1. Bio-energy: Possible Opportunities for Medicine Hat Alberta? November 5th, 2012 Jeff Bell Industry Development Officer, Clean Energy and Biorefining Bio-Industrial Opportunities Branch Alberta Agriculture and Rural Development

2. About the Bio-Industrial Opportunities Branch Alberta clean energy opportunities The importance of an integrated approach Possible next steps for Medicine Hat About UsAlberta OpportunitiesIntegrationNext Steps 2 Outline

3. Maximize the value of Alberta’s biomass resources through the use of technology and business development that support a competitive and diversified bio-based sector. Provide specialized information, knowledge and expertise to facilitate collaboration. Identify industry development opportunities to drive new industry in Alberta. About UsAlberta OpportunitiesIntegrationNext Steps 3 Bio-Industrial Opportunities Branch

4. About UsAlberta OpportunitiesIntegrationNext Steps 4 Bio-Industrial Opportunities Branch

5. 5 About UsAlberta OpportunitiesIntegrationNext Steps

6. Bioelectricity Proven technology with long history Gaseous or solid fuel Trash to Treasure: forestry waste (Hinton Pulp (West Fraser) Accomplishments: Approximately 409MW current capacity (500MW proposed by 2015/16) from various categories. The resource: Feedstocks from forestry are vast. Generation occurs via numerous processes (gasification, pyrolysis, combustion and cogeneration) Benefits:Often “Waste to Energy.” Can stabilize/diversify existing industry (i.e. Forestry). Decreased pollution/kWh. Unique challenges: Transmission capacity to remote areas and/or feedstock transportation costs. Association with struggling industries (i.e. lack of capital). 6 About UsAlberta OpportunitiesIntegrationNext Steps

7. Biogas Proven technology Works with range of feedstocks Trash to Treasure: agricultural waste (Highmark), waste water (city of Lethbridge) Accomplishments: 7 operating plants including, agriculture, food processing and waste water treatment. Several other plants being developed The resource: Total biogas potential has been estimated at 32 million tonnes annually which translates into about 30 PJ or 8000GWh (potential energy). Germany has installed over 6,000 plants. Benefits: Scalable to match size of farm. Derived from waste sources such as landfill gas, waste water treatment, manure, agricultural waste. Unique challenges: Lack of experience in Alberta, geographic specific feedstock uncertainty, low natural gas price. 7 About UsAlberta OpportunitiesIntegrationNext Steps

8. Primary energy production of biogas in Europe in 2007 (ktoe) 8 Biogas: European Precedent About UsAlberta OpportunitiesIntegrationNext Steps

9. Table 1. Inventory of livestock and municipal feedstock materials and biogas energy potential in Alberta Feed material Biogas yield Annual biomass production in tonnes Annual energy potential in PJ m 3 /tonne Beef cattle manure19 - 4622,955,0198.7 - 21.1 Hog manure: grower to finisher28 - 461,848,4151.0 - 1.7 Dairy manure25 - 323,217,7141.6 - 2.1 Poultry manure69 - 96284,3420.4 - 0.5 Animal fat801 - 83787,0001.4 - 1.5 Animal carcass (homogenized- bovine) 348 - 413264,0231.8 - 2.2 Municipal wastewater sludge17 - 140539,8350.2 - 1.5 Household waste143 - 214N/A Total straw and other roughages105 - 1582,654,5855.6 - 8.4 Thin stillage (ethanol by-product)58105,000– Total manure (including municipal sludge) and straw and other roughages –31,850,93321 - 39 Source: Alberta Agriculture based on various sources http://www1.agric.gov.ab.ca/$Department/deptdocs.nsf/all/agdex11397 9 About UsAlberta OpportunitiesIntegrationCo-ops Biogas: Alberta Potential

10. Renewable Natural Gas Accomplishments: ? The resource: Vast. Generation occurs via various feedstocks (agriculture, forestry and MSW). Ontario, BC, Quebec and many European jurisdictions have exisiting projects. Benefits:Helps reduce grid variability, storable renewable commodity, stabilize/diversify existing industry (i.e. Forestry). Decreased GHGs/kWh. Unique challenges: Low natural gas price, gas quality concerns Existing responses: Nine-Point Bioenergy Strategy: the BPCP Possible responses: Eco-Eligibility Standard, streamlined permitting Chance for Medicine Hat:Complementary to core business, Market diversification, increased efficiency, multiple revenue streams, on-site load displacement, chance to develop intellectual property and expertise 10 About UsAlberta OpportunitiesIntegrationCo-ops

11. Renewable Gasoline: Ethanol Most established renewable fuel High octane, fuel component. Most of the ethanol is used in E5-E10 blends; only about 0.25% of the ethanol is used as E85. Trash to Treasure: Municipal Solid Waste to ethanol (Enerkem) Accomplishments: Current capacity 40ML ethanol (1 plant). Two additional plants under construction for additional 60ML. Proposals for another 13 plants & ↑ of existing by 2015/16 The resource: Numerous distributed feedstocks of sufficient volumes. Benefits:Value-added refining of agricultural/forestry feedstocks in rural settings. Integration into refining/biochemical capacity. Mandated demand across jurisdictions. Unique challenges: The need for cost-effective second generation technologies for feedstocks with public support. 11 About UsAlberta OpportunitiesIntegrationNext Steps

12. Renewable Diesel Most diesel engines are warranted to run on anywhere between B5 (5% biodiesel) to B20 (20% biodiesel). Delivers similar torque and horsepower as diesel-powered engines; has a higher cetane rating, which can improve starting and reduce smoke emissions. Trash to Treasure: tallow, yellow grease (e.g. Kyoto Fuels) Accomplishments: Current capacity of 19ML biodiesel (1 plants). One major plant (66ML) in commissioning stage. Proposals for an additional 11 new plants & ↑ of both existing) by 2015/16 The resource: Numerous distributed feedstocks of sufficient volumes. Benefits:Value-added refining of agricultural/forestry feedstocks in rural settings. Integration into refining/biochemical capacity. Mandated demand across jurisdictions. Unique challenges: The need for cost-effective second generation technologies for feedstocks with public support. 12 About UsAlberta OpportunitiesIntegrationNext Steps

13. Top Five Countries for biofuel production 13 Biofuels: Precedent Net trade of fuel ethanol and biodiesel reached about 20 million barrels of oil equivalent (120–130 PJ) in 2009. About UsAlberta OpportunitiesIntegrationNext Steps

14. District Energy Accomplishments: Scattered examples including, Sherwood Park downtown core, UofA campus, Calgary East Village (Enmax), etc. The resource: Total heat demand in Alberta for buildings would mean about 8000MW Benefits: Increased resource efficiency, reduced pollution, frees up resource for export Unique challenges: Dependent on development planning, requires underground linear corridors, limited experience in AB Existing responses:? Possible responses: Planning for district energy, Streamlined permitting? Chance for Medicine Hat: Market diversification, increased efficiency, on-site heat displacement 14 About UsAlberta OpportunitiesIntegrationCo-ops

15. Natural Gas Cogeneration Accomplishments: Total provincial capacity of about 500MW pre- deregulation increased to ~ 4000MW as of 2009 (largely oil sands). Another 1,500MW proposed. The resource: Direct correlation to industrial growth, more growth equals more potential Benefits:Complements oil sands growth, increases baseload power, efficiency of gas use, decreased GHGs/kWh, proven technologies. Unique challenges: Requires integrated approach (separate extraction, upgrading and refining reduces potential) Existing responses: Treatment under Specified Gas Emitters Regulation Possible responses: Streamlined permitting, Cogeneration Systems Quantification Offset Protocol? Chance for Medicine Hat:Complementary to core business, Market diversification, increased efficiency, multiple revenue streams, on-site load displacement 15 About UsAlberta OpportunitiesIntegrationCo-ops

16. Natural Gas Cogeneration 16 About UsAlberta OpportunitiesIntegrationCo-ops

17. Natural Gas Cogeneration Options for “prime movers” include: 1.Reciprocating engines (internal combustion engine) 2.Gas turbines 3.Steam turbines 4.Fuel cells 5.Microturbines 6.External combustion engines (sterling engines) 17 About UsAlberta OpportunitiesIntegrationCo-ops

18. Waste Energy Recovery Accomplishments: Scattered examples in Alberta (e.g Maxim’s Gold Creek, Genalta, Great Northern Power) The resource: Initial estimates based on National Pollution Inventory data indicate more than 300 MW of potential may be available Benefits: Increased resource efficiency, reduced pollution, Unique challenges: Resource uncertainty, depends on buy-in from host facility, lack of experience in Alberta, challenges under Power Engineering Regulation Existing responses:Waste Heat Recovery Quantification Protocol Possible responses:Streamlined permitting Chance for Medicine Hat: Market diversification, increased efficiency, multiple revenue streams, on-site load displacement 18 About UsAlberta OpportunitiesIntegrationCo-ops

19. Integration: Bio-refining 19 About UsAlberta OpportunitiesIntegrationNext Steps

20. 20 Integration: Bio-refining About UsAlberta OpportunitiesIntegrationNext Steps

21. Integration: Co-siting Blueflint Ethanol Plant: Underwood, North Dakota 21 About UsAlberta OpportunitiesIntegration

22. Integration: Co-siting Strathcona District Heating Plant: Sherwood Park Alberta 22 About UsAlberta OpportunitiesIntegrationNext Steps

23. Integration: Multiple Values Wood Biomass Project Camrose Alberta 23 About UsAlberta OpportunitiesIntegrationNext Steps Waste water treatment Energy

24. Integration: Multiple Values Soave Hydroponics Kingsville, Ontario 24 About UsAlberta OpportunitiesIntegrationNext Steps Heat Electricity CO 2

25. 25 Next Steps: Feedstock Inventory About UsAlberta OpportunitiesIntegrationNext Steps Type (moisture content, calorific value. etc) Available volume Current disposal method Seasonal availability Location (look within about 50km radius) Cost (positive or negative) Owner (private sector, public, etc) Special challenges (e.g. specified risk material)

26. 26 Next Steps: Feedstock Inventory About UsAlberta OpportunitiesIntegrationNext Steps Diversity of feedstocks: 1. Agricultural waste 2. Forestry waste Food processing waste 3. Slaughterhouse waste 4. Feed-lot waste 5. Greenhouse waste 6. Landfill gas 7. Wastewater treatment gas 8. Waste from clearing land or right-of-ways 9. Municipal organic (e.g. wood) waste 10. Residential garden waste 11. Grocery store waste 12. Restaurant waste 13. Dedicated energy crops

27. 27 Next Steps: Site Inventory About UsAlberta OpportunitiesIntegrationNext Steps Land value Current owner Current zoning Heat available (heat supply) Heat requirements (heat demand) Rail access Road access Gas infrastructure Electrical infrastructure Coincidence with feedstock sources Opportunities for integration (e.g. value-add bio-chemicals)

28. 28 Next Steps: Talk to your neighbours About UsAlberta OpportunitiesIntegrationNext Steps Innovative Food Concepts Inc. Landmark Feeds, Nutreco Canada Inc. Medicine Hat Meat Traders Ltd. Archer Daniel Midlands Medicine Hat College Economic Development Authority Cypress County Friesen Livestock Ltd. Kirschenman Farms Mike's Meats Inc. Red Hat co-op Methanex Criterion catalyst Cancarb

29. 29 Next Steps: Unique opportunity? About UsAlberta OpportunitiesIntegrationNext Steps Municipal-owned natural gas Municipal-owned electricity Co-siting with natural gas plant Co-siting with cogeneration plant Renewable natural gas History of chemical processing Value-add renewable chemicals

30. Contact: Jeff Bell Industry Development Officer, Clean Energy and Biorefining, Bio-Industrial Opportunities Branch, Alberta Agriculture and Rural Development Phone: 780-638-3158 Email: jeff.bell@gov.ab.ca

31. Bioenergy grant programs Two major programs have been fully allocated: 1.The Biorefining, Commercialization and Market Development Program 2.The Bioenergy Infrastructure Development Program The two programs awarded 150 million dollars to about 70 organizations. Eligible expenses ranged from pre-feasibility to capital expenditures About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta

32. Producer Credit Program Intended to: 1.encourage investment in bioenergy production capacity in Alberta; 2.reduce reliance on fossil fuels; 3.support Alberta’s Renewable Fuels Standard; 4.create value-added opportunities with economic benefits. About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta

33. Producer Credit Program About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta

34. Renewable Fuel Standard Requires an average of 2% renewable diesel in diesel fuel and 5% renewable alcohol in gasoline sold in Alberta. Fuels must demonstrate at least 25 % fewer greenhouse gas emissions than the equivalent petroleum fuel. About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta

35. Renewable Fuel Standard About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta

36. Renewable Gasoline: Fuel Methanol Emerging biofuel option. Less expensive to produce than ethanol. More toxic than ethanol. Alberta RFS allows fuel methanol. About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta

37. Renewable Gasoline: Butanol Emerging biofuel option (also can be used as a solvent). No commercial plant in North America. Almost as much energy per litre as gasoline. 85 % strength can be used in cars designed for gasoline (petrol) without any change to the engine (unlike E85). Alberta RFS allows butanol. About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta

38. Renewable Gasoline: Green Gasoline Manufactured using pyrolysis Energy content and fuel properties comparable to gasoline Alberta RFS does not currently allow non alcohol renewable gasoline. About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta

39. Permolex Growing Power Hairy Hill CR Fuels Enerkem Renewable Gasoline: Current Situation About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta

40. Renewable Diesel: HDRD Hydrogenation-Derived Renewable Diesel Refined by a hydrotreating process. Meets the petroleum diesel ASTM specification About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta

41. Renewable Diesel: Current Situation Western Biodiesel Kyoto Archer Daniel Midlands

42. Biocrude Blended with crude petroleum oil rather than refined diesel or gasoline. Can be used to add renewable content to diesel or gasoline. Avoids quality issues Rises policy questions (e.g RFS eligibility). About UsAlberta BioenergyProgramsIntegrated BiorefineriesAbout Alberta