There is a great deal of wheat in store at the present time; in fact our surplus is becoming rather alarming in
quantity, and of course the west keeps on producing wheat, so that people are led to cast about for various ways of taking care of this surplus. I know the best way is to sell it and ^hip it overseas, but in recent years markets have not been available, and during the past few years the price of wheat has been very low, so perhaps this is an opportune time to raise this question, and with the minister's consent I will endeavour to place some facts before the committee.
There is a very great deal of gasoline used in Canada for motor fuel purposes. According to my information, based on statistics for 1932 and 1934, approximately 500,000,000 gallons of gasoline are used in Canada every year. Practically all the raw material used for making that refined gasoline is imported. In 1934 we imported crude and partially refined petroleum oil to the extent of 1,063,539,693 gallons, at a cost of over $25,000,000. That amount of money went out of the country, chiefly to the United States, Colombia, Dutch West Indies, Peru, Venezuela and Trinidad. The first cost, of course, went to these various countries, while a small share, amounting to a little over $300,000, went to our government in duty. In addition, in that year there were 15,108,093 gallons of refined gasoline imported, at a total cost of $1,706,796, coming chiefly from the United States and Dutch West Indies. So- it will be seen that there have been large expenditures for motor fuel purposes, most of the money going outside Canada, and in addition in 1934 we had to import tetraethyl lead, which is mixed with gasoline to do away with what are referred to as the knocking qualities in gasoline. We imported 1,398,928 pounds of tetraethyl lead, at a cost of over $1,000,000; this came entirely from the United States. In 1934, therefore, we paid out to other countries something over $27,000,000, in addition to $793,000 in duties to this government, or a total of over $28,000,000 for this purpose.
I am giving these figures, Mr. Chairman, to show what large sums of money go out of our own country in order to supply us with our gasoline requirements. The question of making alcohol from wheat has been investigated very thoroughly. I have here a report of the national research council dated May, 1934, in which they give a detailed account of their investigations in connection with this matter. They tell us that one bushel of wheat will produce approximately two gallons of alcohol. Their proposal as outlined in this report is that we could very well use a ten per cent mixture of alcohol with our gasoline. That would mean ten per cent of
500.000.000 gallons, or 50,000,000 gallons of
alcohol which might very well be mixed with our gasoline for motor fuel purposes. To produce that 50,000,000 gallons of absolute alcohol would require 25,000,000 bushels of wheat. Now if it can be shown that that alcohol can be produced at a cost that is not too exorbitant, it will perhaps appeal to us that it would be something at least worth trying.
This gentleman who operates under the national research council has given us the conversion cost, that is the cost of converting wheat into alcohol, and he takes care to include every little detail. In the first item he has overhead, depreciation, taxes and return on investment, and the cost per gallon under that item is 4.5 cents. The second item is operating charges, labour, fuel, water, chemicals, barley, and so on; that comes to 6.5 cents; dehydrating and denaturing 2 cents. The total cost is 13 cents per gallon. You will notice that he takes in every detail, even allowing for a return on -the investment, and of course we know that in recent years a great many concerns have been carrying on without any return at all on their investment. He also points out that in a large plant, and under favourable conditions, this cost of 13 cents per gallon might be reduced by two or three cents. He points out that no allowance has been made for by-products such as yeast or carbon dioxide, which if sold would reduce that cost of 13 cents.
Now take the matter of wheat prices. In recent years the price of wheat has been very low, and that is what opens up the thought that we might use wheat to advantage-for this purpose. From the bulletin I have here I find that over the four years, 1931, 1932, 1933. 1934, the average price of wheat in Saskatchewan and Alberta was as follows:
35 321933 47 451934
So we see that the price of wheat has been extremely low in those four years. The research council has taken the three years, 1930, 1931 and 1932, and they have given us the average price in those years of No. 1 northern and No. 5 wheat. The price of No. 5 in 1930 averaged 51 cents; 1931, 46 cents; 1932, 39 cents. They point out that No. 5 wheat is very useful for the making of alcohol; in fact, it does not need to be a high grade wheat. The lower grade wheat serves fairly well, while it does not produce as much alcohol per bushel. I think it would be fair to assume
that the average price of No. 5 wheat would be 50 cents a bushel in view of what prices have been over the past few years. We find that in the province of Manitoba the use of alcohol in the way suggested a ten per cent mixture, would increase the price of motor fuel by 2.7 cents per gallon; in Saskatchewan it would increase the price by 2.5 cents per gallon, and in Alberta by 3 cents per gallon. They point out that the domestic freight rates are so high for wheat moving to British Columbia that it might be cheaper to manufacture the alcohol in Alberta and ship it to British Columbia, and so they do not give us any price for that province. In Ontario, allowing for the shipping of the wheat from the west to the east, the increase in price would be 3.9 cents per gallon, and in Quebec and the maritimes it would be practically the same. Taking the average for the various provinces we find that the increase in price would be about 3 cents per gallon for a motor fuel with a ten per cent mixture of alcohol added to the gasoline. Let us take that figure and consider what it would mean spread over the whole dominion. In British Columbia it would mean an increased cost to the purchasers of motor fuel of $1,170,000; in Alberta, an increase of $902,000; in Saskatchewan, an increase of $714,000; in Manitoba, an increase of $700,000; in Ontario an increase of $8,260,000; in Quebec, $3,276,000; in the maritimes, $1,260,000. So that the total increase in the cost of the total quantity of gasoline consumed in one year would foe $16,282,000. That may look like a large sum of money to put upon the shoulders of the users of motor fuel, but when we remember that approximately half of that $16,000,000 odd goes into the pockets of the farmers of Canada and the balance into lake and rail freight, elevator charges, manufacturing costs, freight on alcohol, and so on, it does not look so terribly extravagant, because a few minutes ago we pointed out that over $28,000,000 was being sent outside the country for the purpose of supplying us with our motor fuel.
I want to give some of the benefits that would come from a mixture of alcohol with our gasoline. Perhaps one of the most important benefits is obtained from the antiknock qualities of gasoline when mixed with alcohol. That is the reason that refiners of gasoline have to import tetraethyl lead to mix with gasoline to eliminate the knocking properties which gasoline naturally has. By mixing absolute alcohol with the gasoline it is not necessary to use tetraethyl lead. In fact, we are told by these research men
that the use of alcohol has a better effect on the gasoline than the use of tetraethyl lead.
Another advantage would be that it would reduce the formation of carbon in the engine, reduce the oil consumption of the engine, and give a longer life to the valves and the engine parts in general due to the smoother operation. While we have no absolute figures or estimates on these points, that is the conclusion of the research council as to the effect of mixing alcohol with gasoline. Also, Mr. Chairman, it would reduce our imports considerably, thus helping our trade balance. Another important point in its favour is that it would tend to give an impetus to the distilling business in Canada. In 1933 we had eighteen distilleries in Canada, which produced a little over 3,500,000 gallons of absolute alcohol.
Topic: DEPARTMENT OP TRADE AND COMMERCE