An environmental group says Saskatchewan Premier Lorne Calvert should abandon his plans for a countrywide E85 highway, warning that boosting ethanol production will cause serious economic and agricultural problems.

What is ethanol and E85?
Ethanol is produced when organic materials, including wheat, barley, corn and hops, ferment. E85 is a fuel made up of 85 per cent ethanol.

Cathy Holtslander, a spokeswoman for the Beyond Factory Farming Coalition, says the premier's drive to have pumps offering E85 installed in service stations across the country is short-sighted.

Calvert, who is in Moncton this week meeting with other premiers, said he planned on promoting the use of biofuels at the summit as a means of decreasing greenhouse gas emissions.

But Holtslander said an increased reliance on ethanol would bring poor farmland into production, increasing erosion and loss of habitat.

"Ethanol is destructive in many ways and it's not providing the answers that they are claiming it provides," she said.

"There's all sorts of ways that we could reduce the fossil fuel usage and the emissions associated with that instead of trying to substitute ethanol."

Food prices increased 10% in 2006

Holtslander also noted demand for ethanol to fuel cars diminishes the world's food supply. In May, the International Monetary Fund said food prices jumped by 10 per cent in 2006 in large part because of surging corn, wheat and soybean oil prices.

Farmers in North America and Europe have said as corn feed used for chicken, hogs and cattle becomes more expensive, prices will rise for meat, eggs and dairy products.

In the March 2007 budget, the federal government said it was allocating up to $1.5 billion over seven years as an operating incentive to alternative fuel producers.

The government also introduced its ecoAUTO program in the budget. The program offers a rebate for new cars with consumption ratings of less than 6.5 litres of gasoline for every 100 kilometres driven, and minivans or SUVs rated at less than 8.3 litres/100 km (based on 55 per cent city driving and 45 per cent highway).

At the time, industry observers criticized the inclusion of vehicles that use E85. As there are only a couple of stations in Ontario that sell the fuel, situated in Guelph and Ottawa, drivers could qualify for the rebate with a car designed to use E85 or gasoline but still fill their cars exclusively with gasoline.