July 6, 2005

Canada to boost ethanol seven-fold with new plants

WINNIPEG, Manitoba (Reuters) - Canada will produce enough
ethanol so that a third of the gasoline used in the country can
contain 10 percent of the greenhouse gas-reducing additive by
the end of the decade, the federal government said on

Ottawa announced it will spend another C$46 million ($37
million) to help build five ethanol plants, part of its promise
to cut greenhouse gas emissions under the Kyoto Protocol.

It is the second part of a program that gave C$72 million
to six other plants in February 2004.

The new plants will boost Canada's ethanol production to
about 1.4 billion litres (369.8 million U.S. gallons) of the
fuel additive per year by 2007, up from current levels around
200 million litres, the government said.

Ethanol, made from grain or other plant sources, reduces
greenhouse gas pollutants because the plants absorb carbon
dioxide as they grow.

The new spending includes C$15 million to Commercial
Alcohols Inc., Canada's largest ethanol producer, for a new
plant in Windsor, Ontario, and C$11.9 million to a farmer-owned
project at Brantford, Ontario.

Husky Energy Inc., Canada's fifth-largest oil producer and
refiner, will get C$10.4 million to build a 130 million liter
plant in Minnedosa, Manitoba, where it currently produces 10
million litres per year.

Husky is also building a similar plant at Lloydminster, on
the Alberta-Saskatchewan border.

The government will also give C$7.3 million to Power Stream
Energy Services Inc. in Collingwood, Ontario, to convert a corn
starch plant into an ethanol plant, and C$1.1 million to
Permolex Ltd. to expand a plant in Red Deer, Alberta.

($1=$1.24 Canadian)