By Elona Malterre

DRAYTON VALLEY –  Mayor Moe Hamdon, wearing only a dark suit with an open-necked shirt despite the pouring rain, stepped onto the tour bus.
          He wasn't wearing a rain coat, and he didn’t mince words: “There are two drivers for economic development – inspiration and desperation. Drayton Valley was driven by desperation.”
          From the Bio-Mile in Drayton Valley, to Edmonton’s Waste Management Centre coupled with Enerkem’s biofuels plant, to a new biomass district heating plant in Sherwood Park, bio-innovation is taking root in north-central Alberta.
          About 50 delegates from the Canadian BioEnergy Association’s conference, held in Edmonton at the end of April 2012, took a pre-conference tour that highlighted some of the region’s new initiatives in bioenergy and bio-economy.
          In Drayton Valley, Mayor Hamdon showed off the Bio-Mile (http://www.draytonvalley.ca/bio-mile/), about one square mile (2.6 square kilometres) of industrial park. It is designed to provide a home to companies, organizations and research partnerships focused on creating new products from the residues or biomass generated by the area’s forestry and agriculture industries.
          Drayton Valley, population of approximately 7,000 and about 140 kilometres southwest of Edmonton, was faced with the loss of 150 jobs when Weyerhaeuser shut down its oriented strand board (OSB) facility in 2008, Hamdon said.
          “It’s a great little town,” he said, pointing out an oil pump jack in the middle of town.
Despite the strong oil and gas industry presence, people decided it was time to look at diversification.
           The initial feeling of desperation evolved into anticipation, Hamdon said. “As we moved along and looked at the benefits of integrated bio-industrial, there was much more to it,” including synergies with the oil and gas industry.
           Instead of the NIMBY (Not In My Back Yard) syndrome, Drayton Valley is cultivating an “in my back yard attitude." 
           Excitement grew when CLIB2021 (Cluster for Industrial Biotechnology – http://www.clib2021.de/en), a collaboration of several German chemical companies, government and academia, established its North American head office in Drayton Valley.
           CLIB2021 is working with the University of Alberta to determine which products are best suited for production in the Bio-Mile.
           The mantra for Bio-Mile is simple, Hamdon said. “One company’s waste will be another company’s feedstock.” The strategic alliance of companies working in synergy has a goal of zero waste.
           Currently, the Bio-Mile is home to the Weyerhaeuser sawmill and the Valley Power co-generation plant, among other industries. 
           Valley Power, which uses between 420 and 450 tonnes of biomass per day to generate power, gets 95 per cent of its fuel in the form of wood waste from Weyerhaeuser.
           Valley Power sells between 9.5 and 10.5 megawatts (MW) of power which classifies the company as a small power generator. Nonetheless, it can provide enough electricity for 10,000 homes.
           Otoka Energy Inc. (http://otoka.com/), a Minneapolis-based company, is planning to build a new $100-million waste-to-energy plant in the Bio-Mile.
The first phase of the plan is to make 25 MW of power, the second phase is to make syngas, and the third is to make pharmaceuticals. The second and third phases are estimated to cost an additional $140 million.
          In October 2009, the Alberta government announced it would provide a $20 million grant, from Alberta’s share of the Canada ecoTrust for Clean Air and Climate Change, to Otoka Energy for its plant. The project also received $5 million in July 2009 through Alberta’s Biorefining Commercialization and Market Development Program, which is administered by Alberta Energy.
         Otoka’s plan will convert 380,000 tonnes of wood waste into electricity each year. By using a renewable source to produce energy, the project will reduce Alberta’s greenhouse gases by about 400,000 tonnes per year.
         Edmonton-based Tekle Technical Services (TTS – http://www.ttsfpl.net/), which is focused on designing sustainable bio-fibre-based building products, also has a branch plant in Drayton Valley.
         The company is building a 30,000-square-foot facility in the Bio-Mile that will manufacture erosion control mats, home insulation and a product used as a fiberglass replacement in automobiles, according to the Alberta Biomaterials Development Centre (http://www.albertabiomaterials.com/).
         Tamrat Tekle, president of TTS, spoke passionately about the advantages of the company’s off-grid, net-zero energy model home adjacent to the facility.
          The 1,200-square-foot home, complete with skylight, costs about $300,000 to build which includes all electrical outlets, he said. The home can be assembled from contract to completion in about six weeks.
          The home is built from TTS’s patented R-Therm structural insulated panels, a rigid polyurethane foam insulation core fused between two outer structural skins of oriented strand board, plywood or fibre-cement board and drywall.  The panels make an extremely strong construction material that can be used for structural components such as walls, roofs and floors, Tekle explained.
           Tekle showed the tour group various products, including insulation, serving trays and concrete all made from hemp. Hemp insulation has the same insulating factor as fiberglass, is cost-competitive and is resistant to mold, he noted.
           For example, a bridge in France was built of “isochanvre,” a rediscovered French building material made from hemp hurds (cellulose) mixed with lime.
          The product petrifies (turns to stone) and lasts for many centuries. Archeologists have found a bridge from the Merovingian period (500-751 A.D.) in southern France built with this material.
           Tour participants noted that hemp products are being used in car interiors manufactured by BMW and other auto makers. Tekle referred to a truck, parked outside the company’s model home,with a hemp-based canopy which he said was lighter and more durable than canopies from traditional fibres.
           Mayor Hamdon hosted lunch for the tour group at the Drayton Valley town centre, itself a model concept with a school next to a curling arena, a municipal library and a conference venue.
          As tour delegates enjoyed superb shepherd’s pie catered locally, Hamdon proudly told the group that Drayton Valley won the 2012 Sustainable Communities Award, in the “Community Sustainability Plan” category, from the Federation of Canadian Municipalities.
          “Sustainability guides our bylaws,” said Hamdon, who noted that the town’s treated wastewater is used for oil field applications.
          Drayton Valley serves a trading population of more than 30,000 residents with an average age of about 30 to 31 years.
          The town’s plans to diversify its traditional industries had critics, the mayor acknowledged. So town leaders recruited the “most vocal opposition” for its diversification committee, empowering them to help make decisions.
          “Drayton Valley is showing the world the way to the future,” Hamdon said.  

EDMONTON – At the City of Edmonton’s Waste Management Centre of Excellence (http://www.ewmce.com/), tour participants learned about a project to turn municipal waste into biofuels.
          “From the biofuels facility, we hope to produce about 36 million litres of ethanol which will go to the market place,” Jim Schubert, general supervisor for conversion technologies for the City of Edmonton, told the group.

           Montreal-based Enerkem Inc., operating under Enerkem Alberta Biofuels, is building a full-scale, $80-million commercial plant at the Edmonton Waste Management Centre in northeast Edmonton that will turn municipal solid waste into cellulosic ethanol.

           The facility, expected to be operational in early 2013, is designed to use 100,000 tonnes of municipal waste per year, to produce 36 million to 38 million litres annually of ethanol.
          The plant is expected to be the world’s first major collaboration between a metropolitan centre and a waste-to-biofuels producer to turn municipal waste into methanol and ethanol. (See http://envirolinenews.ca/20120409/next-generation-biofuels-must on EnviroLine’s website).
          Tour co-host David Lynch, general manager, R&D for Enerkem, said the company became involved in Edmonton’s waste management solutions because the city’s goals were to:
          •    increase its landfill diversion rate for residential waste to 90 per cent from the current 60 per cent, without going to traditional mass-burn combustion systems; and
          •    establish a responsible and sustainable position with regard to biofuels, waste and the environment.
           Lynch guided the group into a high open building, where workers assembled pipes running to a tank approximately two storeys high.
           In this facility, the company will be able to test forest and agricultural residues to determine the most efficient way of processing these potential feedstocks, and also “get an idea of the economics . . .,” he said. 
           The facility was being commissioned and would be operational in about a week, Lynch added. “This facility will operate at about 300 kilograms (of residues) per hour which is a pretty substantial scale.”
          Edmonton Mayor Stephen Mandel recently returned from China where he promoted the city’s integrated waste management system.
           The Edmonton Waste Management Centre offers “one-stop shopping for waste,” Schubert said.
           The facility, which includes North America’s biggest composter, tracks about 50 types of waste streams – with everything weighed as it comes in and also considered for innovative waste-handling solutions.
           The centre began in the early 2000s when the citizens of Edmonton decided they didn’t want any new landfills built, Schubert said.
           The centre’s Materials Recovery Facility, which processes about 55,000 tonnes per year of mixed materials, separates the refuse from recyclables and other “residuals,” he said. “So basically out of 50,000 tonnes going in, about 10 per cent goes out as residuals and that’s mainly mixed paper (and) plastics.”
            When officials looked at those residuals, they didn’t have much further value as recyclable materials, “but (they) had a lot of thermal value,” Schubert said. “And that’s when we started looking at another project to increase our (landfill) diversion rate.” 
           The city is currently diverting about 60 per cent of its waste from the existing Clover Bar Landfill, which reached capacity after 34 years and stopped taking garbage in August 2009.
           Until Enerkem’s biofuels production facility becomes operational, any waste that can’t be diverted is taken to landfills in west Edmonton or to Ryley, about 85 kilometres southeast of Edmonton.
           At the Edmonton Waste Management Centre, which handles about 280,000 tonnes of waste per year, about 55,000 tonnes goes directly to the Materials Recovery Facility to recover recyclables, Schubert said.
          About 220,000 tonnes goes to the Integrated Processing and Transfer Facility; about 85,000 tonnes of that will go to Enerkem’s new biofuels facility.
         The remaining 135,000 tonnes will go to the Composting Facility, which produces about 55,000 to 60,000 tonnes of compost per year.
          About 12,000 school children visit the Edmonton Waste Management Centre each year, because waste management is part of the Grade Four curriculum, Schubert told the tour group.
          “I’ve always considered myself like a ‘closet’ environmentalist,” he said. “And this is an environmental project.”


SHERWOOD PARK – In this urban hamlet adjacent to Edmonton, Harry Welling, ex-lawyer and ex-rock star, has turned his multi-talented passions to recycling agricultural waste.
          “There is no second system like this in Canada,” Welling said as he led a tour of the Community Energy Centre in Sherwood Park’s Centre in the Park, a sustainable, multi-use district that combines municipal services, local government, residences, retail services and inviting public spaces.
          “This is my baby and I love this,” Welling said as he showed off a large brown biomass container that resembled a commercial waste disposal unit.
          Welling is the managing director of Kalwa Biogenics Inc. (http://kalwabiogenics.com/), which plans to utilize the biomass for the community district heating system.
          The heart of the biomass unit is a combustor, a custom-designed unit made in Germany. It can electronically sense the composition and moisture content of the fuel being provided, and automatically adjust to optimize combustion.
          Most off-the-shelf combustors are built to use wood chips with a maximum moisture content of 40 per cent, although the ‘comfort zone’ is closer to 30 per cent, Welling explained.
          His custom combustor is manufactured by Lambion Energy Solutions (http://www.lambion.de/), which has been in operation for over 100 years.
          Sherwood Park’s Community Energy Centre is a nine-megawatt facility that currently uses natural gas to heat hot water which is then piped through six municipal buildings (including a pool and an arena) and three private condominiums.

      Graphic of Sherwood Park's Community Energy Centre

           The hot water system is perfectly suited to the busy daytime use of the municipal buildings and the high nighttime use of the condos, Welling said.
          The biomass component of the energy centre will replace the natural gas fuel and provide base load power of about six megawatts in winter, he said.
          The control room for the 1.6-kilometre network of 20-centimetre pipe glows with red and blue lights – red for hot water pipes, blue for cold. The room also holds several agricultural residue samples in the form of pellets of various sizes and composition.
          Fuel for the biomass system can be either various-sized pellets or put through as much smaller ‘fines.’ Testing continues, with Alberta Agriculture providing various sizes and forms of fuel.
          The biomass system is designed to demonstrate both agricultural and wood residues, Welling noted.
Some of the wood chips measure about six to 12 square centimetres. All are processed near the source of the fuel, away from the facility, although fuel containers are located right outside the combustor unit.
          “They’re not silos as you often see in biomass energy systems. We didn’t go with bunkers either,”  Welling said, pointing to some houses behind trees lining the property. “The handling of biomass on this site at any time of day or night would simply be a . . . “very, very noisy process.”
          The fuel containers, also made in Germany, are of a standard size that can be transported with BFI-type trucks, with empty containers simply replaced with full ones.
          Sherwood Park’s Community Energy Centre biomass system is scheduled to be commissioned in June 2012 – another indication that Alberta bio-innovation is fueling the future. EnviroLine

PHOTO OF Nigel Brandon:  Courtesy Shay Dodds.

STORY BY Mark Lowey      Fuel cells have reached the stage where the technology is poised to transform the electric utility industry, experts said at a Calgary symposium on solid oxide fuel cells.
          But fuel cells will have to compete with the “revolution” in natural gas from shale deposits and with new technologies now extracting oil from previously uneconomical reservoirs, energy experts told the SOFC-Industry Day symposium.
          The event, sponsored by the NSERC Solid Oxide Fuel Cells Canada Strategic Network and Carbon Management Canada, and held April 24, 2012 at the Calgary Petroleum Club, focused on potential fuel cells applications for the oil and gas industry.
          “It’s the most exciting time I’ve seen” for the fuel cells industry, said Nigel Brandon, director of the Energy Futures Laboratory and chair of sustainable development in energy at Imperial College, London.
           The Japanese are now using thousands of fuel cell systems to power and heat their homes, while patents on fuel cells technology represent the highest level of patent activity in the U.S. for any new energy technology, Brandon said.
           “We’re at a fundamentally different point with the development of (fuel cells) technology” compared with 20 years ago, Terry Tyler, executive vice-president, chief technology officer and chief information officer at ENMAX Corporation in Calgary, told the symposium.
           Fuel cells and other new power-generation and distribution technologies are about to transform the electric utility industry – something that hasn’t happened for 100 years, he said.
           While residential fuel cell systems are not yet at the price-point for ENMAX to deploy the technology, fuel cells are now competitive with nuclear power or with coal-fired power coupled with carbon capture and storage, Tyler said.
           A fuel cell converts fuel and air through an electrochemical reaction into electricity and heat.

           Fuel cells emit no greenhouse gases and extremely low levels of nitrogen oxides and particulates, and produce carbon dioxide and heat, Brandon noted. The relatively pure stream of CO2 can be sold for industrial use while the heat can be used to make steam.
           Solid oxide fuel cells (SOFCs) are able to operate on hydrocarbon fuels (including natural gas) at high efficiencies, ranging from 40 per cent for kilowatt-scale, stand-alone units to 70 per cent for megawatt-scale, hybrid fuel cell-gas turbines, he said.
           SOFCs can also be run in reverse, combining CO2 with water to produce high-quality synthetic gas.
Applications for SOFCs include distributed power generation, co-generation of heat and power, and off-grid power, Brandon said.
           “Micro-CHP” fuel cell systems can generate both electricity and heat for homes at about 25-per-cent greater efficiency than conventional technologies, he said.
           The Japanese have installed 18,000 Ene-Farm PEM (proton exchange membrane) fuel cell systems that deliver 0.7 kilowatts to one kilowatt of power, which is sufficient to meet about 70 per cent of a household’s energy needs (see http://www.fuelcelltoday.com/analysis/analyst-views/2012/12-02-29-ene-farm-update). Canadian homes require about two kilowatts of energy for power and heating.
           The Japanese systems, which are connected to the electrical grid, have 15,000 hours of demonstrated operation and are sold with a 10-year guarantee, Brandon said. The cost is about $30,000 per system; $10,000 of that is subsidized by government.
           Brandon said he expects that Japan will increasingly turn to hybrid natural gas- fuel cell technologies, especially if the country turns away from nuclear power in light of the Fukushima nuclear accident.
           U.K.-based CeresPower (http://www.cerespower.com/) is currently testing five micro-CHP fuel cell units in homes in the U.K., Brandon said.
           In the U.S., California-based Bloom Energy (http://www.bloomenergy.com/) makes 200-kW and 100-kW SOFC systems for distributed generation, and now has more than 250 of its 100-kW units installed across the U.S.
           The number of fuel cell-related patents in the U.S. increased 57 per cent in 2010, and in 2011 there were more than 1,000 patents – the highest level of patent activity in the country for any new energy technology, Brandon noted.
            Wärtsilä Corporation (http://www.wartsila.com/en/Home) in Finland has installed its 20-kW SOFC unit, which operates on methanol, on ships.
            Brandon said that in the oil and gas industry, fuel cells could be used to produce the heat and power required for in situ oilsands operations while also reducing their greenhouse gas emissions, and for off- grid applications in remote locations.
            Asked whether fuel cell technology could operate reliably in Alberta’s winter climate, Brandon replied: “I don’t see any reason why these devices can’t operate at low temperatures.”
            Brian Borglum, vice-president and chief technology officer at Versa Power Systems (http://www.versa-power.com/) told the symposium that his company, headquartered in Colorado, now has about 40 employees making SOFC systems at its manufacturing plant in Calgary.
           Versa Power’s SOFC cell is a high-operating temperature device, fueled by pipeline-quality natural gas, which measures about 25 centimetres by 25 centimetres. Individual cells are stacked to create systems with the desired power capacity.
            “There is definitely world-wide interest” in Versa Power’s fuel cells technology, Borglum said, adding that the company has been able to scale up its fuel cell system thanks to major support from the U.S. Department of Energy.
             Versa Power also is working with The Boeing Company in the U.S. on a project that involves using fuel cells to develop and fly a very long-endurance unmanned aircraft. The technology would enable an aircraft to remain at stratospheric altitudes for at least five years, doing aerial surveillance and reconnaissance missions.
            Versa Power is currently operating a 10-kW, natural gas-fueled SOFC demonstration unit at the VTT Technical Research Centre of Finland. “So far, it (the unit) looks good,” Borglum said.
            The company, which also has built and shipped a 50-kW unit for Wärtsilä Corp., has an agreement with the Finnish company to develop and integrate Versa Power’s SOFC technology into Wärtsilä products.
            The 50-kW test unit needs to be successfully operated for at least a year; next-generation demonstration units need to last two years and the commercial version at least five years, Borglum said. If all goes well with the initial test unit, in two years, tens of the demonstrations units would be deployed in projects around the world, he added.
            Viola Birss, scientific co-director of the NSERC Solid Oxide Fuel Cells Canada Strategic Network and a fuel cells researcher at the University of Calgary, told the symposium that the network has made progress on its main goals.
            These goals are: enhance SOFCs’ fuel flexibility, lower costs, and improve durability over the operating lifetime.
            The network has developed very good diesel fuel “reformer” technology for fuel cells, which will have applications beyond SOFCs, Birss said.
           Network researchers also have developed enhanced petroleum coke/sulphur-tolerant anodes, so SOFCs could operate on ‘sour’ natural gas containing sulphur. Also developed is a high-temperature plasma spray that enables faster and more efficient manufacture of SOFCs.
           Birss said that new research directions include:
               •    interfacing SOFCs with CO2 capture and storage, utilizing novel porous nano-solids materials;
               •    producing a “clean” CO2 stream from SOFCs for geological storage;
               •    integrating renewables and SOFC power (for example, SOFCs could be used to covert solar and wind energy to stored energy that could be tapped when needed); and
               •    developing an SOFC-based “zero-emissions” natural gas-fueled power system coupled with carbon capture and storage (CCS).
          Also in the development stage is a CCS monitoring and training site in Alberta that would have an onsite SOFC system providing power and carbon dioxide. The CO2 would be injected underground at relatively shallow depths to test monitoring equipment for detecting CO2 at low levels.
          In the oil and gas industry, it should be theoretically possible to use SOFCs installed below the surface to produce high-quality steam required to extract in situ oilsands and heavy oil, Birss said.
          ENMAX’s Terry Tyler told symposium participants that he believes fuel cells will “fuel” the transformation of the electricity business.
           For residential applications, micro-CHP fuel cell systems are in direct competition with natural gas-fuelled distributed energy systems, he said.
           However, the efficiency of gas-fired, combined-cycle systems declines after five years and there are substantial maintenance costs to keep such systems operating efficiently, he said. It is important to always account for the “total, all-in costs” when comparing various energy systems, he added.
           SOFCs have the potential to generate clean water as well as high-quality steam, which would make them attractive for applications where water is in short supply, Tyler said.
          But if micro-CHP fuel cell systems are to be widely deployed, there needs to be a “fundamental change” in existing laws and policies governing electric system infrastructure, he noted.
          The current situation is that whenever the infrastructure provider (for example, to a new community) crosses a road, that provider owns the right to provide the infrastructure, he explained. That makes it impossible to deploy an ‘independent,’ self-contained CHP system or micro-grid within such a community.
          Michal Moore, energy economist with the School of Public Policy and the Institute for Sustainable Energy, Environment and Economy at the University of Calgary, told the symposium that he doesn’t think SOFCs will ever be the single energy source for society.
           However, fuel cell systems can be a “dominant bridge to the future” of energy systems, which will include new-generation nuclear power and highly efficient renewables, he said.
           But Moore said that he is concerned that cheap, abundant, widely available natural gas – which he called a “Gasworld” – amounts to “a revolution” with the potential to turn the global energy system upside down and render useless existing capital investment and facilities.
          He advised the fuel cells industry to look for opportunities to collaborate with other energy players, especially to “twin” fuel cell systems with other technologies.
          SOFCs are “financeable,” Moore said, adding they have potential applications in distributed generation and in energy storage through tapping SOFCs’ reverse operation.
          Fuel cells also have potential wherever heat is needed or in industrial chillers or where water availability is an issue, he said.
          SOFCs should find a market on sea-going cargo ships and in goods-delivery trucks that might operate on a hybrid natural gas-fuel cell engine, he added.
          The fastest-growing use of energy is in the transportation sector, where most greenhouse gas emissions are produced by road-based transport. There are one billion road-transport vehicles in the world, with 1.6 billion predicted by 2030.
          Fuel cell technologies also could help electrify villages in remote, off-grid, poorer areas of the world, Moore said.
          In the oil and gas industry, he expects that over the long term, fuel cell systems will be used, in conjunction with combined-cycle gas-fired turbines, to supplement heat and power to in situ oilsands operations.
          Symposium participants identified other potential oil and gas industry applications for fuel cell systems, including providing power and/or heat for multiple wellsites, distributed energy systems, offshore drilling platforms, LNG ports and tankers, remote work camps, and carbon capture and storage operations.
          However, participants also identified several barriers to deploying fuel cell technologies in the oil and gas industry, including:
               •    still too high a price point for fuel cell systems;
               •    the lack of a rigorous, independent, systems-level study on the benefits and disadvantages;
               •    the lack of a joint demonstration project with industry, at the scale (e.g. 250 megawatts for a distributed energy system) required by the oil and gas industry;
               •    the “reliability trumps (energy) efficiency” approach of the oil and gas industry.
As one participant noted: “It’s incredibly difficult to sell ‘up’ the fuel cell vision.”
          SOFC-Industry Day participants also discussed the future of the NSERC SOFC Solid Oxide Fuel Cells Network, whose NSERC funding will end in 2013. The network includes more than 20 research groups from universities and governments partnered with Canadian industries.
          One option is to seek a renewal of NSERC funding, while another option is to proceed with a joint demonstration project in the field with the oil and gas industry, Birss said.
          Even if the network doesn’t continue in its present form beyond 2013, participants agreed that the effort will continue to widely deploy SOFCs and other fuel cell technologies and ensure they are a vital component of the world’s energy future. EnviroLine
  

VANCOUVER – Banks are increasingly incorporating social and environmental factors in screening business clients and making decisions on investments, financial experts told the GLOBE 2012 business and environment conference.
           Vancity Capital Corporation, for example, has created a new model to finance local, community-focused projects that the big banks won’t take on, Andy Broderick, vice-president of community investment for Vancity, told a GLOBE session titled “Environmental & Social Risk Management: What Your Bank Wants to Know.”
           “Rather than trying to struggle with Goldman Sachs, we’re trying to work with people who have capital (and) people who live in communities, and try and figure out a different model that will actually work,” he said.
           Vancity started in 1946 as an institution to help 14 families that couldn’t get financing from the big banks to buy property east of Main Street in Vancouver, and “has been there ever since,” Broderick said. “We’re about our members and getting capital into sectors where it can’t usually go.”
          With more than $16.1 billion in assets, Vancity is now Canada’s largest credit union with 479,500 members. Its clients in British Columbia include businesses, not-for-profit organizations, social enterprises, labour unions, First Nation governments and co-operatives.
          Session moderator Toby Heaps, co-founder and president of Corporate Knights Inc., said Vancity is known as “the little bank that could.”
          Now, in some places in Vancouver, Vancity “is bigger than the big five (banks in Canada) and doing a ton of really innovative stuff that will percolate all through the system,” Heaps said.
          Vancity Capital specializes in providing growth capital such as subordinated debt, mezzanine financing, stretch debt and project financing to small and medium-sized businesses and social enterprises based in B.C.
          “Capital is like oxygen,” Heaps noted, adding that lack of capital can suffocate projects while sufficient capital brings solutions to the major challenges facing the world’s population.
          Broderick said that Vancity is bucking the trend of increasingly international flow of capital by keeping investment local and “working in communities . . . bringing resources and assets that solve problems at a local level.”
         “In this case it’s capital. And it’s working within the community from a deeply embedded place,” he added.
          Vancity finances such include endeavours as Save On Meats (an iconic butcher shop and diner with a 55-year history in Vancouver) and run-of-river power projects, as well as a wellness centre in Victoria – all of which had difficulty finding traditional financing. 
          “We spend a lot of time trying to figure out how to identify the value that makes the kind of investments . . . not risky (and) I don’t think they are risky,” Broderick said.
          The tools that Vancity uses to understand risk include evaluating a client’s total environmental, social, and governance performance. These tools either don’t exist in conventional financial institutions or they’re just “beginning to grow,” he said.
          Heaps introduced panelist Sandra Odendahl, director of corporate environmental affairs at the Royal Bank of Canada, as “the crown jewel” of environmental banking officials.
          Of Canada’s five big banks, the Royal Bank “is probably the most serious about integrating sustainability into their core practices,” so the bank is at a different point in evolving a new financial template than other financial institutions, Heaps added.
          Odendahl described herself as an engineer “who works in the bank and who tries to get the bank to do good things for the environment.”
          The Royal Bank, which operates mainly in OECD countries and the developed world, has specific criteria in deciding whether to invest in a project, she said. “One of the most important things we do is look at the quality of environmental management (including environmental policies) and social management systems.”
          The bank also looks at a company’s track record, its ability to manage risk and what third parties are saying about the business, Odendahl added.
           Another important investment evaluation criterion for the Royal Bank is the ability of a company to deal with new or emerging legislation.
           This legislation may be related to climate change, “but actually in many cases it’s not climate change . . . that poses a significant risk,” Odendahl noted.
          “It may be new land reclamation rules that may be coming down the pipe, or limitations on water permits, or all sorts of things. We actually cast a wider net and look to see that the company has the ability to track and respond (to) what changes in legislation are coming.”
          Heaps, in introducing Arnaud Cohen Stuart, manager of business ethics at ING Group in the Netherlands, told GLOBE delegates that ING has earned a reputation of being a real best-practice example with lots of examples.
          Stuart said that in evaluating potential investments, ING tries to screen for human rights, environmental and biodiversity issues, while excluding things “like controversial defense (items), nuclear arms . . ..”
          ING is a mainstream bank engaged in all sectors of the economy, he added, “(But) we don’t finance companies engaged in illegal forestry (or) fur trading. We’ve got a whole bunch of activities that we won’t finance.”
          Screening becomes most difficult when a project is in a far-off country and affects indigenous or protected areas, Stuart said. “If the project affects indigenous communities, it becomes already really hard to come up to a compliance level that we need to be able to finance the company.”
          Stuart was asked about a controversial ING investment in the past, in a company that produced cluster munitions.
          He responded that in the past, ING in analyzing financial risk looked only at “the
producer and the receiver, and we didn’t screen on cluster munitions as such.”
          Then in 2005, a Belgium-based non-governmental organization confronted ING at its annual meeting about its investment in Singapore in a company producing cluster munitions.
          Many ING officials at the meeting “didn’t even know about (the investment),” Stuart said, pointing out that the bank has assets of $1,200 billion and invests in “millions of companies around the world . . ..” 
          “You can’t pre-think of everything that’s going to happen, but you . . . have to listen carefully and be willing to change.  . . . and that’s exactly what happened” when ING ended its investment in the cluster munitions manufacturer, Stuart said.     
           In April 2012, four of the U.K.’s biggest banks and insurance companies blacklisted a dozen companies that manufacture cluster bombs and landmines, including two of the world’s largest defence firms. (See http://www.guardian.co.uk/business/2012/apr/09/uk-banks-blacklist-cluster-bomb-manufacturers).
           For more on this issue, see IKV Pax Christi and Netwerk Vlaanderen’s 2009 report, “Worldwide investments in cluster munitions: a shared responsibility” (http://www.banktrack.org/download/worldwide_investments_in_cluster_munitions_a_shared_responsibility/091021_cluster_munitions_report.pdf).
          Panelist Paul Clements-Hunt, founder of The Blended Capital Group in Switzerland, told GLOBE delegates that of the seven billion people on the planet, when it comes to quality of life, only one billion people do well while 800,000 do “okay.”
          Capitalism and the free market economy function as a “powerful engine to deliver benefits to people. But the system’s broken,” he said.
          The global economic system will collapse if markets don’t change to allow capital at scale to flow to the other five billion people who face “some fundamental issues (such as) water, sanitation, education (and) health,” Clements-Hunt warned.
          The current system “is not configured to allow honesty” around financial decisions, such as providing $500 billion in subsidies for development of fossil fuels, he said. “That’s not (criticizing) anyone, that’s 200 years of capitalism.”
           However, unless world financial markets evolve to include “the impact of externalities” such as environmental and social conditions and long-term sustainability, then we’re akin to, “at the moment . . . flying an A380 (airliner) with no wiring . . . We’re flying with mechanicals and we’re out of control,” Clements-Hunt said. EnviroLine

VANCOUVER – British Columbia and Quebec will continue pushing to significantly reduce greenhouse gas emissions, despite the federal government pulling Canada out of the international Kyoto accord, provincial ministers told the GLOBE 2012 business and environment conference.
          Regulatory officials from California and the U.S. Environmental Protection Agency also vow to continue efforts to reduce emissions, even while acknowledging that Washington D.C. is ‘gridlocked’ on the climate change issue.
          B.C. will remain a leader on “climate action,” Terry Lake, the province’s environment minister, told a GLOBE session on “Carbon Frustration: What’s Next for Climate Policy.”
          The province’s “revenue neutral” carbon tax will increase as scheduled on July 1, 2012, to $30 per tonne of greenhouse gases (GHGs) emitted, he said.
          The tax will provide more $1.2 billion in 2013 to the provincial government, 100 per cent of which will be returned back to the economy in the form of tax reductions to taxpayers, Lake said.
          For the 2011-12 fiscal year, these tax cuts are expected to return $191 million more to taxpayers than the amount of carbon tax paid, according to the B.C. Ministry of Finance website. (See http://www.fin.gov.bc.ca/tbs/tp/climate/A2.htm).
          An independent study shows the carbon tax alone – without any additional measures – could cause a reduction in B.C.’s GHGs in 2020 by up to three million tonnes of CO2e annually, the government says. This is roughly the equivalent to the GHGs emitted by 787,000 cars per year.
          However, B.C. Finance Minister Kevin Falcon has promised a review, with public input,  of the carbon tax. The review will look at all aspects, from the tax’s revenue neutrality to its impact on the competitiveness of B.C. industries, including the agriculture and food sector which has complained that the tax puts the sector at a disadvantage.
           Lake told GLOBE delegates that all B.C. government operations now have a “zero carbon footprint.”
          The province also requires all new electricity-generating facilities constructed in B.C. to achieve “zero net” GHGs. By 2016, existing thermal generating power plants also must achieve zero net GHGs.
          B.C. also plans to reduce new electricity demand by at least 50 per cent by 2020 through energy conservation measures.
          The Western Climate Initiative (WCI), which includes B.C., Manitoba, Ontario, Quebec and California, is working on a regional GHG cap-and-trade system, James Goldstene, the WCI’s co-chair and executive officer of the California Air Resources Board, told GLOBE delegates.
          The WCI says it “has developed a comprehensive initiative to reduce regional GHG emissions to 15 per cent below 2005 levels by 2020, and spur investment in and development of clean-energy technologies, create ‘green’ jobs and protect public health. (See http://www.westernclimateinitiative.org/index.php).
          The WCI’s cap-and-trade program is scheduled to begin in January 2012, with a three-year compliance period, and initially involve about two-thirds of total emissions in the WCI jurisdictions. When the program is fully implemented in 2015, it will cover nearly 90 per cent of GHG emissions in WCI states and provinces. (See http://www.westernclimateinitiative.org/the-wci-cap-and-trade-program).
           Pierre Arcand, the Quebec government’s minister of Sustainable Development, Environment and Parks, told GLOBE delegates that his province is on target is to reduce GHG emissions by 20 per cent below 1990 levels by 2020.
           That is much more ambitious than the Harper government’s target to reduce Canada’s GHGs by 17 per cent below 2005 levels by 2020.
           The leaders in taking action on climate change aren’t the national governments, Arcand said, adding it was “very frustrating” that the federal government last year officially withdrew Canada from the Kyoto accord.
           Panelist Henry Derwent, president and CEO of the International Emissions Trading Association based in Switzerland, noted that some scientists are now worried about a 4-degree C increase in average global temperature by the middle of this century.
           If that happens, some businesses are saying that they won’t have a business anymore, he said.
           Despite the risks, “you can’t even mention the phrase ‘cap-and-trade’” in Washington, D.C., where climate change action is stalled at the federal level, Derwent said.
           In contrast, the Chinese are moving quickly to implement emissions trading to meet their country’s pledge to reduce emissions, he said.
           The Asian Development Bank has helped set up a pilot emissions-trading system in China that could pave the way for a national effort to lower GHG emissions, according to a news report by Enterprise Innovation. (See http://www.enterpriseinnovation.net/content/adb-sets-carbon-emissions-trading-system-china).
           Internationally, however, China recently banned its airlines from paying a charge on carbon dioxide emissions imposed by the European Union, without permission from the Chinese government. (See http://www.ens-newswire.com/ens/feb2012/2012-02-06-01.html).
           Gina McCarthy, assistant administrator in the U.S. Environmental Protection Agency’s (EPA) Office of Air and Radiation, told the GLOBE session that President Barack Obama and the U.S. federal government executive branch are trying to move forward with reducing GHG emissions in the nation.
           However, it is typical in the U.S. that such actions are first taken at the grassroots level, which then drives states, followed by regions, and then the federal government, she said.
           Carbon is now categorized as a pollutant under the U.S. Clean Air Act, which means the EPA can now regulate GHG emission reductions, McCarthy said.
           The EPA has a new Greenhouse Gas Reporting Program (http://www.epa.gov/climatechange/emissions/ghgrulemaking.html) and will soon have a new carbon pollution standard (http://www.epa.gov/airquality/cps/settlement.html) for new power plants, she added.
           Climate change is unlike any other issue society has faced, because taking action amounts to a challenge to being able to grow national economies based on the continued use of fossil fuels, McCarthy said.
           Instead of complaining about inaction, “Stop global warming and do it by stopping global whining,” McCarthy said.
           GLOBE delegates in their questions to the panel raised concerns about the “fractured” policy approach to reducing GHG emissions.
          A Taiwanese delegate questioned how rigorous the auditing of emissions reductions is on a national level; he pointed out the lack of penalties for poor or outright fraudulent auditing.
          Derwent responded that there are a lot of different metrics currently being used by various countries to measure their emissions reductions, and these metrics need to be harmonized.
          But in the absence of a global system, arriving at an internationally agreed way of measuring, reporting and auditing GHG reductions might take a World Trade Organization dispute to sort out, Derwent said.
          Meanwhile, the financial damage due to several weather events around the world is increasing, GLOBE delegates heard at a separate session on “Climate Adaptation: Building Resilience Through Risk Management & Insurance.”
         Convective storms are now the most common cause of property damage, Robert Wesseling, executive vice-president and chief operating officer of The Sovereign General Insurance Company in Canada, told the session.
         That causes volatility in the insurance industry and results in higher premiums for consumers, he said.
          Noting that flood insurance for homeowners is not available in Canada (the only G8 country where it is not), Wesseling said that the insurance industry needs to find ways to provide adequate insurance for severe weather events.
          But society also needs to invest in technologies that produce houses and other buildings that can withstand such storms, Wesseling added.
          Mark Way, head of Sustainability Americas for global reinsurer Swiss Re North America in the U.S., told GLOBE delegates that the developing world is the most exposed to the risks of climate change-related damage, with some 3.4 billion people exposed to potential severe weather events.
          Yet there is not nearly as much insurance “penetration” in the developing world, compared with developed nations, to cover those risks, he said. Public-private partnerships are needed to provide adequate insurance coverage to the developing world, he added.
          If your business is insured, it gives you a better credit rating because you have the financial wherewithal to replace your business if it’s destroyed by severe weather, Way noted.
          Panelist Jeff Williams, director of climate consulting for Entergy Corporation in the U.S., said that many in the energy industry is increasingly viewing the risks of climate change through the “lens” of catastrophic storms, such as hurricanes Katrina and Rita in 2005.
          Entergy, an integrated energy company, owns and operates power plants with approximately 30,000 megawatts of generating capacity. The company is the second-largest nuclear generator in the U.S.
          Hurricane Katrina is the costliest natural disaster, as well as the one of the five deadliest hurricanes, in U.S. history. Property damage was estimated at US$81 billion (2005 US dollars).
          Hurricane Rita caused an estimated US$12 billion in damage on the U.S. Gulf Coast, through which more than half the energy supply in the U.S. moves.
          The risk is growing of severe storms that can cause US$150 billion in damage, Williams said, adding: “The good news is that a lot of these risks are solvable” by taking actions such as building more resilient communities.
          Entergy doesn’t ask its customers to “believe in climate change,” but rather to approach the issue as a “risk management problem” by asking themselves how they would fare in a devastating weather event, Williams said.
          Sarah Potts, Los Angeles City director of the Clinton Climate Initiative/C40 Cities Leadership Group, told the GLOBE session that Los Angeles is “already impacted by climate change” and is having to adapt.
          The city has started a study on expected sea level rise and due to climate change and the potential impacts, she said, noting that Californians already experience coastal roads washing out and huge fires in the state.
          Panelists said that the challenge for the insurance industry is to be able to better link the modelling of insurance losses to climate change models, to identify cost-effective, risk-reducing measures that can be taken now based on the likely scenarios and risks. EnviroLine

Story By Elona Malterre

VANCOUVER – British Columbia and three Pacific Coast states in the U.S. are counting on clean energy, clean technology and a ‘green’ economy to grow prosperity and jobs, political leaders told GLOBE 2012’s opening plenary.

          However, increasing global demand for energy will also drive continued fossil energy development including Alberta’s oilsands, which provides huge economic benefits, a petroleum industry leader told the plenary.

          Clean technology “is a crucial, strategic export for us,” B.C. Premier Christie Clark told hundreds of GLOBE delegates.

          The provincial government will soon release its clean technology sector strategy that will provide the vision to foster innovation in B.C. and ensure that it “is the best place in Canada to be researching . . . piloting and . . . commercializing clean technologies,” Clark said.

          The clean tech sector has the potential to create “86,000 new jobs here in British Columbia by 2020,” she added.

          Clean tech is one of seven key sectors that B.C., along with Washington, Oregon and California which have formed the Pacific Coast Collaborative (http://www.pacificcoastcollaborative.org/Pages/Welcome.aspx), have identified as a significant economic driver for the region. Clark becomes chair in 2012 of the recently formed alliance.

          The Pacific Coast region’s $47-billion clean economy sector could triple in size by 2020, given the right policies and partnerships, according to a report, West Coast Clean Economy: Opportunities for Investment & Accelerated Job Creation, commissioned by the collaborative. (For the full report, see: http://www.pacificcoastcollaborative.org/Documents/Reports%20and%20Action%20Items/WCCE_Report_WEB_FINAL.pdf).

          The collaborative aims to create up to one million jobs in the next decade, through its 2012 Action Plan on Jobs. (See http://www.pacificcoastcollaborative.org/Documents/Reports%20and%20Action%20Items/WestCoast_ActionPlanonJobs_MOU_WEB.pdf).

          The plan outlines a series of “measurable commitments” by each jurisdiction for retrofitting state-owned buildings, fleet purchasing of advanced technology vehicles, and creating world-class energy standards to incentivize private sector leadership and advanced manufacturing.

          “Asian nations . . . want to ensure that their huge economic growth is supported by environmentally sustainable practices,” Clark told the GLOBE audience.

          “That’s one reason why a central part of our jobs plan is implementing policies that support clean tech, and it hopefully will give B.C. an advantage in growing our clean tech sector.”

          The B.C. government presented its jobs plan in 2011, in a report called Canada Starts Here: The BC Jobs Plan (http://www.bcjobsplan.ca/wp-content/uploads/2011/11/CSH_BCJobsPlan_web.pdf), because it realized that the province’s economy is inextricably linked to what is happening in Asia, Clark noted.

          According to a news report published on the GreenBiz.com website, a higher percentage of young Chinese want companies to reduce carbon emissions compared with U.S. and U.K. residents of similar age.

          In a survey by Carbon Trust of 2,800 young people across six countries, 88 per cent of 18- to 25-year-old Chinese said they want companies to cut carbon emissions, with 83 per cent saying they’d be more loyal to firms that do.

          In comparison, only two-thirds of young Americans and U.K. citizens said they wanted companies to cut carbon, with just 57 per cent (U.S.) and 55 per cent (U.K.) saying they’d be more loyal to firms that do. (See http://www.greenbiz.com/blog/2012/04/03/young-people-china-want-greener-products).

          Clark pointed to a couple of B.C. clean tech companies as emerging stars in the green economy, including Endurance Wind Power (http://www.endurancewindpower.com/), a wind turbine manufacturer headquartered in Surrey, B.C. During the last four years, the company has gone from zero employees to 90, and its revenues have grown from $3 million to $25 million, she said.

          Many companies have discovered that B.C.’s “30-per-cent tax credit and the clean tech-friendly market, in addition to our environmental policies, make B.C. a great place” to do business, she added.

          “We are a role model for the world,” Clark said, noting that B.C.’s three planned liquefied natural gas terminals on the West Coast “will be the first in the world that are principally powered by renewables.”

          Washington Gov. Chris Gregoire, current chair of the Pacific Coast Collaborative, told GLOBE delegates that the group collectively forms the sixth-largest economy in the world. Gregoire acknowledged that while it’s a big challenge to create a new energy future in current economic conditions, “Those who, despite these tough times, see a good economic future that is a clean energy future are the ones who will prosper.”

          The green economy is not just about a clean and healthy environment for the Pacific Coast region and for this generation, it’s about sustaining the “next generation . . . and the generation after that,” she said.

          In 2007, Gregoire added, there was “very high skepticism” when she set a goal to have 25,000 green jobs by 2020 in Washington State. “Well, today we have 100,000 green jobs in my state – it 10 years ahead of schedule, and we have quadrupled our goal.”

          Steve Williams, president and chief operating officer of Suncor Energy Inc., told the GLOBE plenary that there is a continued need for collaboration among all sectors to address the challenges of shrinking natural resources.

          The environment and the economy are not mutually exclusive, but in practice are in fact mutually supportive, he said.

          “Every emission we can eliminate, every time we reduce water use, every time we minimize land disturbance, we ultimately add some monetary value as well as social and environmental value,” Williams said.

          Suncor, which has committed $750 million to renewable energy development, has been a leader in the ‘triple bottom line’ – the economy, social issues and the environment – for nearly a decade, long “before it became the popular thing to do,” he said.

          In the oilsands industry, greenhouse gas emissions intensity per barrel of oil produced has dropped by 40 per cent while “absolute water use is down 30 per cent,” despite production levels now three times higher than they were in 1988, he noted.

          The carbon gap between conventional oil and oilsands-derived oil, in terms of emissions intensity, has narrowed so that emissions are only about 10 per cent greater for oilsands-derived oil than for conventional oil, he added.

          Suncor has developed new tailings management technology that will enable the company to eliminate all but one of its existing tailings ponds, Williams said. “We will reclaim and restore all our disturbed lands to a natural state.”

          Referring to a forecast by the International Energy Association (IEA), he pointed out that in 25 years, global energy demand will be 40 per cent higher than it is today, driven mainly by India and China.

          World oil demand in 2010, which was 87 million barrels per day, is predicted to rise to 99 million b/d in 2035, according to the IEA.

          The IEA also forecasts that fossil fuels, which currently supply 81 per cent of transportation fuels, will still supply 75 per cent of those fuels in 2035.

          “Oil will need to be a critical part of that (future energy) mix,” Williams said. He acknowledged that the green jobs to be created through clean energy and clean technology are “critically important.”

          However, he noted that “the Canadian Energy Research Institute projects more than $2 trillion dollars will be invested in the oilsands industry over the next 25 years. Over that same time frame, the industry in expected to generate nearly a half a trillion dollars in government revenues and more than 800,000 new Canadian jobs.”

          Oregon Gov. John Kitzhaber told GLOBE delegates that the world is shifting from old to new energy business models, which creates “anxiety and churn.”

          It is “an age of paradox,” with trade wars to lock up the next new line of energy products and heated policy debates about leveling the playing field for clean energy, Kitzhaber said.

          But, in urging his audience to embrace the new and green technologies, he quoted renowned physicist Albert Einstein: “You shouldn’t use an old map to explore a new world.”

          The challenges of the new world can’t be met by clinging to the past, but by imagining a new world and building a new set of tools with which to achieve it, Kitzhaber added.

          The systems and values of the 20th century are no longer valid in a resource- constrained world, “which means we’ll have to change the systems themselves,” he said.

          He showed a graph with an ‘S’ curve to illustrate the growth of a company. A firm starts with an investment climate that produces growth and prosperity. Then, as circumstances in the environment change, but the company doesn’t modify its business plan to reflect the new environment, growth begins to flatten and eventually decline.

          “I think General Motors circa 2008 is an example of a company that didn’t heed this, and continued to build large fuel-inefficient cars in the face of high gasoline prices and concerns over climate change,” Kitzhaber said.

          Pointing to another graph with two parallel ‘S’ curves, he said that successful businesses recognize new business models and build a new growth curve.

          “For a while, both the old business model and the new business model have to co-exist,” which author Charles Handy, in his book The Age of Paradox, calls “the area of paradox,” Kitzhaber said.

          “People know that what they’re doing isn’t working, but because they’re afraid of the unknown, they continue to hold on to the old (business) model even though it ceases to serve them,” he added.

          “And I think that’s exactly where we find ourselves today . . . in how we seek to manage our natural resources, and certainly in our policies pertaining to energy and economic development.”

          The leadership challenge is being able to describe new clean energy business models “in such a robust way that people can see it and believe in it and let go of the old model,” Kitzhaber said.

          Jim Weigand, president of DuPont Sustainable Solutions, told GLOBE delegates that DuPont had gone from being “one of the worst polluters in the world” to a leader in corporate sustainability.

          The company now has an organizational passion for sustainability, innovation and collaboration, he said. DuPont’s vision statement is to create “sustainable solutions for a better, safer and healthier life for people everywhere,” Weigand said.

          The company’s mission is to create “sustainable shareholder and societal value while reducing the environmental footprint along the value chains in which we operate.”

          DuPont, which is 210 years old, has since 1990 saved $6 billion in energy costs while increasing production by 40 per cent and meeting all of its emissions-reduction targets, he added. Since 1989, DuPont has reduced greenhouse gas emissions by 55 per cent and toxic air emissions by 75 per cent, he said.

          The case for sustainability has to be incorporated throughout a company, beginning with “strong leadership at the top” and then integrated into the firm’s fundamental organization, Weigand said. It can’t be “the flavor of the day. You’ve got to work with it every day.”

          He noted that DuPont is focused on three “megatrends:”

          1. Food production. There are 150,000 more people in the world today than there were yesterday, and there will be 150,000 more today than tomorrow. Food production will need to rise by 70 per cent to feed the estimated nine billion people at which the Earth’s population is expected to peak, he said.

          2. Energy Reduction. This includes alternative and clean fuels, as well as reduced use of fossil fuels through efficiencies.

          3. Safety Issues. As an example, one of DuPont’s leaders looked at 81 million pounds of waste generated by the company, and said: “‘We’re going to get on a journey so that we put zero pounds (of waste) into landfills.’” By the fourth quarter of 2011, DuPont had achieved that goal, Weigand noted.

          The issues in these three megatrend areas are too big to solve for any one jurisdiction or organization, so companies, provinces, states and countries need to work together in collaboration, he said.

          “What we have to do is really embrace our competitors . . . suppliers . . . customers, government, NGOs and academia, and all together look at these issues. So what we do now is talk about the global ‘collaboratory,’ Weigand said. EnviroLine

           However, there are challenges even for non-food crop biofuels, including the capital investment required for production facilities, water consumption during production and managing large amounts of biomass, they told a GLOBE session on “Next Generation Biofuels: Driving the Development of a Lower Carbon Economy.”

          “I think the state of the technology (of next-generation biofuels) is very healthy,” although 2012-13 “are going to be pivotal years for the industry,” said panelist James Collins, president of DuPont Industrial Biosciences in the U.S.

          DuPont expects the global market for biofuels to hit $50 billion in 2010 and $100 billion by 2020. (For more on DuPont Biofuels, see http://www2.dupont.com/BioFuel/en_US/index.html).

          Brazil now uses biofuels for 50 per cent of its transportation fuel, while the U.S. uses about 10 per cent, Collins said.

          The keys to accelerating development of next-generation biofuels are using non-food feedstock sources and reducing the amount of water used in the production process, he said.

          Corn stover – the stalks and leaves from corn crops – can be utilized rather than the corn itself, which is now widely used in the U.S. to make corn ethanol), he added.

          DuPont, which participates heavily in the grain-based ethanol industry, also is working on using switchgrass (a native perennial native grass) to make ethanol, Collins said.

          Fibrous plant materials that can be used for making cellulosic ethanol include wheat straw, native grasses and forest trimmings.

          But a GLOBE delegate pointed out to the panel that it still takes more than 100 gallons of water to make a gallon of ethanol.

          Collins responded that by producing cellulosic ethanol instead of corn-based ethanol, DuPont expects to achieve a 10- to 15-per cent reduction in water use.

          Panelist Marie-Hélène Labrie, vice-president of government affairs and communications for Montreal-based Enerkem Inc. (http://www.enerkem.com/en/home.html), said that the company is building a full-scale commercial plant in Edmonton to turn municipal solid waste into cellulosic ethanol. The facility is designed to use 100,000 tonnes of municipal waste per year, to produce 38 million litres annually of ethanol. 

          The plant is expected to be the world’s first major collaboration between a metropolitan centre and a waste-to-biofuels producer to turn municipal waste into methanol and ethanol, Enerkem says.

          The company also operates a commercial demonstration plant in Westbury, Quebec, that uses treated wood from used electricity poles to produce five million litres of syngas per year.

          Enerkem also has a commercial plant in development in Varennes, Quebec, that will use sorted industrial, commercial and institutional waste to produce 38 million litres of cellulosic ethanol per year.

          A GLOBE delegate employed by the City of Calgary raised concerns with the panel about the liability issues for feedstock, which he said has been a barrier for the city in utilizing municipal waste to produce biofuels.

          Labrie said that this is not an issue for Enerkem with its Edmonton plant, because the company owns and operates the biofuels facility on the City of Edmonton’s landfill site.

          Panelist James Dack, vice-president of the Stern Brothers & Co. (http://www.sternbrothers.com/) investment banking firm in the U.S., noted that it costs $300 million to $400 million to build a large commercial advanced biofuels-production facility, so a company needs to be able to amortize that capital investment over several years.

          Labrie said it is important to do “extensive piloting” of any proposed facility.

          Enerkem’s Edmonton plant has modular design, she added. To reduce construction costs, components are built elsewhere, then shipped on skids and assembled onsite.

          Panelist Geoffrey Bell, CEO of Microbiogen in Sydney, Australia, told the session that about 25 per cent of biomass is lignin, which he said makes a good substitute for coal in coal-fired power plants.

          Microbiogen has developed yeast-based technology that can simultaneously convert waste plant biomass into fuel ethanol, high protein feed for farm animals and fish, as well as a product that can serve as an “environmentally friendly coal substitute,” according to the company’s website (http://microbiogen.com/).

          Dack said it’s important for companies to be able to extract the optimum value from the biomass feedstocks available.

          A GLOBE delegate asked if that’s the case, then why not use biomass feedstocks to produce the highest-value products, such as pharmaceuticals or plastics?

          Collins responded that producing biofuels is a good place to start, but he acknowledged that the “sugars” in biomass could be used to produce other value-added products.

          In 2007, the U.S. Congress issued a federal mandate for companies to produce 61 billion litres of cellulosic biofuels annually for transportation by 2022.

          A 2005 joint study of the U.S. Department of Energy and the U.S. Department of Agriculture concluded that the United States could produce 60 billion gallons of ethanol by 2030 through a combination of grain and cellulosic feedstocks – enough to replace 30 per cent of projected U.S. gasoline demand, according to a report by The National Academies Press.

          Between 2000 and 2009, the U.S. ethanol industry grew exponentially, from 1.6 billion gallons per year to 10.6 billion gallons annually, according to a 2010 research paper, “Ethical risks of environmental policies: the case of ethanol in North America,” by Sarah M. Jordaan and Michal C. Moore and published by the School of Public Policy at the University of Calgary. (See http://policyschool.ucalgary.ca/sites/default/files/research/biofuelsjordaanfinal.pdf for the full paper).

          However, a 2009 article, “Brazilian Ethanol Policy: Lessons for the United States, published in the Journal of Energy Security, author Vanessa Cordonnier wrote that in the U.S., “The major players in the ethanol industry are heavily invested in corn-based plants and production, virtually to the exclusion of all other feedstock.”

          Cordonnier, assistant attorney general in the environmental bureau of the Office of the Illinois Attorney General, said that through diversification of the ethanol feedstock as well as forging agreements with large auto manufacturers to produce ethanol-friendly cars, “the U.S. could both adopt the successes of the Brazilian model of ethanol production as well as avoid several environmental dangers.” (See http://www.ensec.org/index.php?option=com_content&view=article&id=179:brazilian-ethanol-policy-lessons-for-the-united-states&catid=92:issuecontent&Itemid=341 for the full article).

          For a 2010 critique of U.S. policies on biofuels, titled “How Good Politics Results in Bad Policy: The Case of Biofuel Mandates,” by Robert Lawrence, board member for the Belfer Center for Science and International Affairs, see (http://belfercenter.ksg.harvard.edu/publication/20354/how_good_politics_results_in_bad_policy.html?breadcrumb=%2Fproject%2F43%2Fenvironment_and_natural_resources).

Advanced Biofuel Alliance Formed

           In February 2011 leading companies in the advanced ethanol industry announced that they and the Renewable Fuels Association were forming the Advanced Ethanol Council (AEC), to accelerate the commercialization of advanced ethanol.

          AEC’s founding companies included Abengoa Bioenergy, BlueFire Renewables, Coskata, Enerkem, Fulcrum BioEnergy, Inbicon, Iogen, Mascoma, Osage Bio Energy and Qteros.

          “New ethanol technologies will dramatically increase transportation fuel security, create new jobs, and diversify the feedstocks that can be processed into transportation fuels,” said AEC Chair Bill Brady, Mascoma’s CEO.

          “This group will focus on addressing the fundamental commercialization challenges facing advanced and cellulosic ethanol. We look forward to working with (the Renewable Fuels Association) to develop common approaches for an integrated biofuels policy that will help America meet its energy security and environment objectives cost-effectively,” said Brian Foody, CEO of Ottawa-based Iogen Corporation.

          Iogen, a Canadian pioneer in producing cellulosic ethanol from wheat straw, expects to have produced more than 1.9 million litres by the end of 2012, since operations began in 2005 in the company’s Ottawa plant.     

          AEC said it will focus on developing “proactive and durable federal and state policies” to accelerate advanced ethanol development, ensure proper accounting of greenhouse gas emissions and environmental concerns, and expand the marketplace for ethanol fuels.”

          GLOBE session moderator Nigel Warren, senior trade commissioner with the Australian Consulate General and Trade Commission in the U.S., asked panelists about the role of government policy in advancing the development of next-generation biofuels.

          Dack from Stern Bros. & Co. responded that Sustainable Development Technology Canada (SDTC), which provides grants to support the development and demonstration of clean technologies, could instead offer loan guarantees.

          That would help support larger commercial projects and more effectively leverage SDTC funding, Dack said. According to SDTC’s website (http://www.sdtc.ca/index.php?page=sdtc-profile&hl=en_CA), the not-for-profit foundation’s $500-million NextGen Biofuels Fund “supports the establishment of first-of-a-kind large demonstration-scale facilities for the production of next-generation renewable fuels.”

          SDTC also has a $590-million SD Tech Fund which supports projects that address climate change, air quality, clean water and clean soil.

          In terms of leveraging funding, the ratio of industry-partner contributions to SDTC investment is approximately 2.4 to one, with about 83 per cent of contributions coming from private sources, SDTC says.

          In 2011, an expert panel headed by Tom Jenkins, executive chairman and chief strategy officer of Open Text Corporation of Waterloo, reviewed Canadian federal support for research and development that totals $5 billion annually.

          “Innovative, growing firms require risk capital, yet too many innovation-based Canadian firms that have the potential for high growth are unable to access the funding needed to realize their potential,” the Jenkins report said.

           Government can play an important role by facilitating access by such firms to an increased supply of risk capital at both the start-up and later stages of their growth, it said.

          The report recommended measures to establish risk capital funds that would be delivered through the Business Development Bank of Canada, “with incentives and governance designed to ensure strong private sector participation and leadership.”

          The Jenkins report also recommended creating an Industrial Research and Innovation Council to deliver the federal governments business innovation programs.

          The full Jenkins report, Innovation in Canada: A Call to Action, is available at http://rd-review.ca/eic/site/033.nsf/vwapj/R-D_InnovationCanada_Final-eng.pdf/$FILE/R-D_InnovationCanada_Final-eng.pdf

           KPMG, in its assessment of the federal budget released in March 2012, said the government acted on the Jenkins report’s recommendations and “is looking to support innovation in Canada using a markedly different funding model.”

          The federal budget announced $1.1 billion for direct R&D support and provided $500 million for venture capital initiatives, KPMG said.

          About $1.3 billion of this new funding is being redirected from the flagship Scientific Research and Experimental Development tax incentive program as the government “seeks to stimulate and support innovation through R&D activities carried on by business,” according to KPMG.

          Another recommendation of the Jenkins report was to transform the institutes of the National Research Council (NRC) into large-scale, sectoral collaborative R&D centres involving business, the university sector and the provinces, while transferring NRC public policy-related research activity to the appropriate federal agencies.

          KPMG’s report noted that the federal budget provided an additional $110 million per year to the NRC, to be used under the Industrial Research Assistance Program which supports R&D projects carried out by small and medium-sized (SME) businesses. The NRC will also create a “concierge service” to assist SMEs in accessing and making use of federal innovation programs, KPMG said.

          For KPMG’s report on the budget, see (http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/TNF/Pages/tnfc1215.htm). EnviroLine

Story By Elona Malterre

VANCOUVER – Sustainability initiatives enhance corporate brands, make companies more efficient and help industries grow profitably, ‘chief sustainability officers’ told the GLOBE 2012 business and environment conference.
           Cenovus Energy Inc.’s chief executive realized the importance of embedding sustainability into the corporate framework from the company’s beginning, said Judy Fairburn, the Calgary-based oilsands producer’s executive vice-president of environment and strategic planning.
           “Right from the outset when we formed in late 2009, our CEO realized that it was going to be really key for the long-term sustainability of the business to take a different approach to organization, so he formed my position,” she told a GLOBE session on “Driving the Corporate Sustainability Agenda.”
           Sustainability and “innovation were really part of our DNA.”
           Another driver for designing Cenovus’s sustainability framework has been the company’s long-term vision, Fairburn said.
           Oilsands development is such a long-term and capital-intensive investment, the company from the start set out 10-year plans for all aspects of development, she said.
          Historically, companies have looked only at such aspects as forecasting costs and production, she added. “But we also now include 10-year outlooks on people and . . . on environmental resources” – aspects that she called “critical to our future.” 
          About three-quarters of the 140 projects that Cenovus is currently working on benefit both the environment and the company’s bottom line, Fairburn said.
Cenovus was a key company in driving the creation of the newly formed Canada’s Oil Sands Innovation Alliance (COSIA – http://www.cosia.ca/) of 12 oilsands producers, she noted, adding that she had been very personally involved. “COSIA is the strategic planning entity for integrating environment into the way business is done in the oilsands.”
          Fairbanks told GLOBE delegates that she reports directly to Cenovus’s CEO, with her joint portfolio aligned between the company’s strategic and environmental components – a structure she said allows her to move fairly with sustainability initiatives. 
          She stressed the importance of the CEO giving her permission to be “constructively disruptive” within the company’s framework. She joked that a theme song for what she does could be “I Push the Line” – a twist on the Johnny Cash classic “I Walk the Line.”
          Fairburn likened her work in the oil and gas industry to “a marathon.”
However, she added that she is energized by enthusiastic Cenovus employees, from the “work floor” to the CEO, who want to take “great steps” in integrating sustainability into the corporate culture.
          Scott Wicker, vice-president of corporate plant engineering and chief sustainability officer for UPS Inc. in the U.S., told the GLOBE session that “the bottom line at UPS” integrates sustainability.
          “It’s the right thing to do. . . for our people . . . our customers . . . our communities.”
“It’s absolutely brand enhancing. And the bottom line is that (sustainability) will grow our business and we’re using it today to grow our business,” Wicker added.
          UPS, which began in 1907 as a bicycle-delivery service in Seattle, Washington, has grown to become the tenth-largest airline in the world, he said. The company has more than 400,000 employees and over 100,000 package-delivering vehicles on the road. 
          “We use a lot of fuel,” Wicker said, noting that UPS began working on sustainability initiatives more than 10 years ago.
          All such initiatives begin with efficiency, he said, adding that to manage efficiencies, the company has to be able measure usage of such things as fuel. “‘In God we trust. In everything else at UPS, we measure,’” he said, quoting a manager.
          The company is currently still dependent on fossil fuels (although it is looking at incorporating alternative fuels and advanced technology vehicles), so its focus “first and foremost” is on fuel conservation, Wicker said.
           UPS has “numerous initiatives that actually reduce the number of miles that we have to drive and fly every year.”
          Wicker noted that sustainability has to be a focus for everyone in the company, and that it won’t become part of the corporate philosophy with only a couple of people working in silos. “Sustainability is at the core of our business. It’s not a ‘bolt-on.’”
          For companies trying to start up a sustainability program or activities, he cautioned that “if it’s not core to what you do as a business, and if it’s not going to drive your business and drive your growth, it’s probably not going to work.”
          Panelist Linda Fisher, vice-president of safety, health and environment and chief sustainability officer at DuPont in the U.S., told the GLOBE session that DuPont’s initial steps toward sustainability came from efforts to protect the company’s reputation.
          Now, however, sustainability philosophies have been incorporated into how the company grows, she said.
          This includes annual meetings with the companies to which DuPont sells products. These meetings focus on “trends in the marketplace . . . (and) in government and how regulations might affect them,” Fisher said.
          There is also discussion of trends affecting DuPont’s customers’ markets and how these trends flow back through the value chain to DuPont, she added.
          “We have positioned . . .  sustainability as the first step of a four-step strategic planning process in the company,” Fisher noted.
          This means the sustainability review comes first, before the strategic planning meeting with the CEO’s office which comes next, followed by the “people review” and then the budget strategy.
           Sustainability began about 12 years ago at DuPont when personnel were told to reduce pollutant and greenhouse gas emission levels at a cost-effective price, Fisher said, adding that “the real connect to the businesses . . . was around reputation.”
           The company then began focusing on efficiencies which, since initiatives began about a decade ago, has saved shareholders “about $6 billion,” she said. “Focusing on efficiency, not just footprint reduction, (meant that) the connect to the business was dollars returned.”
            DuPont went beyond managing its own sustainability and efficiency issues, and began offering products that “would make our customers more sustainable,” Fisher said.
           For example, the company offered products to automobile manufacturers that would help them meet their targets under the U.S. federal government’s Corporate Average Fuel Economy (CAFE) program. (See http://www2.dupont.com/Media_Center/en_US/assets/images/releases/WardsAuto_DuPont_survey.pdf).
          CAFE rules require automakers to double the average fuel economy of their vehicles to 56.2 miles per gallon by 2025 (see http://www.nhtsa.gov/fuel-economy).
          “The resonance, the interest (and) the enthusiasm of (DuPont’s) business changed significantly when we took (sustainability) from just how we operate to how we grow,” Fisher said.
         Kevin Anton, chief sustainability officer at Alcoa, the world’s largest integrated aluminum company, told GLOBE delegates that the firm’s board of directors wanted to drive the sustainability agenda “hard.” 
         That means Alcoa “doesn’t exactly have a sustainability strategy, but . . . has incorporated the sustainability levers into our individual business strategies. So we haven’t created sustainability as a silo,” Anton said.
          The company has a broad concept of sustainability that encompasses employee wellness, community interaction, operations footprint, social license to operate and product attribute, he noted.
           Aluminum, used in a wide range of products from soda pop cans to airplane bodies, is “infinitely recyclable,” Anton said.
          Alcoa manufactures about 95 per cent of the aluminum alloys used in airplanes, and recently developed aluminum alloys that are 10 per cent lighter than the carbon composites used in the Boeing Dreamliner, he added.
          It takes about five per cent of the energy to turn a recycled aluminum can back into another aluminum can, compared with the energy it takes to mine bauxite and manufacture a new product, Anton said. “So if we think we’re in a resource-constrained world and we are, recycling aluminum . . . plastic . . . paper is mandatory.”
          Metrics are embedded throughout Alcoa in each sector’s business reviews, Anton said, including production goals and sustainability goals.
          Tony Manwaring, CEO of Tomorrow’s Company in the U.K. and co-moderator of the session, told delegates that he’d seen big changes around sustainability since he first attended GLOBE six years ago.
          People had begun to talk excitedly about the concept of sustainability, but they really didn’t know how to put it into action, he said. Even two years ago, “there was some big stuff starting to bubble up, but it wasn’t quite mainstream yet.”
          But it is very exciting now that in North America, there is “a kind of palpable sense of (sustainability) being embedded . . . it’s the way you do business.” Manwaring said.
          Session co-moderator Dianne Dillon-Ridgley, director of Interface Inc. in the U.S., said that governments aren’t likely going to lead sustainability efforts.
          Referring to comments Manwaring made at a GLOBE 2010 session (http://envirolinenews.ca/file/page/archives/volume_17_issue_17_18.pdf) that corporations are well placed to lead world sustainability initiatives, Dillon-Ridgley said that “it really is up to the corporate world to figure this out.” EnviroLine