Shell scrubs plans for Man. straw ethanol plant

Fuel company Shell Canada "will not pursue" its plans for a straw-based ethanol plant in southern Manitoba.

Monday’s announcement from Shell was its first formal acknowledgement that it in fact had plans for such a project, though company spokesmen had openly confirmed its interest in the region through other media outlets late last year.

Shell’s Calgary-based Canadian arm and Ottawa-based biotech and biofuel firm Iogen Corp. said in a statement Monday they will "refocus (the) strategy and activities" of their joint venture, Iogen Energy Corp.

The refocusing, they said, would mean a "smaller development program" for Iogen Energy and the loss of 150 jobs.

An Iogen spokeswoman said those jobs would be lost in Ottawa, where Iogen operates both its head office and a demonstration-scale cellulosic ethanol facility. However, she would not comment on where specifically the jobs would end within the company.

Shell said in the same statement that it "continues to explore multiple pathways to find a commercial solution for the production of advanced biofuels on an industrial scale."

However, it said, it won’t pursue "the project it has had under development to build a larger-scale cellulosic ethanol facility in southern Manitoba."

Shell spokesman David Williams said Monday that Shell still has the licensing rights to the Iogen technology in question and the two companies’ working relationship would continue.

The companies’ decision, he said, was based strictly on an internal review of Shell’s global portfolio of advanced biofuel projects, not on any availability of federal or provincial support.

"We’re proud of where we’ve got to so far (and) we think this technology is viable," Williams said.

"Very early"

Grand Forks, N.D.-based Ethanol Producer magazine, for one, had quoted another Shell spokesman in December as saying Shell’s first choice for a Manitoba facility was at Portage la Prairie, with an unnamed "alternative site" scouted closer to Winnipeg.

The magazine said Shell had dubbed its plan the Solstice Cellulosic Ethanol project, and that it would use about 350 tonnes of primarily wheat straw per day to produce about 40 million litres of ethanol per year, using Iogen’s technology.

The Shell spokesman was quoted in the article as saying the project’s development was only in its "very, very, very early" stages.

Iogen Corp. said Monday it would "continue to employ approximately 110 people at its Ottawa headquarters" and plans also to expand its own line of technologies for making advanced and cellulosic biofuels.

Iogen said its own industrial enzymes business, which serves customers in the grain processing, animal feed, pulp and paper and textiles industries, "will not be affected by these changes."

Shell’s other "pathways" on advanced biofuels still include a joint venture with Wisconsin-based Virent Energy Systems on a demo-scale plant at Madison, making ethanol using plant sugars from cellulose which could include wheat straw, corn stover and/or sugarcane pulp.

The Wisconsin demo plant, using Virent’s patented catalyst technology, was launched in 2010 using beet sugar.

Related stories:
Shell to pump up Iogen’s straw ethanol work, June 4, 2010
Ethanol maker Iogen to gauge investor interest, Sept. 15, 2010
Straw-based ethanol eyed for Sask. mill site, June 2, 2009

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