The federal government’s decision to permanently exempt Newfoundland and Labrador from a two per cent renewable content requirement for diesel fuel and home heating oil may be partly based on logistics, but the head of a national association for renewable fuels believes it’s thanks to the lobbying efforts of the oil and gas industry.
And he says the exemption has implications for future generations.
“I think the oil and gas companies lobbied against the mandate, and they won,” said Tim Haig, acting president of the Canadian Renewable Fuels Association (CRFA).
“I think people need to understand that you need alternatives.”
The new regulation came into effect July 1. Temporary exemptions for Quebec and the Maritimes will expire Dec. 31, 2012, giving them time to install biodiesel infrastructure.
Newfoundland and Labrador is the only province to be permanently exempted.
In an email to The Telegram, a spokesman for Environment Canada said that given the province has no local sources for biodiesel, it would be forced to transport the fuel long distances by truck and ferry.
The province was already permanently exempt from a rule requiring five per cent renewable fuel content in gasoline, which came into effect on Dec. 15, 2010.
The Environment Canada spokesman said Newfoundland and Labrador was exempt from that regulation for similar reasons.
The two renewable fuel measures will entail the production of more than 2.5 billion litres of renewable fuels each year nationwide.
According to a report card prepared last year by the CRFA, these measures will reduce greenhouse gas emissions in Canada by 4 million to 4.5 millions tonnes per year.
Whether or not you believe the threat of greenhouse gas emissions and global warming, Haig said it’s clear that easy oil will eventually become a thing of the past.
“People say the big thing is conservation and sure, conservation is important,” said Haig.
“But really, having alternatives is the only true (way) to ridding ourselves of the addiction to oil.”
The price of gas in Newfoundland and Labrador is higher than in any other Canadian province. Haig said without having alternatives to petroleum, there is no chance of the price coming down.
In an email to The Telegram, a spokeswoman for the Department of Natural Resources said Minister Shawn Skinner submitted a letter to Environment Canada supporting North Atlantic Refining Ltd.’s request for an exemption.
She said there are a limited number of ferry crossings for fuel each week because of passenger ferry safety regulations, adding there are further logistical challenges when it comes to producing biofuels.
“For example, many of the province’s potential renewable fuel feedstocks already have uses such as feed for fur farms and pet food,” she said. “Diverting such feedstocks from their present uses to fuel production might not be the best use of these resources.”
First-generation ethanol feedstocks such as corn, sugar cane and wheat are not produced in Newfoundland and Labrador, the spokeswoman said, and advanced biofuel production processes that produce ethanol from wood fibre have not reached the large-scale production stage.
The spokeswoman said the geography of the province would necessitate major costs for transporting feedstock from farms, fish plants, and sawmills to biorefineries.
Since 2005, biodiesel production capacity in Canada has experienced an annual average growth rate of 140 per cent, according to the CRFA report card.
However, growth in renewable fuel production in Atlantic Canada has been almost non-existent. A single demonstration facility using energy beets as feedstock was operating in Milford, N.S., according to the report card, otherwise there was no other production activity reported in the region.
The Department of Natural Resources has not detected any net benefits of an environmental or economic nature for implementing renewable fuel use regulations, though it continues to study the issue, the spokeswoman said.
In 2010, officials from the province’s energy, forestry and agrifoods branches of Natural Resources, Fisheries and Aquaculture, and Environment and Conservation formed a working group to develop a renewable fuels policy framework.
The Natural Resources spokeswoman said its goal is to determine whether the province has the potential to become a sustainable producer of renewable fuels or related technology.
“The group has been working diligently since that time to address several key issues including quantifying the province’s renewable fuel feedstocks, identifying the most promising technologies for converting them into biofuels, and identifying the uses for these fuels.”
The spokesman for Environment Canada noted the permanent exemption does not mean that a renewable fuel plant could never be built in Newfoundland and Labrador.