Canada is moving toward a 5% bio-fuels policy by 2010. That’s the word from agriculture minister Chuck Strahl and Environment Minister Rona Ambrose. Think about it. Every time you fill your car in 2010 3 litres will be straight from some type of biological source.
The question is will consumers like that in 2010? I don’t know. Getting a slurp of that bio-fuel might make our older cars sputter. However, in reality that is probably unlikely. Brazil already feeds it consumers something called E-85. This is fuel made up of 85% ethanol. Going to 5% seems a baby step beside that.
We’ll see. Ethanol and bio-diesel is a growth industry in North American agriculture. Plants are seemingly going up everywhere. They are the lifeblood of our political culture looking at a sure and fast way to solve North American farm incomes. Right now it’s just a theory based on hype and expectations fueled by the bio-fuel lobby thirsting after cheap feedstocks.
When the Ontario Corn Producers Association launched their countervail action the whole ethanol industry lined up against them at a time when farmers were rallying across Ontario. They want their corn, cheap, cheap, and cheap and if that is dumped subsidized US corn so be it. It is one thing to want a commodity at world price, but it is another to have ethanol subsidized by government.
Ethanol is no panacea. Some of the biggest cheers I got this past winter at five different farm rallies were about the Ontario ethanol policy. Farmers want to be included. As it is now, the Ontario ethanol policy is a green light to import US corn.
I have even read some ethanol-sponsored propaganda of how the increased production of ethanol will eventually increase the price of Ontario corn and increase present Ontario acreage by one third. The hype by this industry has no shame.
For the most part this is lost on the consuming public. Price is king when it comes to filling up at the pumps. Canadian consumers don’t care whether US corn is being fed into consumer subsidized Ontario ethanol plants. However, they should care because their tax dollars are going to artificially support this industry.
It pretty obvious to me that in Canada the ethanol industry is highly dependent of increasing government support. They balance that by implying that their capacity to eat Canadian corn is part of the answer to chronic farm income problems of corn producers. However, this is crazy. Demand for corn has increased since 1997 in Ontario but both price and acreage has declined. The increase in demand has been met squarely by importing cheap subsidized and dumped US corn.
So when it comes to Rona Ambrose and Chuck Strahl making an announcement about a “bio-fuels” strategy, there will be certain groans in parts of rural Canada. Simply put the producers of those feedstocks must be compensated fairly for what they do. It shouldn’t be a bigger green light for dumped US feedstocks.
He needs to keep in mind Brazil produces great gobs of ethanol made from sugar cane. They would love to fill any Canadian need.
What has become obvious to me through all my commentary about ethanol is that alternative fuels are more about choices than availability. In other words, if it weren’t for “big oil” there would be lots of opportunity for Canadian consumers to use something else. As it is now, “big oil” has a vested interest in keeping consumers hostage to the price of oil. So while Brazil has E-85, in Canada we seem to be celebrating a proposed E-05. It doesn’t quite add up.
How it will all turn out nobody knows. The key is to be honest about “bio-fuel” and what that could mean for consumers as well as Canadian farmers. It isn’t the panacea for Canadian agriculture projected by some. It’s probably the same for the consumers at the pump. However, it is a start. With consumers about to be held hostage at the gas pumps this summer, anything different Vis a Vis bio-fuels will surely be welcome.