Ethanol industry grows in Saskatchewan despite government
Author:
David Maclean
2004/04/27
Our government is on an amazing losing streak when it comes to their whacky, soviet-style business schemes. The most infamous example is the $28 million dollar failed foray into the potato storage business.
Then of course there was the massive, behind-closed-doors deal with multinational computer conglomerate EDS to centralize and outsource the province's information technology services.
Don't forget Information Services Corporation (ISC) and their disastrously expensive automation of the land titles system. The big idea was to design our own high-tech system and then market our resultant expertise to developing countries around the world.
A Canadian Taxpayers Federation (CTF) freedom of information request revealed $172,000 was spent by ISC bureaucrats travelling to Australia, Hong Kong and Albania. It should come as no surprise that not a single sale was made.
Also recall the glitzy event held in the fall of 2002 announcing a $60 million government investment to establish an ethanol industry in Saskatchewan. Since that announcement, months ticked by without any plant being built. Premier Calvert campaigned on his government's commitment to growing an ethanol industry. Quite predictably, Minister Eric Cline now confirms the government deal with Broe Industries to build the plants is "moribund."
Governments never learn. As the provincial government drops the ball, the feds are there to pick it up. In recent months two new Saskatchewan-based ethanol projects have been announced.
NorAmera BioEnergy Corp. received $3.5 million from the federal government to establish a 25 million litre per year project in Weyburn, and Husky Energy was allotted $7.8 million for a 130 million litre operation in Lloydminster. The two projects are estimated to cost around $115 million.
Either way, not a single penny of taxpayer money should go anywhere near the ethanol industry. If there was a real market for ethanol, the plants would already exist. The operators of the Weyburn project admitted the project could still proceed without tax dollars, but hey, if the feds are handing out free money they'll take it. The only reason the plants are viable without corporate welfare is that the government intervened in the marketplace and mandated ethanol-blended gasoline in the interest of saving the environment.
Their environmental argument doesn't hold much water either. According to Cornell University's Dr. David Pimental "...ethanol production does not enhance energy security, is not a renewable energy source, is not an economical fuel, and does not ensure clean air...its production uses land suitable for crop production and causes environmental degradation."
So what ever happened to the $60 million taxpayer donation to the Saskatchewan Ethanol Industry The province's chosen partner Broe Industries couldn't get a bank to finance the deal and it fell apart. The province spent nearly a million dollars on consultants and advertising and have nothing to show for it.
These are your tax dollars at work.
The lesson for all of us is that the government should get out of the business of being in business. As long as our government continues to pursue misguided but well-intentioned business schemes we'll continue to see more of our tax dollars poured down the drain.