Bio-diesel refinery possible

By Collin Gallant on November 2, 2018.

cgallant@medicinehatnews.com @CollinGallant

The potential to build a bio-diesel refinery in Medicine Hat is part of joint-venture discussions made public Thursday between a renewable energy technology firm and an investors group in Grande Prairie.

The final deal between Cielo Waste Solutions Corp. and Renewable U Energy Inc. would initially see Cielo build a facility in the northern city at a cost of $20 million, with an option to investors to build a second, similar plant in the Hat.

A conference call is scheduled for Friday morning to outline the proposed deal, which was made public alongside news Cielo was close to the commissioning of its prototype refinery near High River.

That plant will transform animal fat, specifically beef tallow, into bio-diesel and naphtha, but Cielo states a wide variety of organic waste, crop byproducts or even compostable domestic waste — municipal garbage — can be a feedstock.

“We are nearing the sale of our first renewable fuels,” said Cielo president Don Allan. “In addition, we are thrilled that with the results achieved to date … we have gathered substantial interest from multiple parties for potential joint ventures.”

Local economic development firm Invest Medicine Hat has advertised bio-diesel and naphtha production here as a focus of its business attraction program.

“We’ve had conversations with the group,” Invest General Manager Ryan Jackson confirmed to the News, further stating that joint work to develop a business plan is underway.

Generally the market for bio-diesel is driven by fuel standards. The Alberta government’s mandated Renewable Fuels Standards, in place since 2012, call for two per cent renewable content for diesel sold.

Most of that fuel additive, which is blended in to traditional fuel in summer months, is imported, said Jackson.

“The domestic need and opportunities to support the market are significant,” said Jackson.

According to a press release, Renewable U Energy Inc., a private investment company, will have 180 days to exercise its option to secure the Grande Prairie region for $250,000, then a further 45 days to move on the Medicine Hat project.

Lionel Robins, the CEO of Renewable U, described his company as involved in “philanthropic capitalism” and ready to provide good jobs, economic growth with environmentally sound business ventures.

“We believe that Grande Prairie is quickly becoming recognized as the unofficial ‘epicentre’ of the oil and gas industry in Canada,” said Robins in the joint statement. “Medicine Hat has already proven itself to be one of the most progressive and innovative municipalities in Western Canada.”

Each facility would be capable of producing eight million litres annually.

The investors, Renewable U, are responsible for 100 per cent of the capital costs, while Cielo would lend patented technology to the project and manage the construction for a fee.

Profits would be a 70-30 split until construction costs are recuperated, after which the proceeds would be divided essentially evenly between the parties.

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