November 6, 2003
A Future for Pelletized Biofuels
This autumn was another tough one for asthma sufferers in Winnipeg thanks to the destructive practice of stubble burning, where farmers burn off excess straw in the fields. As usual, the smoke wafted into the city and young children, my son included, ended up at the doctor, or worse, the hospital.
Wouldn’t it make more sense to avoid the quiet health damage by not burning this stuff in the field? One option is to convert the straw into something valuable like strawboard. Another, less difficult opportunity sits on Manitoba’s policy horizon. It is an environmentally friendly form of energy called pelletized biofuel. Simply, it is compressing natural prairie grasses into pellets to make a highly efficient, energy form that looks like rabbit food. It is stored in large bins and hoppers, easy to transport and produces the same amount of energy for the half the equivalent energy cost of natural gas.
Forget about the fading grain industry and the headaches of dealing with the Canadian Wheat Board, take pelletized grass and ship it south. The stuff is a perennial plant, does not require reseeding and expensive inputs, and can be harvested with regular equipment in the snow if necessary. Pelletized biofuel is a well established industry in northern Europe. We have some of the highest per household heating requirements and also sit on the border of a huge American market struggling with high gas prices and energy shortages.
Most impressively, this industry, due to its productivity, can develop with no government subsidies. Pelletized grass produces 19 units of energy for every unit of energy consumed in production. The slow motion boondoggle, ethanol, hardly breaks even, and manufacturing it may even consume more energy than the final product contains. Despite this, don’t be surprised to hear about some taxpayer-financed ethanol megaproject soon.
This and more is discussed in a recent “no holds barred” interview with Tom Adams, head of Toronto-based Energy Probe, a “green” energy think tank. Canada’s most original and clear thinker on energy matters, and the most expert critic of Ontario’s botched energy policy, Adams was quoted extensively in the media during the August electricity blackout. Recall the curious spectacle of the now lapsed Eves government begging the public to conserve power, when official policy was to keep prices artificially low and subsidize excess consumption with tax dollars.
A strong proponent of markets and price signals as tools to promote energy conservation, Adams criticizes energy megaprojects and fads. Inevitably, these draw costly public subsidies and heavy government interference in the energy marketplace. He also punctures emerging “green power” myths. Manitoba’s energy opportunities, in his view, are enormous but constrained by traditionally dirigiste thinking. Some of his thoughts:
Pelletized biofuels raise none of these objections. Adams sees an enormous upside for Manitoba if our governments got smarter about energy policy. He recommends that we shun subsidies and megaprojects. We can stop wasting current electricity production and sell it into other markets at a big premium, by giving individual consumers and industries ownership to historical power quotas and allowing them to keep the proceeds from selling off conserved power. We can shift to peak-load pricing and refrain from subsidizing an artificial ethanol industry. We can move towards cleaner heat by encouraging pelletized biofuels, without government “help.”
All to the immediate benefit of all, including the unintended victims of stubble burning.
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."