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Timiskaming grain a potential source of fuel.

Get the lead out, put the ethanol in, and the sound of gasoline running through service station pumps will be music to the ears of Denis Morin.

The chemical-engineer-cum-businessman from Gentilly, Quebec, on the south shores of the St. Lawrence River near Trois Rivieres, is setting his sights high these days.

If his plans work, his company, Eco Cinergie Inc. and Hofmann Technical Services Inc., will take a dominant position in the ethanol-additive industry in both Ontario and Quebec.

Thanks to the environmental movement, there is more than just food value in those bushels of grain on Timiskaming District farms.

With technology developed by Eco's sister company, Hofmann Technical Services Inc. of California, Northern Ontario barley will be used to make ethanol.

Using the lead substitute has gained support since ethanol, when blended with gasoline, reduces carbon dioxide emissions by 10 per cent and carbon monoxide emissions by up to 30 per cent.

Grains are distilled to manufacture the chemical, and the by-product can be used for animal feeds -- another important factor in Morin's profit equation.

The businessman favors the Timiskaming District, located about 160 kilometres north of North Bay, because the region grows enough barley on its 10,000 hectares to supply a 20-million-litre ethanol fuel plant and it is also close to markets.

Twenty million litres of ethanol is the magic number right now, according to the study conducted by Eco Cinergie. The study indicated that the potential demand for ethanol in Ontario alone is 350 million litres. Current production is a minuscule 16 million litres.

If the government decides to legislate ethanol into fuels, the potential demand across the country could reach more than a billion litres annually, Morin estimates.

The $25-million plant would be located somewhere in the Temiskaming District on a 100-acre site and would produce 20-million litres.

Morin's foresees a variety of new products resulting from ethanol manufacture. Included in the study are plans to provide feedstock for 11,000 head of cattle.

If half the stillage production was consumed by the current cattle population in Timiskaming, a 5,200-head feed lot would be necessary to dispose of the distillers dried grains used in ethanol manufacturing.

Part of the project includes selecting an alternative for an energy source to power the plant. Under scrutiny are a cogeneration plant, a supply of steam from an adjacent steam producer and purchase of electricity from Ontario Hydro, or the purchase of all electrical and steam requirements from an adjacent power plant.

Whatever the source, Morin wants to reuse heat for fish-raising and greenhouse operations.

Leaning back in his chair, he cites factors like fish growing an inch a month under warm water conditions and notes, "We have plenty of fresh water here." He estimates fish production from the complex at millions of pounds.

There is also plenty of demand for fresh produce, Morin says, adding that a greenhouse complex over the acreage could supply the need.

Morin estimates that the ethanol plant will occupy 30 to 40 acres and that the feedlot and agricultural complex would another five to ten acres each.

But to do all this takes money, he admits.

His company wants to be a major player and is prepared to put up $70,000 of the $210,000 cost of a feasibility and business study which could get under way this spring. However, the remaining $140,000 will have to come from elsewhere, such as the federal and provincial governments and from local investors.

Once the capital costs, revenues and return on investment factors are determined, Morin wants to get on with construction and get the plant in operation as soon as possible, instead of by the 1995 planned deadline.

The Quebec businessman is confident he can attract up to 75-per-cent financing for the operation. That would leave the other 25 per cent to be raised by investors.

Despite the heavy financing costs, Morin remains optimistic that he can keep his production costs for ethanol at 40 cents a litre, which is in the competitive cost range.

Morin would like to see Timiskaming farmers participate in the venture, but farmers are being cautious and will want to see more cost figures, according to Graydon Bowman of the Timiskaming Grain Growers Association.

Farmers "have to see that the ethanol plant will help provide value-added products," Morin argues, adding that he would welcome local aid through a farmers co-operative to support the proposed plant.

A key client is United Co-operatives Inc., which has experimented with "green" gasoline in southern Ontario.

Tri-town Economic Development Officer Bryan Wareing of the New Liskeard, Haileybury and Cobalt area, has been involved since the inception of the idea. He points to increased demand for the product in southwestern Ontario where 21 gas stations are selling ethanol fuels in the premium and mid-premium grades.

Wareing said Ontario has been "behind the times" compared to Saskatchewan and Manitoba, which have been producing gasahol for a decade.

In Timiskaming, where news reports have quoted unemployment rates as high as 17 per cent, Wareing sees the proposed ethanol plant as a boon to the district.

"The potential spinoff is great," he said, referring to the value-added agricultural products which are expected to be produced when the plant goes into operation.

Wareing estimated the $25-million investment could roll about $75 million a year back into the district.

Morin agreed that the spinoff effect would be tremendous. It will be even more so if another of his ideas bears fruit: he wants to consider the possibility of blending ethanol with gasoline in this area rather than shipping it south to plants in southern Ontario.

"We could distribute in the north too."
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Title Annotation:Report on Energy & the Environment; use of barley from Timiskaming District farms in Ontario to make ethanol
Author:Patrick, Jim
Publication:Northern Ontario Business
Date:Jan 1, 1993
Previous Article:Look to the environment for business opportunities, advises provincial minister.
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