GOVERNMENTS COMMIT MORE THAN $1 MILLION TO TWO ETHANOL PROJECTS

Two projects that support ethanol research and development in the province's ethanol industry are receiving more than $1 million under the Canada-Saskatchewan Western Economic Partnership Agreement (WEPA).

Through the WEPA, the federal and provincial governments are providing $950,000 to the community of Nipawin toward a $2.1 million biomass-based ethanol commercialization initiative. The community will conduct the initiative using technology developed by the Saskatchewan Research Council. Additional funding of $100,000 is also being provided under the WEPA to the recently established Saskatchewan Ethanol Development Council.

The Honourable Ralph Goodale, Minister of Finance, on behalf of the Honourable Stephen Owen, Minister of Western Economic Diversification and Minister of State (Sport), and Industry and Resources Minister Eric Cline made the funding announcements today.

"Advanced technological research and new ethanol production facilities have the potential to fuel a new value-added agricultural sector for Saskatchewan farmers," Minister Goodale said. "The Government of Canada is committed to 'green' projects that will help communities to sustain diverse, productive economies, preserve our natural environment and improve quality of life for Canadians."

The extensive, multi-year review at Nipawin includes technology development and plant design along with analysis of the environmental implications, feedstock availability and marketing potential. The objective is to come up with a business and engineering development plan that would enable production on a commercial scale, potentially leading to the establishment of a 75-million litre facility.

Cline said Saskatchewan has many natural advantages where ethanol production is concerned, including the lowest-cost feedstocks in Canada.

"We will be eager to see the outcome of the Nipawin project," Cline said. "It has the potential to further our overall goal of building a green and prosperous economy through sustainable economic development such as a growing bio-fuels industry. Bio-fuels such as ethanol help reduce greenhouse gas emissions, and also promote rural economic diversification through value-added agriculture."

"Once this project reaches the commercial phase, it will provide Nipawin with jobs, investment opportunities and a market for local biomass feedstock such as flax straw and forest waste," Nipawin Mayor Glen Day said. Day noted that the Nipawin Biomass New Generation Co-operative is central to the initiative, raising local investment dollars to advance the project.

The new Saskatchewan Ethanol Development Council (EDC) has been set up to explore the potential for ethanol projects in Saskatchewan. The EDC will work with communities and other interested parties in advancing Saskatchewan's ethanol industry. It is expected to play an important information and education role.

"We want to make Saskatchewan the largest and most efficient producer of ethanol in Canada," President of the Saskatchewan Ethanol Development Council Lionel LaBelle said. "Working in tandem with agricultural producers and all levels of ethanol production, crop science and distribution, we can add value to our markets, create jobs and help re-energize the rural economy."

Signed in September 2003, the Canada-Saskatchewan Western Economic Partnership Agreement focuses on increasing the competitiveness and productivity of Saskatchewan's economy. The agreement funds initiatives that develop Saskatchewan's small and medium-sized business sector, support economic and technological innovation, assist in economic diversification, and increase Aboriginal participation in the economic mainstream.

Funding for the WEPA is provided for in the 2005 federal and provincial budgets.

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For More Information, Contact:

Joanne Mysak Western Economic Diversification Canada Saskatoon Phone: (306) 975-5942

Bob Ellis Industry and Resources Regina Phone: (306) 787-1691