A biodiesel plant under construction just outside Lethbridge will start production in a couple of months.
Kyoto Fuels Corp. expects to produce 66 million litres of canola-based biodiesel annually beginning in February or March, and will consume about 650,000 acres’ worth of production. It will be the country’s largest biodiesel plant and the only plant of its kind in Western Canada. However, other biodiesel plants are slated to be built in Alberta, but Kelsey Prenevost, president and CEO of Kyoto Fuels, said he’s not concerned by the competition.
“We’re close to going into production,” said Prenevost. “So we have two years’ lead. Demand for biodiesel is much more than we can produce. Alberta alone needs 120 million litres of biodiesel a year to bring diesel to the mandatory two per cent blend. B.C. plans to mandate five per cent biodiesel blends, 240 million litres of biodiesel a year. Add in Saskatchewan and Manitoba, and the biodiesel needs are at least 570 million litres. That makes our 66 million litres look pretty small.”
To meet mandatory biodiesel levels, Canadian companies have been importing American biodiesel, much of it made from Canadian canola. The U.S. will require more than 4.75 billion litres in 2012. Prenevost said economics will favour locally produced biofuel and his company plans to expand the plant, doubling its capacity by 2013, which would make it two-thirds the size of ADM’s planned Lloydminster plant.
The industry has come a long way during the six years he has been working on the Lethbridge project, said Prenevost.
“It’s simple to make biodiesel,” he said. “You just add methanol and a little lye to waste grease or vegetable oil. But making biodiesel that meets the specs of engine manufacturers and big fuel suppliers like Shell, Suncor and Husky takes a lot more.”
When he started, waste grease was considered the best feedstock, said Prenevost. Kyoto Fuels originally planned to use tallow, a waste product from meat plants, and selected the Lethbridge site because it is equidistant from slaughter plants in High River and Brooks. Canadian regulations do not allow tallow-based biodiesel, because it freezes at higher temperatures than vegetable oil-based biodiesel. But tallow-based biodiesel is accepted in the U.S., so Kyoto Fuels could export it to the U.S.
Because the plant can use almost any feedstock, Prenevost said his staff are considering alternatives, such as camelina, that might cost less and avoid using a food crop.
Although the basics of biodiesel production are simple, Kyoto Fuels’ process is complex. It includes recovering catalyst and other products, and employs a zero-water process, which is more costly to set up but reduces operating costs. It also avoids the risk of producing soap instead of diesel from oil and lye.
Blending biodiesel with petroleum diesel can also be a challenge. The products must mix completely and Kyoto Fuels uses high-pressure injection-blending equipment to create a perfectly homogeneous fuel.
“At every stage in developing our process, we’ve used the best-in-class technology,” said Prenevost. “We’re also very much focused on minimizing our environmental impact. Sometimes it’s cost a little more, but we want to be as environmentally sustainable as we can. We use an economizer to preheat our boiler and cut our natural gas use, we use LED lights almost everywhere and the plant is completely self-contained, recovering alcohols.”
The energy balance on the process is 5:1, so for every litre of fuel burned five litres are produced, a much better ratio than oilsands or heavy oil upgraders can achieve. Kyoto Fuels’ engineering process has been meeting the stringent quality, safety and environmental ASTM (American Society for Testing and Materials) standards for some time. JK Trucking, a partner in the company has been fuelling trucks with a 10 per cent biodiesel blend from Kyoto Fuels’ pilot plant. The truckers have burned more than five million litres and driven more than one million kilometres in all conditions, including two of the coldest winters on record, with no problems. They have 68 trucks running on 10 per cent biodiesel.
Biodiesel reduces life-cycle emissions by 80 per cent compared to petroleum diesel. Altogether Kyoto Fuels cuts annual greenhouse gas emissions by 191,000 tonnes. Not all these reductions are eligible for carbon credits, but pre-selling to a major emitter has provided some funding for plant development.
Prenevost said he doesn’t see using a food crop for fuel as a problem.
“A great amount of diesel is used to produce food,” he said. “And, we don’t have a problem producing feed for the world, the problem is distribution. In the global picture, the biggest food crops are rice, corn and wheat, canola is a small crop.”