WHEREAS the Alberta Government is committing $239 million over the next five years to strengthen and expand Alberta’s bio-energy sector by encouraging manufacturers to bring more bio-energy products to the market place; andWHEREAS this investment provides a significant opportunity to position Alberta as a leader in producing renewable energy from organic materials and create new markets and new environmentally friendly product and process opportunities for Alberta’s agriculture industry; andWHEREAS the Alberta Bio-Energy Policy Framework’s purpose is to facilitate a supportive investment and market climate enabling the utilization of Alberta’s bio-mass feedstock to produce sustainable bio-energy capitalizing on business and environmental opportunities in a distributed manner; andWHEREAS the petrochemical industry’s interest in bio-fuel projects seems to be focused on large scale projects and responsibility for the Bio-Fuel Strategy has moved to the Department of Energy; andWHEREAS Alberta farmers are innovative and diversified in their operations with high productivity in bio-mass production and have indicated a strong interest towards ownership of bio-fuel manufacturing; andWHEREAS development of bio-energy facilities will complement the Province’s Rural Development Strategy and Agriculture 10-20-10 growth strategy;

THEREFORE BE IT RESOLVED that the AAMDC lobby the Provincial Government to ensure that government monies in both capital and per litre terms be invested in a number of projects in all areas of Alberta to achieve reduced transportation costs to the plants; a broad-based ownership and distribution of plants; building of expertise and supply of bio-fuels and economic development in all agricultural areas of the Province.

Albertas bio-fuel industry is in its start-up stages. The need to build expertise in the production and distribution in the Province is a critical success factor. If bio-fuel production is done in only one world scale plant, the benefits will not accrue to the farmers who produce the feedstock nor rural communities in their economic development/sustainability.The recent Dominion announcement from Red Deer would provide all the bio-fuels required in the province. For the bio-fuel strategy to be successful to improving farm income, rural economic development, environmental benefits and innovation and to benefit farmers and rural communities, 10 or 15 pilot plants need to be set up in all areas of the Province rather than one large facility. If the Province condones only a few large-scale bio-fuel plants in limited locations, it is contrary to its Rural Development Strategy.Alberta Government Bioenergy Program – October 3, 2006$239 million over five years- $209 million over four years for Renewable Energy Producer Credit Program Estimated $0.14/litre on ethanol and biodiesel- $30 million over three years for Commercialization/Market Development and- Infrastructure DevelopmentCanadian Government Biofuels Program – December 20, 2006- Annual average renewable content of 5% in gasoline by 2010- Annual average renewable content of 2% in diesel fuel and heating oil by 2012- $345 million over five years- $200 million over four years for Capital Formation Assistance Program, a program providing repayable capital funding for agricultural producers’- participation in biofuels projects.- $145 million over five years for Agricultural Bioproducts Innovation Program- (ABIP), a program designed to promote research, development, technology- transfer, and commercializaion of agricultural bioproducts, including biofuels.- Federal excise tax credit of $0.10/litre for ethanol and $0.04/litre for biodiesel Ethanol Production- Ethanol Yield (wheat) 1 bu = 2.608 US gal = 9.86 litres1 tonne = 361.53 litres- Ethanol Yield (corn) 1 bu = 2.8 US gal- Energy Balance – energy output:energy input Corn 0.8-1.34:1Sugar beets 1.9:1Sugarcane 8:1- Ethanol Demand 2.2 billion litres in Canada @ 5% mandated inclusion rate (on 44 billion litresof gasoline)230 million litres in Alberta @ 5% mandated inclusion rate480 million litres – estimated potential production in Alberta- Impact on Crops Canada – 2.2 billion litres requires 6.1 million tonnes of wheat and corn6.1 million tonnes = 17% of 2006 wheat and corn productionAlberta 480 million litres requires 1.33 million tonnes of wheat1.33 million tonnes = 15.5% of 2005 wheat crop- Co-Products 33% of inputs returned in co-products (distillers grain)- distillers dried grain (DDG) has roughly the same feed value as barley, as long as there has been no further processing of the co-product- 480 million litres of ethanol production would return 443,333 tonnes of co-products.- At 7 lb/day (about 35% of ration), this would provide feed for just under 400,000 head of cattle or fewer than half of our feeder cattle.- 35% protein in DDG- High nitrogen and phosphorus content in DDG affects manure nutrients- Some problems in handling and storing co-products- Wet distillers grain may have a higher feeding value, but can only be used close to the ethanol plantBiodiesel Production- Biodiesel Yield (canola) 1 bu = 2.315 US gal = 8.75 litres1 tonne = 385.46 litres- Biodiesel Demand 530 million litres in Canada @ 2% mandated inclusion rate on 26.5 billion litres of diesel fuel102 million litres in Alberta @ 2% mandated inclusion rate- Impact on Crops Canada 530 million litres requires 1.4 million tonnes of canola1.4 million tonnes = 14% of 2006 canola production- Co-Products 58% of canola seed is returned as meal10% of canola oil returned as glycerine- Canola meal is 35% protein and often used as a protein source. Unsure of feeding value as an energy source- Unsure of the value of glycerine as animal feed.Riverstone Holdings, The Carlyle Group and Dominion Energy AnnouncementNovember 13, 2006- 300 million US gallons of Bio Refining Capacity in Alberta- 100 million gallon (378 million litre) ethanol facility- 100 million gallon (378 million litre) biodiesel facility- 100 million gallon canola oil crushing facilityo Would supply 17% of Canadian ethanol demand, 164% of Alberta ethanol demand, and 78% of Alberta potential ethanol production.o Would supply 30-78% of Canadian biodiesel demand depending on mandated inclusion rate.o Would require 12% of the 2005 Alberta wheat crop and 27% of the 2005 Alberta canola cropo Could be eligible for $100 million per year in Alberta ethanol and biodiesel producer credits, as well as being eligible for all the money available in the commercialization and infrastructure development program.o The distributors of the ethanol and biodiesel from this operation could receive over $75 million per year in federal tax credits.Biofuel Challenges and Questions- Bio-Butanol A company has developed technology to produce bio-butanol, a product that has a higher energy content and much better handling and blending characteristics than ethanol. There is significant interest from reputable companies in the further development and implementation of this process. If production of bio-butanol derives more energy from the grain inputs, we would expect that the co-product would have lower feeding value than the distillers grain from ethanol production.- Ethanol from Cellulose There is a substantial amount of research and development work being done on the production of ethanol from cellulose and one firm (Iogen Corp) has a demonstration plant in Canada. The feasibility of this process has not been proven, but it would allow the production of ethanol from wood and crop residue. This would reduce the benefits of ethanol production for the grain sector and would create a co-product stream of questionable value for the livestock industry.What are the feed values of wet and dry distillers grains?What effect will feeding these products have on the nutrient content of manure and the subsequent manure management requirements?What are the feeding values of canola meal and glycerine for the cattle industry and what effect will the use of these products have on the nutrient content of manure?What would be the value of the co-products from bio-butanol and ethanol from cellulose for the cattle feeding industry?Ethanol producers are evaluating processes to use the fat from the co-product to producebiodiesel. Ethanol and biodiesel producers are actively engaged in research and development work designed to improve the efficiency of their operations. Clearly, any improvement in the efficiency of ethanol and biodiesel production is likely to reduce the value of the coproducts for feeding livestock.From: Alberta Beef Producers

Resolution 3-05F – Ethanol Industry Strategy (STATUS: ACTIVE) requests that the AAMDC look to the government of Alberta to institute an ethanol industry strategy and to improve the research and development of bio-diesel. The provincial response notes that this move would be in breach of current government policy. The province currently supports ethanol producers by exempting bio-fuels under the Fuel Tax Act. Consumers do not have to pay the nine cents per litre tax on the ethanol portion of blended fuel. In Alberta, the biofuels and ethanol industries will be enhanced through two alternative energy strategies.Federally, the National Biomass Ethanol Program (NBEP) (a $140 million fund) expired on March 31, 2006 due to lack of participation. On May 23, 2006, the federal government announced its goal to work with provinces and territories to have five per cent of the country’s transportation fuels renewable by 2010. The federal government is currently working on their strategy to implement this plan.Resolution 7-05F – Research Funding for Alternative Energy Sources (STATUS: ACTIVE) asks the Government of Alberta to commit to $3 billion dollars in funding over the next 20 years for alternative energy research. Budget 2006 provides $63 million over three years in new funding for alternative energy research.On August 8, 2006 the AAMDC received a letter from the Minister of Innovation and Science highlighting the government’s Alberta Energy Innovation Strategy. The document emphasis the following provincial commitments:- To be able to produce up to 5 per cent of Alberta’s energy demand from bioenergy sources.- To develop a prototype fuel cell that can run directly on hydrocarbon fuels or syngas and can be readily adapted to both residential, small commercial and remote settings for combined heat and power needs.- To develop technologies and protocols that will allow industry to increase Alberta’s energy production from geothermal, solar and wind energy sources up to 12 per cent of total electrical energy demand in the province.