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**Lude Awakening** · 01-04-2007, 04:50 PM

Total volume over year must contain 5 per cent ethanol

Quote:

January 04, 2007
Tyler Hamilton
Energy Reporter

All gasoline sold in southern Ontario must contain an average blend of 5 per cent ethanol as of Jan. 1, but don't expect every gas station to carry the cleaner-burning fuel.

And for those that do, you won't necessarily know it.

"What's going to be visible depends on the retailers," said Bliss Baker, a vice-president with Toronto-based GreenField Ethanol Inc., the largest ethanol producer in Canada.

Ontario's new biofuel mandate, known as Regulation 535, doesn't require gasoline retailers to advertise that the fuel they sell contains ethanol, typically made from corn.

Suppliers also have the flexibility of choosing where and when ethanol-blended fuel is sold, as long as the total volume sold in Ontario over the year contains an average blend of 5 per cent.

"Given the complexities of introducing ethanol into the market, we found the most efficient way to meet the regulations is to focus on larger urban areas," said Michael Southern, a spokesman for Petro-Canada, the country's third-largest oil company.

Southern said Petro-Canada is targeting the Greater Toronto Area and surrounding communities, such as Hamilton and Kitchener, with ethanol blends of up to 10 per cent.

Stations located in less populated areas will probably not carry the new fuel in the short term.

"But, over the course of 2007, we will meet the 5 per cent average, for sure," said Southern. He added that Petro-Canada does intend to notify customers if the pump they're using contains the renewable fuel.

Loblaw Cos. Ltd. will have a similar disclosure policy at the gas pumps located near some of the company's grocery stores. Spokesman Geoffrey Wilson said the retail giant is at the mercy of the refiners and their ability to supply the fuel.

"Where we can get it, we will pump it," said Wilson, adding that wholesale suppliers have indicated the new blend will be ready for GTA distribution in February.

Ethanol is a type of alcohol made mostly today from grains such as corn and wheat. Enzymes are used to turn the starchy material into glucose, which is then distilled into oxygen-rich ethanol. Newer, more economical methods are also being developed for turning agricultural waste, and so-called fuel crops such as switch grass, into "cellulosic" ethanol.

The high oxygen content in ethanol means that adding it to gasoline helps achieve a more complete burn of a vehicle's fuel, leading to lower emissions.

John Steele, a spokesman for Ontario's environment ministry, said all gas-powered vehicles sold since the early 1980s are capable of using fuel containing up to 10 per cent ethanol, or E10, with no impact on performance. Blends containing a higher concentration of ethanol, such as E85, can be used only in so-called flex-fuel vehicles.

Steele said the new mandate in Ontario, which doesn't apply to northern Ontario until 2010, will require 850 million litres annually to meet market needs.

The Canadian Renewable Fuels Association is expecting about 750 million litres in new production capacity to come online in Ontario toward the end of 2007 and into 2008. Until then, the industry will rely heavily on imports.

"In the first months of 2007, you're going to see a big spike in ethanol imports while additional plants are being built," Kory Teneycke, executive director of the renewable fuels association, said in an interview.

GreenField, formerly Commercial Alcohols, produces 215 million litres a year at Ontario plants in Chatham and Tiverton. Two more plants in the province are under construction in Hensall and Johnstown, while another facility is slated to open in Quebec in February.

Last summer, oil giant Suncor Energy Inc. opened a facility in Sarnia that can produce up to 200 million litres, making the operation the largest single ethanol plant in Canada. Suncor has voluntarily sold ethanol-blended gasoline at Sunoco stations for several years.

The mandating of ethanol in gasoline has been the subject of considerable debate.

Critics argue such regulation and associated incentives amount to a subsidy for corn farmers, and that the production of corn-based ethanol consumes more energy than the fuel gives back.