Delivery-truck operator Rick Roos does not have to worry about how much he'll pay at the pump as crude oil prices hit record levels. That's because the Toronto-based businessman is driving innovation - literally.

Roos converted his diesel truck to run on used vegetable oil almost three years ago and hasn't looked back.

"I was putting a lot of carbon out the tailpipe and my Visa bill was getting out of control," says the owner of Roos Transport. "Now I get my fuel for free."

That fuel, which comes from restaurant deep-fryers, would otherwise be a waste product. Local pubs actually pay Roos to pick it up and after mechanical filtering in his garage - to get out the french fry bits - and de-watering, Roos is ready to hit the road.

Photo courtesy of Roos Transport
Rick Roos finds his alternative fuel source, used vegetable oil, delivers more than savings with the scent of french fries.

"It's a beautiful product and I personally find there's a slight increase in power," Roos says. "You really can't tell the difference - except that it really does smell like french fries, which is certainly a nicer smell than gas."

The truck runs on a two-tank system and can switch between vegetable oil and petroleum diesel. In cooler weather, the truck needs to be started with diesel to warm up the oil, which usually takes about four to five city blocks. Roos then flips to vegetable oil for cleaner, greener motoring.

While environmental concerns initially fuelled Roos' decision to convert the truck, going green has also meant making green.

"A drive from Toronto to Kingston costs me about $1 in diesel, compared to about $100 if I wasn't using vegetable oil," Roos explains. "It allows me to quote much lower than the other guys because I don't have fuel costs. Fuel is a huge one, so it makes me more competitive."

In the competitive arena of politics, waste vegetable oil was put to the test when Ontario Green Party Leader Frank de Jong used a converted Volkswagen Golf to power around the province during the last election.

The car revved up an estimated 5,000 kilometres on the campaign trail. Owner Chris Walker, who converted the car himself using a commercially available conversion kit, says the move is saving him at least $120 a month.

"I'd rather the money for my transportation fuel go back into Ontario instead of sending it overseas or to the big oil companies," Walker says. "And while this is not a solution for the entire transportation fuel challenge, it is a way we can reduce our use of fossil fuels - just one aspect of the solution that can really assist local economies and small farms."

With one billion cars predicted to be on the road by 2020, according to the environmental research group WorldWatch Institute - almost 50 per cent more than 10 years ago - the need to find a solution and reduce our reliance on fossil fuels is greater than ever before.

Researchers, farmers, big business and industry are all now rushing to be the first over the finish line with an alternative fuel that can have mass-market appeal and eventually replace traditional gasoline.

Harvesting the potential of food crops, ethanol is leading the race.

It's already commercially available in Canada and can be found, as a 10-per-cent ethanol-blended gasoline (E10), at more than 1,000 retail outlets.

"It's moving forward in full force and by the end of this year, Canada will be producing one billion litres of ethanol a year," says Robin Speer, director of public affairs for the Canadian Renewable Fuels Association. "It's still largely concentrated in corn-based facilities in Ontario and Quebec, but there are several wheat-based facilities coming online on the Prairies in Saskatchewan and Manitoba."

One of those facilities, in Minnedosa will produce 130 million litres of ethanol per year alone when it's at full capacity. This will enable Manitoba to meet an ethanol mandate that will be the highest in Canada, calling for 8.5 per cent of all gasoline sold in the province to be ethanol starting next year.

Saskatchewan already has a 7.5-per-cent standard and Ontario has five per cent. Beginning in 2010, a federal requirement for five-per-cent ethanol will pump up production even further, doubling it to around two billion litres a year.

"Ethanol sells at a significant discount to gasoline, it's a cheaper fuel, a cleaner-burning fuel and one produced domestically that's creating jobs in rural Manitoba," Speer says. "Consumers definitely want that choice."

South of the border, consumers have even more choice with E85, which as the name suggests, is 85 per cent ethanol.

Readily available in the U.S. Midwest, E85 rings up sales at about 1,300 service stations - set to double in the next year or two - at a considerable discount.

Canada has only three public E85 pumps, with the high ethanol blend being used primarily for fleet vehicles.

Unlike E10, on which any car manufactured after the 1980s can run, E85 requires vehicle modifications or a flexible-fuel vehicle to handle the high alcohol content.

With more auto manufacturers making flex-fuel vehicles, outgoing Saskatchewan Prem-ier Lorne Calvert had called for an E85 highway that would run coast-to-coast with pumps along the Trans-Canada and Yellowhead highways.

It's a major infrastructure issue, but as the demand for E85 increases, insiders believe building the market domestically will be critical to positioning Canada as a leading ethanol exporter.

"We're actually a net ethanol importer right now, so when these plants come online on the Prairies, we'll have that capacity to meet our standards and with that capacity we'll then be able to increase those low-level blends and see things like E85 and ultimately become an exporter as well," Speer says.

However, despite ethanol being touted as a clean-burning fuel, its green credentials are in dispute.

The production of ethanol - from the large amounts of power required to make it to the fertilizers used in growing it - has many questioning whether it actually burns more fossil fuels than it saves.

"Corn-based ethanol is a joke environmentally," says University of Calgary Prof. David Keith, Canada research chair in energy and the environment. "Politically, it's very good because it (addresses) farm state politics and oil security, but it's environmentally, at best, ambiguous. If you do ethanol on a broad scale, you need to fix the environmental concerns."

A greener alternative is cellulose ethanol, which is made from agricultural waste such as cereal straws.

Giving new meaning to the old adage "waste not, want not", this biofuel breakthrough can be used in today's cars and compares favourably in cost to conventional ethanol.

The agricultural waste used to make it can also be burned to generate power to run the cellulose ethanol facility. Because of this ability to provide both power and fuel, the U.S. Department of Energy has determined cellulose ethanol reduces greenhouse gases by 90 per cent compared to gasoline.

Making inroads in commercializing cellulose ethanol, Ottawa's Iogen Corp. is producing about two million litres of this next-generation biofuel a year in the world's only demonstration-scale facility.

Plans are now underway to build the world's first commercial cellulose ethanol plant, most likely in Saskatchewan.

"You can make millions of litres of ethanol by taking a waste product like this or wood waste or grass clippings and turning it into a clean fuel," says Speer. "We're very close to it now - it's just a matter of time of what we can do with biotechnology and biomass in next few years."

Hydrogen-powered fuel cells are also driving ahead with Canada's first permanent hydrogen refuelling station.

Launched in Ottawa last month by Air Liquide Canada as part of the ongoing Hydrogen on the Hill project, the station will supply three hydrogen-powered buses operating on Parliament Hill.

It's the first step in building the massive infrastructure necessary for public access to this gasoline alternative. With all the major automakers working on fuel-cell vehicles and many prototypes already on the road, proponents say it's just a matter of time before the cost comes down and hydrogen takes off.

"The cars are expensive today because they're only making 10 to 100 units - they're not making large quantities, so once they make large quantities the price will come down," says Pierre Gauthier, Air Liquide Canada's director of hydrogen energy.

Some estimates say we can expect mass production of fuel-cell vehicles by 2012 or 2015, but experts say that's unrealistic - especially when you consider the lack of infrastructure.

"I'm not going to buy a car that I can't expect to fuel, so you have this very hard chicken-and-egg problem - no one will buy the cars unless there's refuelling infrastructure and no one will build the refuelling without the cars," says Keith.

"It's a slow process and if you think there's a five-year transition to hydrogen cars, there's a greater chance aliens will land."

In the meantime, commercialization in niche markets is accelerating into high gear. Ballard Power Systems in Vancouver, Canada's largest hydrogen fuel-cell company, signed deals recently to provide its technology for forklifts and back-up power.

"You have to find nearer markets where you have commercialization sooner," says Ballard spokeswoman Rebecca Young. "It's the same technology and putting the technology into those applications today will help drive the technology forward as a whole and will help bring it to cars."

While fuel-cell cars are still several years away, Ballard is seeing success in the lucrative bus market where infrastructure and cost are less of an issue.

In a deal worth up to US$14.7 million, Ballard will provide fuel cells for up to 20 new BC Transit buses. Rolling onto B.C. roads by the end of 2009, the buses will be showcased during the 2010 Olympic and Paralympic Winter Games before being integrated into the BC Transit fleet.

The B.C. government is also driving into the future after adding hybrid vehicles to its fleet for almost three years. Officials hope to have hybrids make up 30 per cent of the fleet by next year.

Edmonton is testing hybrid buses and the Hail a Hybrid program from Climate Change Central - a public-private partnership that encourages innovative responses to climate change - is targeting taxis in Calgary, Vancouver and Victoria.

A new breed of hybrid is also here - the hybrid electric vehicle. Electric cars failed to take off because of their short range, large batteries and difficulty charging away from home.

The hybrid electric addresses this by combining a battery-powered electric motor with a conventional engine.

With all these options, experts say it's impossible to tell what will eventually replace gasoline as our fuel of choice.

"It's a 100-year decision and I don't think we're ready to make the decision about cars yet," Keith says. "Nobody can pick what the best action is and anyone who tells you they can is either overconfident or selling something."

(Tess van Straaten can be reached at tess@businessedge.ca)