3 Insights: Oil vs Renewable Energy

Recently, Gnowit began taking an interest in clean technology. Cleantech is an exciting area for me, and not just because I’m a big believer in the need for sustainable business practices. The fact is, Canada is a hotbed of green innovation, providing leading-edge technologies and expertise to countries all over the world.

My research turned up impressive Canadian exports in the areas of wind, solar, and hydroelectricity, as well as energy storage and water treatment. One of my most noteworthy discoveries was Toronto’s Woodland Biofuels Inc, a producer of cellulosic ethanol. For those who don’t know, cellulosic ethanol is a fossil fuel alternative derived from certain types of biomass, such as plant waste. Unlike commercially-available ethanol, it’s not produced from corn or other food sources. According to a Financial Post article, Woodland Biofuels Inc is expected to be the lowest-cost producer of fuel in the world.

This discovery inspired me to focus this “3 Insights” post on topics related to fossil fuels and their alternatives. With the aim of tracking ongoing developments related to these subjects, I entered the terms “clean technology”, “oil sands”, “renewable”, “ethanol”, and “biodiesel” into the Gnowit CoreAlert system. Thinking about the reading I’d done on cellulosic ethanol, I added “forestry” to the mix (since this type of fuel can be made from wood). The insights I discovered are detailed below.


Falling oil prices aren’t necessarily a bad thing for those in the renewable energy business

As expected, my Gnowit dashboard (pictured above) turned up a large number of results related to current oil prices and what they mean for traditional energy companies and Canada’s economies. Metro News reported that “Alberta’s economic growth [will] be cut in half”, while an article in Saskatoon’s Star Phoenix rehashed “the dark days of 2009 and 1999”.

When it comes to the renewable sector, it may seem intuitive that lower prices at the pump will stifle traction. The reality is not so simple. One factor to consider is the effect falling oil and gas stocks will have on investors. Will these individuals decide to focus on renewable energy instead? How many will follow the strategy of the wealthy Richardson family, who are investing in oil in a bid to profit from the slump in the long run? These are the kinds of questions many alternative energy providers are asking, and will continue to ask as their industry grows.

It is perhaps not surprising that these topics have opened up a lot of media discussion about renewable energy over the course of the last two weeks. A Globe and Mail article explores the fear that, due to cheaper oil, China’s “remarkable drive to embrace clean energy will now go into reverse.” In the article, expert John Mathews concludes that, given the country’s motivation for adopting renewable energy (energy security and job creation), its investment “will only get stronger even as oil prices sink”. This is good news for the many Canadian cleantech companies hoping to export to China.

Exploring the dashboard also turned up numerous editorials (and articulate reader commentary) on the potential of geothermal as well as solar and wind power. There has been a recent resurgence of interest in the renewable energy, and, if my understanding of the results obtained on my Gnowit dashboard are any indication, the drop in oil prices has only accelerated the conversation.


How I found this information: A glance at the Gnowit word cloud (pictured below) revealed the dominant topic related to oil in the media: money. Terms that made an appearance included “oil prices”, “budget”, “bank” and “slash spending” (this last term related to one of the many oil companies affected by the drop). “Suncor” – an oil sands giant that has taken a major blow – also appeared. Interestingly, there were also terms related to renewable energy, such as “scotian windfields”. Clicking on these terms brought me to most of the articles referenced above (among others).


Knowing China is an important market for Canada’s cleantech  sector, I performed a direct search for articles related to the country using the “search” box. Numerous articles came up, including the one referenced above.


Recent scientific breakthroughs may lead to cheaper methods of producing cellulosic ethanol

My search for “forestry” paid off, providing a wealth of information that could be useful to cellulosic ethanol producers. A number of articles discussed a recent boost to B.C.’s forestry industry, caused in part by a recovering American housing market. Some of these companies, such as TimberWest and Tolko, are getting into the fuel pellet-production business. Wooden fuel pellets as clean energy is a controversial subject, as manufacturing and burning them produces carbon emissions. But the partnerships between forestry and fuel producers may have implications for makers of cellulosic ethanol, many of whom repurpose wood waste.

One of the most interesting insights came from an editorial in the Vancouver Sun. The editorial, “Forestry Sets Example for the Future”, looks at ongoing experimentation in producing genetically-modified trees. In addition to growing faster and resisting pests, many of these trees are designed to “break down more easily to make wood pulp and other products”. The article makes the connection between these new traits in trees and the production of cheaper biofuel explicit.

Whether or not this is a positive development may depend on how you feel about GMOs (and attendant patent issues). But according to the editorial, the genetic modification of trees has the potential to reduce deforestation. It could also aid in reforestation, which plays a role in the carbon neutrality that is often formulated into the sustainability of biofuels such as ethanol.


How I found this information: I found most of the articles referenced above by exploring results that were positive in tone. Gnowit recognizes and identifies all content as positive, negative, or neutral in sentiment (see a breakdown of my results in the pie chart below).


For this particular set of results (which was largely negative due to its focus on the effect of oil prices on the Canadian and Alberta economies), I was curious about any positive news from the last two weeks. Most of the articles discussing forestry were about B.C.’s strong economy, and these were tagged as positive.


Some renewable energy projects are taking a lot of heat

From policies that favour traditional energy production to high initial infrastructure costs, renewable energy projects face their share of obstacles. But it may come as a surprise to some that these projects can stir up as much controversy as many of their traditional counterparts.

A January 1st article in the Globe and Mail describes opposition to a hydroelectric project in Ontario’s Lake Muskoka region. Though the project has drawn only one protester – permaculture educator Peggy Peterson – many in the community are vocally opposed to its construction. The Wahta Mohawk First Nation has written to both the Ontario and federal governments to state its objections, and a documentary about the struggle is currently in production. Issues of contention include the safety of recreational boaters and the disruption of a historical First Nation portage route.

A story published by Global News on January 12th explores the contention surrounding a proposed fuel-pellet plant in Coldsteam, B.C. If built, the plant – a partnership between Pinnacle Renewable Energy and forest-product company Tolko – will use the wood shavings from Tolko’s nearby mill to create fuel pellets. As one of the conditions of the plant’s construction, the Ministry of Environment has told Tolko to reduce the emissions from its mill, an action that is supposed to result in an overall reduction of pollution in the area. Pinnacle presidents Leroy Reitsma calls the plant “an air quality improvement project”. But there have been numerous objections from residents and some councilors, who are concerned by the proposed site’s proximity to a school.

These cases should serve as a reminder to cleantech companies: never underestimate the power of a group of concerned citizens. Assuming a “green” designation will protect you from public outcry could be a big mistake.


How I found this information: Many journalists around the world mark the new year by proclaiming their countries’ renewable-energy success stories. Predictions are often made, as are explanations for why the following year will be the most sustainable ever. I wanted to see what the Canadian media was saying on January 1, so I clicked on the corresponding bar on the “daily buzz” bar graph. This is how I found the Globe and Mail article, which was published on this date.

The Coldstream story was found when I recognized, through various stories I found in the dashboard, that the popularity of wood fuel pellets was rising. I decided to search my results for more articles on the subject, and typed “biofuel pellets” into the search box.


The Bottom Line

The broadening conversation about our economic dependence on oil (not to mention climate change) is providing cleantech companies with new opportunities, but with these opportunities come challenges. As part of a relatively new sector, producers of clean technology must take on the burden of educating potential partners, investors, and members of the general public. Whatever tools a company uses to stay informed, the foresight and courage to seek out and meet new challenges will remain its greatest asset.

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