November 11, 2008

More greenhouses turn to coal for heat

ENVIRONMENT/CANADA - It will be a difficult winter for greenhouses. Growing vegetables in a glasshouse is much more expensive when the outdoor temperature slides below zero. Tomatoes, peppers and eggplants need heat to thrive, and the cost of supplying that energy will impose a heavy toll this winter on Ontario's world-class greenhouse sector.

"Our fuel is up probably 40 per cent versus last year," says Rob Mastronardi, who for four years has operated Cedar Beach Acres in Kingsville, Ont. For him, growing greenhouse vegetables goes back four generations. It's in his blood.

But the high cost of fuel, combined with the impact a volatile Canadian dollar is having on exports, has his blood boiling. "It's just a hellish economy out there right now. We're suffering just like the auto sector is suffering, but we're not getting any attention at all," he says.

Not that it's a lightweight sector. The province's greenhouse industry is the largest in North America for vegetable production.

Including floriculture, it employs 17,300 full- and part-time workers across 1,200 operations. Sales in 2007 reached about $1.25 billion, with a 40-60 split between vegetables and flowers respectively, according to the Ministry of Agriculture, Food and Rural Affairs.

"The Ontario greenhouse sector is a major contributor to the provincial economy and is worthy of support and promotion," according to a 2006 economic impact study commissioned by the Ontario Greenhouse Alliance.

But that support is lacking, says Mastronardi, who is glum about his industry's prospects. "In these market conditions, our days are definitely numbered."

Left to their own devices, he says, many operators are being forced into survival mode. For some, that means burning the cheapest and dirtiest fuel available: Coal.

Mastronardi says his greenhouse uses about 110,000 gigajoules of heat energy a year. Based on mid-summer fuel prices, he figures he would save between $500,000 to $700,000 annually in energy costs by switching from natural gas to coal. He began burning coal earlier this year but has so far resisted making it his primary fuel.

No. 6 "Bunker C" oil, a heavier fuel oil that's often used instead of natural gas, is also falling out of favour. The price of crude oil has been highly volatile and, though it has fallen over the past four months, is still well above its 10-year average. The International Energy Agency predicted last week that oil prices will average more than hundred dollars/barrel between now and 2015.

"It's just outrageously priced," Mastronardi says. "I probably won't burn Bunker C at all this winter."

Again, that leaves coal.

Dozens of other greenhouse operators in Ontario – clustered around the flower-dominant Niagara region and vegetable-dominant Essex County – have switched or are considering a transition to coal as a way to save on fuel costs.

The impact so far appears small, but the trend is gaining momentum. As it does, it could undermine the environmental benefits of an Ontario government plan to wean the province off coal-fired power generation by 2014.

"Coal is expanding in the province, despite a policy to phase out coal," says Roger Samson, executive director of REAP-Canada, an independent group that encourages sustainable farming practices. "The Ontario government has no plan on how to mitigate this."

How much coal, potentially, are we talking about? The energy demands of a typical greenhouse are enormous. Shalin Khosla, a greenhouse specialist with the agriculture ministry, says anywhere between 35 per cent to 50 per cent of the costs of operating a modern vegetable greenhouse goes toward energy consumption. The figure is closer to 20 per cent for flower growers.

It's estimated that greenhouses in Ontario cover 2,823 acres, and that the average greenhouse requires 9,500 gigajoules of energy per acre every year. This works out to 26.8 million gigajoules annually.

Convert that energy into electricity potential and it works out to 7.44 terawatt-hours a year – more than three times the 2004 electricity output of the Lakeview coal-fired generating station in Mississauga (which has since been closed down and demolished).

That's equivalent to more than one million tonnes of coal being burned annually.

It's a mathematical exercise that raises a serious public policy question: What's preventing the entire greenhouse industry from moving to coal, and in doing so, undermining the spirit of the McGuinty government's coal phase-out strategy?

Not much, it appears. Unlike power plants and other major industrial facilities, greenhouses can burn whatever fuel they want without much scrutiny.

Cement plants and fossil-fuel power stations require a certificate of approval from the environment ministry to burn coal.

But that's not so for greenhouses.

"Greenhouses are exempt because they're considered to be agricultural operations," says John Steele, a spokesman for Ontario's Ministry of the Environment. "Under the EPA (Environmental Protection Act), those operations are exempt from the certificate of approval process."

And because they have an exemption, he adds, "we don't know what they're doing."

Keith Stewart, an energy expert with WWF-Canada and author of a book on Ontario's electricity system, calls the situation "perverse" and a reflection of inconsistent government policy.

"Outdated energy policy is giving us coal-fired tomatoes," he says.

The issue has also caused concern in British Columbia's Fraser Valley Regional District, which has a greenhouse industry ranked second in Canada behind Ontario.

Barry Penner, B.C.'s environment minister, acknowledged the problem in a March 27 letter to district chair Clint Hames. But Penner said a new carbon tax in the 2008 B.C. budget "will send a signal that less greenhouse-gas-intense fuels should be considered."

No such tax exists or has been proposed in Ontario. If it did exist, it might help Don Nott, a switchgrass grower in Clinton, about 100 kilometres west of Kitchener.

Nott decided a few years ago to start growing fast-growing switchgrass on 300 acres of land. He figured he could make a better business out of harvesting the grasses, grinding them up, and packing them into carbon-neutral "biopellets" – a renewable fuel. Burning such pellets for fuel wouldn't be penalized by a carbon tax.

Back in 2006 about 14,000 tonnes of the pellets were burned for fuel, much of it in greenhouses that were experimenting with alternatives. "We had 30 different individuals burning our product at one time, of various sizes from small up to 30 acres," says Nott.

But when oil and natural gas prices began to rise, the greenhouses couldn't afford to experiment any longer. "It's gone down to nothing. There's just one guy left who's willing to burn it. Most of those guys have switched over to burning coal."

With 400 tonnes of switchgrass sitting in storage waiting for a market, Nott has pretty much folded the business.

"When they said they were going to burn coal, I said I'm out."

Most greenhouse operators that have turned to or are considering burning more coal aren't proud of it. They know it pollutes more, but escalating costs have left those in the industry with few choices.

"In my eyes the government is moving at an absolute snail's pace regarding this energy crisis in our industry," Mastronardi says.

"If they want us to survive, we're going to need help."

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