Lloydminster, Sask. (Rural Roots Canada) – Cenovus Energy will shut down its Lloydminster ethanol plant on Dec. 15, a decision that will leave some farmers in northwestern Saskatchewan and eastern Alberta looking for new markets for their grain.
The company said in a statement to Rural Roots Canada that the closure follows an economic review of the facility. It is working to transition employees to other roles within the company while maintaining the plant as it evaluates future uses and options.
Devon Walker, a director with the Agricultural Producers Association of Saskatchewan (APAS) who farms near Lashburn, Sask., said the closure will disrupt marketing plans for producers who have relied on the plant as a local buyer.
“To see it go is disheartening for folks, and it kind of throws a wrench in people’s marketing plans and their logistics,” he said. “It really changes how farmers are going to have to do their business.”
The plant, originally operated by Husky Energy before Cenovus acquired it, has served as a local market for ethanol wheat and off-grade grain, according to Walker.
It also began accepting barley and, more recently, fall rye, allowing some producers to diversify their crops.
Read more: Grain Industry Warns Transportation Disruptions Threaten Export Sales and Reputation
With that market disappearing, farmers may have to ship grain farther to find buyers, increasing transportation costs. Walker said the closure could also influence next year’s planting decisions, with some producers likely to move away from ethanol wheat in favour of hard red wheat or other cereal crops.
Walker also noted how the timing of this announcement is particularly difficult.
“We just got a decent crop pulled off here in the Northwest of Saskatchewan and that sales outlet door is being closed,” he explained.
Walker said he did not view the decision as malicious, noting that Cenovus had previously signalled concerns about the plant’s viability.
“I think most producers understand the reasons behind it, the economics of business, but it throws a wrench in people’s plans, and they’re going to have to make changes on their farm.”
Cenovus said it has notified suppliers, customers and regulators of the planned shutdown.
PHOTO CREDIT: Cenovus Energy
