Sunday, June 03, 2007

Ethanol Skeptics

Below is more information about the Suncor ethanol plant.

The Energy Probe writes, "But what would it take to make ethanol self-sufficient? Tom Ryley, executive vice-president of Suncor Energy Products, says ethanol could be economic "without a huge amount of government support" if corn prices were sustained at or below the current level of about $2.50 a bushel, and oil prices stayed above $70 (U.S.) a barrel. But with the price levels of those two commodities fluctuating, there is still a need for government support.

In fact, Mr. Ryley said, it was the government's excise-tax break on ethanol that prompted Suncor to start blending it with its gasoline back in the mid-1990s. That government support for the ethanol component made it cheaper to produce the blended product.

Since then, with environmental concerns more front and centre in consumers' minds, Suncor has also seen ethanol as a means to improve the company's environmental performance.

But environmentalists aren't as keen on ethanol as one might expect. Tom Adams, executive director of Toronto-based energy watchdog Energy Probe, concedes that ethanol is "a good fuel in a lot of respects" because it burns cleanly, but he still considers himself an "ethanol skeptic."

One problem is "ethanol cannot make it on its own horsepower," he said. "It's highly dependent on government protection," both from direct subsidies and the coming regulations that will force minimum levels in gasoline sold to consumers. "

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