North American Bioenergy Overview Opportunities & Risks for Alberta

41 Pages·2013·1.17 MB·English

by  Ian Thomson

North American Bioenergy Overview
Opportunities & Risks for Alberta

Government of Alberta – May 23, 2013
Ian Thomson
Partner
Agenda
 Strategic Overview – Global, Canadian context
 AB Perspective on Markets - Canada/North America
 Maintaining social license & market access - GHG, Carbon
Intensity Thresholds, Sustainability, Food and Fuel
 Emerging Opportunities & Players
 BioIndustrials – Real, and When?
Sources/Perspective
 IEA (OECD) + Ecofys + EIA
 World Energy Outlook 2011
 Energy Technology Perspectives 2008, 2010
 Energy Futures 2050
 Industry experience –
 Funding- SDTC, ecoENERGY, ecoABC, BCMDP, BPCP
 Technical Standards - CGSB, ASTM
 Sustainability certification – national, international (EU-RED, ISO)
 Financing - $15m+ (equity & debt, incl. AFSC)
 1G, 2G technology & feedstock project development & assessment
(biofuels, power)
 Policy – industry associations, technical advisory to regulators
Snapshot: Renewables 2013
• Renewables are dead; long live renewables!
• Liquid fuels markets have exponential headroom
• … but small margins in a land of giants, and NGL’s a ‘new’ entrant
• Feedstock still king – secure access, lowest cost
• 2G time-to-market promises came up short … but 2013 a big year for cellulosics
• RFS in EU, US are under petro pressure – E15 (Cda at 5% federal, 8.5% max prov’l)
• Significantly more capital intensive 1G2G
• Un-level playing field (w/ fossil incumbent) – access, sustainability
• Deficit realities a backdrop to future of public sector funding/incentives
Energy supply by source (IEA): 2050 markets
Pre-fracking, and assumes demand drop post-2020…2010 worldview of ‘Peak Oil’
Global Biofuel demand, by region 2010-2050
Canadian Context - Renewable Fuels
• Agriculture, forestry have driven development of renewables
 Abundant feedstocks in both sectors – economic development has been the driver
• Renewables in Canada developed comparatively late in a global
context
 Less political attachment to first generation (1G)
• Downstream petroleum highly concentrated
 Majors will import some elements of global renewables platforms
 Opportunity to differentiate in market limited; policy role heightened
• Minimal invested capital 1G production relative US, EU, Brazil
Renewable Content Regulations – Ethanol and Renewable
Diesel - Provincial Mandates (ML)
GASOLINE (western CDA)
Demand – 818ML
Supply – 554ML
Gasoline
Supply Deficit <264ML>
Diesel
DIESEL (western CDA)
D - 230
Demand – 343ML
S - 0
D - 290 Supply – 362ML
D - 162
S - 82 Supply Surplus 19ML
D - 130 S - 342 D - 136
S - 11 S - 130
D - 148
D - 40 D - 1,000+
S - 331
S - 20 D - 25 S - 1,152
5% S - 0
4% 5% D - 160*
7.5%
2%
2% 8.5% S - 302
5%
2%
2%
Markets for Alberta Biofuels - Ethanol
 US
 $0.49/gal blender credit (VEETC) expired December 2011
 RIN (clip-able insertion certificate) volatility
 Canadian feedstocks/fuels now qualify in EPA ‘foreign biomass’ rules
 However, E10 ‘blendwall’ (contested…)
 Positive outlook for western Cdn producers, feedstocks IF blendwall does
not see mass export into Canada at lowest marginal cost of production
 Canada
 Western Cdn demand (~818mL) outstrips capacity (~525mL)
 Wheat ethanol is low Carbon Intensity (63.6% reduction GHGenius v4.03)
 Woody biomass potential
 Production/blending incentives – federal, ON, MB. SK, AB
 Low CI ethanol demand from BC LCFRR, potentially from CA
Markets for Alberta Biofuels - Biodiesel
 Canada
 BC – RFS plus Low Carbon Fuel Requirement (LCFS)
– 130mL @ 4% content
– LCFS comes into force July 2013
 Rest of Canada – under federal RFS 2% (provincial counts)
 Gazette of proposed RFS changes (heating oil exemption) published 5/13
 Canola predominant in West, some soy
 Mixed feedstocks in ON, PQ
 Incentive programs available AB, SK, MB, Federal
 Access to US Blenders Credit (to Dec 2013) and RIN generation