Part I    Part II

Biofuels are all the rage these days. It seems hardly a day goes by without a government announcement or newspaper headline proclaiming another victory for the industry.

We're bombarded with the message that biofuels are the answer to so many of life's problems. Want to stop "global warming" in its tracks Think biofuels. Want to revive the farm economy Think biofuels.

Biofuels are sources of energy derived from organic materials such as grain, straw, ocean algae or even wood chips. The king and queen of the biofuel business are ethanol and biodiesel.

Ethanol is produced by fermenting sugars -- the same process as making booze in a still. The most popular biological feedstock for ethanol in North America is corn because of its high sugar content but it can also be made (albeit less efficiently) from wheat or any other starchy plant. The finished product can be used as an additive for petroleum gasoline, or to replace gasoline all together with proper engine modifications.

Biodiesel is a form of diesel made from vegetable oils. Any plant or animal oil can be used to make biodiesel but it's commonly made from canola or palm.

We're told by politicians and industry lobbyists that using biofuels instead of fossil fuels will reduce our reliance on Middle-Eastern oil, reduce CO2 and smog-creating emissions, and revive rural economies. It's because of these alleged benefits that all levels of government are busy passing laws and handing out tax dollars by the bucket to the biofuels industry.

In Ottawa, the Harper Conservatives have busied themselves handing out money since the day they took office, and the Saskatchewan government recently launched an $80 million "repayable" loan program that will give up to $10 million dollars each to prospective producers. The Saskatchewan government even tried to build its own ethanol plant near Regina which never got off the ground.

Are taxpayers getting their money's worth from biofuel subsidies

There is a significant body of research questioning the environmental benefits of so-called "green fuels." According to one study done at Cornell University it takes 29 per cent more energy to grow crops and produce ethanol than is present in the final product. In other words, it's like burning 1.29 liters of gas to make just one liter of gas.

Industry watchers also question whether ethanol actually reduces CO2 emissions when the fossil fuel energy required to grow crops and produce ethanol are factored in.

Biodiesel from canola brings significant environmentally-friendly properties - it's biodegradable, burns cleanly and doesn't emit as much smog-producing pollutants as regular diesel. However, like ethanol, biodiesel offers poorer fuel economy so more of it needs to be burned to go the same distance.

The body of scientific research questioning the wisdom of biofuels is substantial, but are politicians paying attention So long as voters and the media accept claims of the benefits of biofuels without question, politicians will pour more of our tax dollars into subsidizing producers.

"Risk" is part any business venture. The question here is who should carry the risk - private investors or Canadian taxpayers. Our governments have clearly decided taxpayers should bear the risk and throw money into biofuels, but it's uncertain taxpayers would be eager to play along if they knew all the facts.