Agreement could land biofuel plant in northwest.

With cautious optimism, Greenstone, challenged by higher energy costs, is looking to jumpstart its economy by becoming a leader in biofuels.

Representatives from the former town council have entered into a memorandum of understanding with DynoMotive Energy Systems Corp., a Vancouver-based company keen on developing a biofuel refinery in the area.

The refinery will manufacture BioOil, a liquid generated by waste streams (wood shavings and bark) from sawmilling operations. This liquid can replace fossil fuel for green-power generation, transportation and district heating. It can also manufacture char, a solid compound taken from biomass that can be used to generate steam.

Harry Kelly, director of economic development for Greenstone, is bringing the current municipal government to date on the biofuel focus.

"We want to be in the fuel supply business because we have a lot of material that we just landfill here," Kelly explains.

The municipality had previously received some proposals from independent consultants interested in developing a biofuel initiative. Representatives from funding agencies also previously expressed interest in a biofuel initiative.

As the project moves through the approval process, a scoping analysis will be conducted in March to determine the size of the refinery needed to manufacture the biofuels. By August, Kelly expects to have some parameters and an application in place to forward to FedNor and the Northern Ontario Heritage Fund Corp.

"All levels of government have been supportive of the idea of (generating) energy from waste," Kelly adds. "This will give new value to value-added."

Convinced that a plethora of opportunities awaits the private sector, Dr. Luc Duchesne, formerly a research scientist for non-timber forest products for Natural Resource Canada in Sault Ste. Marie, shuffled over to accept a position with DynoMotive, and has been instrumental in establishing a market for the company's fuel sources. He is considered one of Canada's leading authorities on non-timber forest products.

"We can produce BioOil from bark at roughly $4.80 per gigajoule. This one gigajoule can be used to replace one gigajoule of natural gas, which will cost on average $8.30 per gigajoule."

The proposed plant may process up to a maximum of 100 tonnes of biomass per day. To bring it into perspective, one tonne of dry wood converted will produce roughly 70 per cent of BioOil and 20 per cent char, with the remaining 10 per cent of the gases redirected back into the reactor to be used as a heat source. he explains.

The biofuels are considered clean energy in that through the conversion process only carbon dioxide and nitrous oxide are emitted.

"Because we are using waste to replace fossil fuels, it is carbon creditable," Duchesne explains.

Duchesne notes the system is gaining interest throughout the world for three fundamental reasons: it is cost-effective, it can be stored, and it is concentrated energy and can therefore be moved around with ease.

The system will work well in communities that are located at the end of the power grid or not linked to electrical generating stations. Areas with a restricted energy source tend to be limited in attracting potential industries.

"We find that economic development is linked to power availability. Without power. the community cannot promote industry activity," Duchesne adds.

In the short run, the municipality may have to take an economic shortfall to develop an internal energy source if it wants to build a value-added industry. BioOil has yet to replace any fossil fuel, so the municipality would be one of the first commercial organizations to implement such a project. Paving the way can be a challenge since there is virtually no history to the new fuel source and that inhibits investment from venture capitalists requiring track records and existing infrastructures be in place.

Questions surrounding the viability of the plant will be answered by this fall.

www.dynamotive.com

www.greenstone.ca

By KELLY LOUISEIZE

Northern Ontario Business