Suncor revives Ontario ethanol plant expansion
Renewable energy credits at heart of $120M investment
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-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.