer is open to “qualified farmers,” including livestock producers, with a minimum investment of $5,000 required.

“There are a couple farmer-participation plants in Ontario that work very, very well,” said Chandler, adding that his company always planned to seek farmer investors once the project progressed far enough.

“I think it makes it a stronger plant.”

Other sources of equity will also be pursued, he added, and Dominion is awaiting word from the Canadian government on its application for a production credit under the federal ecoEnergy for Biofuels program.

“I’m optimistic, and expecting to receive approval in September.”

Chandler hopes work on the plant will begin this fall, with construction timelines estimated at about 18 months.

He cited a number of reasons why he believes the Alberta Ethanol and Biodiesel project will succeed. Key among these is a pending provincial mandate that will require gasoline to contain at least five per cent renewable alcohol.

“Alberta, even with our plant, is short ethanol.”

Alberta Ethanol and Biodiesel could serve the needs of refineries in the Edmonton area, he said.

Chandler is also optimistic about the market for vital wheat gluten. It can be sold for human consumption in a variety of products, as well as for use in pet foods, as a natural fertilizer and even as a weed control agent.

“With traditional chemical fertilizers and weed control products being banned across North America, the natural fertilizer market offers tremendous growth opportunities for (Alberta Ethanol and Biodiesel).”

Chandler said the decision to modify plans for the Innisfail plant to include vital wheat gluten as a separate product was made about a year ago.

“Vital wheat gluten is a very expensive co-product. Why send that out in animal feed?”

The Alberta Ethanol and Biodiesel plant would still produce livestock feed in the form of distillers dried grains and solubles, and the CO2 it generates could be used for enhanced oil recovery, said Chandler. Both of these byproducts should find a ready market in Alberta.

“Right not, they’re railing in corn distillers from the Midwest.”

Other advantages of locating in this province include the low cost of the natural gas needed to operate the plant, abundant wheat supplies and government incentives for biofuel producers, he said.

“Alberta’s the best place in the world to build a plant.”

A canola crush facility and biodiesel plant remain possibilities for the future, said Chandler, as does an expansion of the ethanol plant.

“We can kind of look at this as being Phase 1 of the project.”

Dominion will hold townhall meetings on Tuesday at the Olds Ramada at 3 p.m. and the Innisfail Legion at 7 p.m. Others are planned for Leduc, Camrose, Drumheller, Strathmore, Fort Saskatchewan, Vegreville, Lloydminster, Brooks, Taber and Lethbridge.

Additional information about these meetings and Alberta Ethanol and Biodiesel LP can be found online at www.AlbertaEthanolLP.com.

hrichards@bprda.wpengine.com

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