Sun­cor re­vives On­tario ethanol plant ex­pan­sion

Re­new­able en­ergy cred­its at heart of $120M in­vest­ment

Calgary Herald - - CALGARY BUSINESS - DAN HEAL­ING

A$120-mil­lion Sar­nia, Ont., ethanol plant ex­pan­sion put on hold by Sun­cor En­ergy in Jan­uary is back on the books as a thaw­ing econ­omy and bet­ter com­mod­ity prices en­cour­age the Cal­gary-based ma­jor to open its cheque­book.

In a news release Fri­day morn­ing, pres­i­dent and chief ex­ec­u­tive Rick Ge­orge touted Sun­cor’s re­new­able en­ergy cred­its while an­nounc­ing that the dou­bling of the plant’s ethanol pro­duc­tion ca­pac­ity to 400 mil­lion litres per year will be com­pleted in late 2010 or early 2011.

“As a Cana­dian in­dus­try leader in re­new­able en­ergy, we’re ex­cited about the prospect of in­creas­ing our al­ter­na­tive fuel pro­duc­tion and ex­plor­ing fu­ture op­por­tu­ni­ties to in­te­grate ethanol into our ex­panded re­tail op­er­a­tions,” Ge­orge said.

In the release, Sun­cor claims the ex­panded St. Clair ethanol plant, along with Sun­cor’s in­vest­ment in four wind­power projects across Canada, are ex­pected to off­set nearly one mil­lion tonnes of car­bon diox­ide per year.

Sun­cor was tar­geted by 21 en­vi­ron­men­tal ac­tivists from Green­peace ear­lier this week. The group en­tered its Fort McMur­ray re­gion oil­sands site from the Athabasca River and were ar­rested.

Spokesman Brad Bel­lows said on Fri­day Sun­cor is de­lib­er­ately try­ing to off­set its oil­sands in­vest­ments with re­new­able en­ergy ac­tiv­ity.

“Sun­cor is work­ing on what we call a par­al­lel path of con­tin­u­ing with oil­sands-fo­cused hy­dro­car­bon in­vest­ment but also in­vest­ing in re­new­able en­ergy,” he said.

“But that in­vest­ment in re­new­able en­ergy is backed by a hy­dro­car­bon bal­ance sheet. So the im­prove­ment in oil prices and the gen­eral eco­nomic con­di­tion has given us more cer­tainty in mov­ing for­ward on the re­new­able en­ergy side.”

He said the com­pany is also mo­ti­vated by time-lim­ited op­er­at­ing fund­ing from Nat­u­ral Re­sources Canada de­signed to make up the dif­fer­ence be­tween fos­sil fuel costs and the cost of corn feed­stock for the ethanol project.

In the release, Sun­cor said fur­ther re­new­able fuel in­dus­try growth will re­quire con­tin­ued part­ner­ships with the pub­lic sec­tor, adding that the oil com­pany has his­tor­i­cally blended ethanol into gaso­line at up to 10 per cent in On­tario.

Sun­cor is to com­plete its $20-bil­lion merger with Petro-Canada by the end of Novem­ber, Bel­lows noted, adding that the com­pany’s over­all cap­i­tal plan for 2010 will be fin­ished at about the same time.

An­a­lysts ex­pect the com­pany will ap­prove restart­ing work on its $20.6bil­lion Voyageur oil­sands mine and up­grader se­ries of ex­pan­sions also sus­pended last Jan­uary.

Sun­cor slashed its 2009 cap­i­tal spending plans in half, to $3 bil­lion from the $6 bil­lion set last Oc­to­ber, when it ex­tended its Voyageur timeline by at least a year. The $6 bil­lion, it­self chopped from ear­lier es­ti­mates of $9 bil­lion to $10 bil­lion, is 21 per cent lower than 2008 spending.

Voyageur was in­tended to in­crease oil pro­duc­tion to 550,000 bar­rels per day by 2013. As of Dec. 31, Sun­cor had spent about $7 bil­lion on the se­ries of projects.

Cal­gary Her­ald Archive

Cal­gary-based Sun­cor En­ergy is spending $120 mil­lion to dou­ble ethanol pro­duc­tion ca­pac­ity at its St. Clair plant in Sar­nia, Ont., to 400 mil­lion litres per year. The ex­pan­sion will be com­pleted in late 2010 or early 2011.

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