Lyle Conway isn’t sure how he is going to pay for the natural gas that fuels his greenhouse as energy costs reach unprecedented levels this fall.
“My business, Qual-Tec Greenhouses, is hurting. We’ve raised our prices but not enough to cover our costs,” he said from his operation at Eckville, Alta. “We need a 30 percent increase in price in one year.”
For the flower and vegetable market that is not reasonable, he said.
Conway grows poinsettias, starter plants and specialty flower arrangements. Raising the price of his poinsettias to $7.50 a pot may not cut it this winter.
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Conway’s natural gas bills shot up from $2.38 per gigajoule last year to $6.68 this summer. He anticipates an increase to $7.20 in November. Rumors point to $8 gas this winter. Electricity costs are going up 30 percent.
These higher costs are difficult to pass on to customers in such a competitive business.
Vegetable growers are going to suffer the most, said Conway, who is president of the Alberta Greenhouse Growers Association.
Alberta greenhouses mainly produce tomatoes, cucumbers and peppers while others have expanded into crops such as cherry tomatoes, lettuce, beans and okra.
They are up against field crop growers from Mexico and producers in the Lower Mainland of British Columbia, who consume considerably less energy.
Forestry seedling growers also feel the pain of rising costs. They compete against B.C. seedling growers’ lower costs.
Besides higher utility bills, growers face increased prices for plastic goods such as plant trays, polyethylene, pots and peat. Moss companies use natural gas to dry peat moss so their prices have risen substantially.
Added to that are soaring fertilizer costs because natural gas is used to make farm chemicals.
There are more than 400 greenhouse operators in the province. During the Alberta Horticulture Congress this November, growers plan to discuss energy-efficient greenhouses.
They also plan to meet agriculture minister Ty Lund to discuss their share of the energy rebate for industrial users promised by the Alberta government last week. They are also lobbying for long-term help.
“We would like the provincial government to make it feasible for our gas co-ops to produce their own gas,” said Conway.
The gas co-operatives buy their gas on the open market. This means they compete with buyers from California and Nevada that are willing to pay more for natural gas.
“If the gas co-ops can produce their own, we’ll only have to pay for the cost of production.”
In the sunny south where the worst drought since 1936 parched crops and pastures, irrigation farmers found the cost of energy burdensome. Costs to irrigators were up by 25 percent over last year.
“Natural gas is up. Electrical costs have gone crazy too,” said Stan Klassen of the Alberta Irrigation Projects Association.
Electricity costs for irrigators were up 18 percent over last year while the commodity price of natural gas was an even greater burden.
This summer, the commodity price of natural gas was $5.35 per gigajoule, double what it was the year before, said Calgary energy consultant Henry Unryn.
Farm fuel costs also increased, according to monthly statistics compiled by Alberta Agriculture.
In July 1999, 100 litres of purple gas cost $40.46 but in July 2000 the same amount cost $53.58. Diesel fuel went from $27 to $40 for the same period. Bulk propane was up from $20 to $31 for 100 litres. These prices reflect the provincial rebate of nine cents per litre for purple gas and six cents for diesel. Natural gas went from $3.47 per gigajoule to $4.30. It had exceeded $6 by Sept 6.
The Canadian Energy Research Institute forecasts crude oil at $34 (U.S.) per barrel, fueled by the fear of a heating oil shortage this winter, particularly in the American northeast.
Members of OPEC agreed last week to increase production by about three percent, but analysts doubt the increase would have a lasting effect on crude oil prices.
