No huge surprise here. Canada has the land and the water (30% of the world's fresh water, I believe) to become a biofuel powerhouse, especially if global warming occurs. Could they be the Saudi Arabia of biofuels? Article here.

SASKATOON -- A Minnesota biofuel marketing expert says there may be a glut of ethanol on the market in the United States right now, but that's a temporary situation and Canada needs to ramp up its production of both ethanol and canola-based biodiesel to take advantage of an ever-expanding market.

Jon Bjornstad of Minneapolis gave delegates to a one-day conference and trade show on biofuel production a pep talk, saying Canada has a tremendous potential to gain a market niche in northern tier states because canola-based biodiesel flows better in cold weather than does any biodiesel made from soybeans.

"You guys really have to step it up," Bjornstad told his Saskatchewan audience. "I see tremendous opportunities for your canola. You guys have the best biodiesel that's available in the world.

"I can see the day coming when we're going to have to do canola-soy blends in the States if we're going to be able to use biodiesel in the northern tier states."

While the demand of the food service industry keeps growing for heart-healthy Canadian canola, Saskatchewan Biofuels Development Council president Judie Dyck says she believes Prairie farmers will increase acreage of canola so they can supply both the food and biodiesel markets despite the rising price being paid for canola by food processors.

"The canola industry has set a goal of 14 million metric tonnes by 2015 to satisfy both the fuel and food markets," she said.

"I believe we can satisfy both markets. Yes, prices can be a challenge (for making biodiesel) but we see correspondingly higher prices for petroleum."

On ethanol, Bjornstad notes there is free trade in agricultural products under the North American Free Trade Agreement and that excess Canadian ethanol should find a ready market in the U.S. where demand is forecast to increase more than four-fold to 30 billion US gallons in the next few years.

"Today, we have capacity to make seven billion gallons and we're growing fast," he said.

"You also have demand that's emerging in Canada that you need to service. Unfortunately, your friends in the States are servicing a high percentage of your demand right now in Eastern Canada."

Bjornstad says Canadian companies setting up to build an ethanol facility have to think beyond local markets because Canadian-made ethanol will be subject to the same subsidies that U.S. consumers get at the pump for biofuel.

"I know you folks are working on a province-by-province basis to create a bunch of demand for your processing facilities up here," he said.

"But for a relief valve, we're willing, ready and able to take your product and we're going to see a tremendous growth in the use of renewable fuels in the States."

The short-term glut that exists in the U.S. is partly occurring because there are parts of the U.S., particularly in the southeast from the Carolinas to Florida, where use of renewable fuels has been developing slowly and there are weak links to ship ethanol there, the Minnesotan observed.

As for the fuel versus food debate, Bjornstad says numbers from the U.S. Department of Agriculture on carryover corn and soybean stocks don't support the view that ethanol production is occurring at the expense of the world's food supply.

"In the world as a whole, there are numbers that suggest that using those oils and corn for the production of fuel is not affecting the food environment at all," the U.S. biofuel marketer said.

"We're going to have billions and billions of bushels left over after this (U.S. corn) crop is harvested and we get into next year's crop year."

Lyman Dellinger, a field service manager for CNH in Pennsylvania, says farmers can run most equipment on a 100-per-cent blend should they choose and biodiesel can bring enormous improvements to the operation of older, diesel-powered tractors.

"There is a slightly lower BTU in a gallon of biodiesel as opposed to hydrocarbon diesel, but the only time you would notice it is at full-rated power," he said. "If you're not asking for full-rated power, the effect for the customer is negligible."