CALGARY, Alberta - Canada's Iogen Energy Corp., developer of a process to turn forest and agricultural waste into a low-emissions auto fuel, has drawn a $29 million investment from oil giant Royal Dutch/Shell Group , which is on the prowl for alternative energy sources.
Privately owned, Ottawa-based Iogen focuses on bioethanol, a high-octane alcohol formed by fermenting sugars found in plant fibre such as wood and straw. Its goal is to mass produce bioethanol, which can be blended with gasoline to produce a more environmentally friendly fuel. Shell, the Anglo-Dutch giant that owns 72 percent of Shell Canada Ltd. , the country's No. 2 integrated oil firm, will own "just over 20 percent" of Iogen in return for the investment, an Iogen executive said.
Shell is not the first petroleum firm to pump money into Iogen, which employs about 100 people and owns a C$35 million ($22.3 million) demonstration plant. Petro-Canada , the country's No. 4 producer, refiner and marketer, provided seed funding in late 1997 that helped Iogen build its pilot plant in Ottawa.
Lesley Taylor, a spokeswoman for Shell Canada, said Iogen's process could substantially reduce total greenhouse gas emissions from vehicles.
"In terms of of sustainable development, it would definitely be an interesting development for us," she said. "We would be open to using (bioethanol) once it's commercially available and viable."
Some Canadian fuel retailers, such as Husky Energy Inc. and Suncor Energy Inc. , already blend ethanol into their gasoline to reduce pollution.
Most of the world's 30 billion litres a year of ethanol is produced from sugar cane in Brazil and from grains in the United States. In Brazil, the United States and Sweden it is already blended into gasoline.
Royal Dutch/Shell Group said it recognized that fuel using such traditionally produced ethanol is unlikely to ever compete commercially with normal gasoline, but bioethanol "offers a more economic and sustainable blending component."
The firm has earmarked $500 million of investment over a five-year period for cleaner energy projects.:
