Opportunities for the expansion of ethanol production in western Canada
A renewed interest in ethanol production in North America is occurring because of: (1) higher gasoline prices which have improved the viability of ethanol investments; (2) commitments by Canada, the U.S., and other nations to reduce greenhouse gas emissions; (3) opportunities for rural employment through additional value added industry; and (4) a desire to reduce burdensome grain stocks and thus assist in the ultimate recovery of grain prices benefitting all agricultural producers. Changes in transportation costs for export grain in Western Canada provide a further incentive promoting the ethanol industry. This paper summarizes some of the developments and issues relating to the expansion of ethanol production in Western Canada. Among the issues for those interested in ethanol have been: (1) Is this industry likely to be viable and to compete with other fuel sources, particularly gasoline? (2) Does the industry require ongoing incentive schemes in order to compete? (3) Does the industry require additional incentives in order to assist Canada in reducing greenhouse gas emissions? (4) How effective is ethanol in reducing greenhouse gas emissions?, and (5) Is the expansion of ethanol production effective in reducing grain carryovers to help stabilize grain prices? None of these questions have complete or absolute answers, but additional research and experience is shedding light on these issues.
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