On alternative energy....
While ethanol may soon make up 5% of the gas at Ontario's pumps, it certainly isn't matching that in capital investment dollars. Total investment in Canadian ethanol production to date is about $1.2 billion — chump change compared to the $6.2 billion invested in 2004 in Alberta's oilsands, with $2.3 billion more in oilsands development capital projected this year. Recent oilsands projects from the likes of Shell, Chevron or Suncor have already eclipsed cost targets by amounts greater than the capital expenditure costs of all Canada's current ethanol projects. Ethanol producers say production costs are dropping, but at 35¢ to 45¢ per litre, they are still steep compared to Alberta oil, which can cost less than 24¢ per litre to extract and refine. Governments can try to create an ethanol market, but international investors see green only in oil.
After reading the American study, more will be tempted to see ethanol funding as another farm subsidy in disguise. Even with oil on a tear, ethanol producers may encounter more weeds before harvest time.
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