Shell, Iogen scrap plans for Canada biofuel plant

Mon Apr 30, 2012 1:15pm EDT
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By Jeffrey Jones and Rod Nickel

(Reuters) - Royal Dutch Shell Plc and Iogen Corp have scrapped plans for a commercial-scale biofuel plant in Manitoba, spelling the loss of 150 jobs and raising questions about widespread and near-term use of fuel made from agricultural waste in Canada.

The Iogen Energy joint venture had been studying building a plant to make ethanol from straw and other plant waste, rather than from food crops such as corn and sugar. One location discussed was Portage la Prairie, west of Winnipeg, Manitoba.

The proposal had been in planning stages and a spokesman for Shell could not provide an estimated cost.

Shell first invested in Iogen 10 years ago and the partners have operated a demonstration plant in the Ottawa area since 2004.

"We do continue to have a relationship with them and continue to retain the licensing rights to the technology developed," Shell spokesman David Williams said on Monday.

"It's like a lot of things with R&D, you build demonstration plants, you get that far, and you learn from them, and this has been an important source of knowledge."

Iogen will still employ 110 people at its Ottawa headquarters and plans to expand new technology for production of the biofuels made from cellulose, the partners said.

Cellulosic ethanol is made from the non-food portion of crops. Ethanol production from food grains, especially corn, has generated debate about the ethics of diverting food for use in fuel and has been a key reason why U.S. corn stocks are projected to fall to a 16-year low this summer.   Continued...