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Spring
2018
grainswest.com7
BY NATALIE NOBLE
THE
FARMGATE
POWERPLAY
RISINGENERGYCOSTSCAUSECONCERNFOR
ALBERTA FARMERS
WITH ALBERTA’S CARBON LEVY
increase to $30 per tonne from $20 at the
start of this year, energy-related operating
costs on the farm, particularly grain dry-
ing, are likely to negatively affect the farm
bottom line. Carbon levy rate increases
on propane from 3.08 cents per litre in
2017 to 4.62 cents per litre in 2018, and
on natural gas from $1.011 per gigajoule to
$1.517 per gigajoule over the year, indicate
farm heating and grain drying costs are
on the rise.
Exceptionally wet weather in 2017 in
some regions of the province had farmers
drying more and wetter grain, thus spend-
ing more money to do so. Having gone
through the two heaviest drying years he’s
experienced, Minburn County farmer and
Alberta Wheat Commission (AWC) region
four representative Kendall Freed suggest-
ed that in exchange for farmers not being
paid in full for the carbon sequestered by
their crops, the carbon levy charged on
propane and natural gas used for grain
drying be dropped.
“In most years, drying grain is unnec-
essary in my region. Since as far back as
the 1980s, I’ve never had to dry even close
to the 90 per cent I did in 2016 and 2017.
I’m drying a significantly higher volume,
and a wetter volume, too. I had canola
that had to be dried down from a moisture
level of 24. With all the moisture we’ve
had over the last two years, this may not
be uncommon going forward,” he said.
Many grain dryers used in Alberta
operate on propane, as existing natural
gas lines often can’t accommodate the
volume of fuel required. In order to switch
to natural gas, which is cheaper, farmers
must incur the expense of having new
lines trenched in. A representative from
Freed’s local gas co-op quoted him a price
of $82,000 to have a separate line run into
his farm and noted that it would not quali-
fy for government funding at this time.
The carbon levy on propane and natural
gas used for grain drying is not rebated
back to producers, and Freed noted that
GST is charged on the levy. Additionally,
the average annual West Texas Interme-
diate crude price was $43.15 in 2016 and
Photo:CanadianPropaneAssociation
Many Alberta farmers rely on propane or natural gas to fuel grain dryers. Farmers using these fuels remain subject
to Alberta’s carbon levy, which jumped to $30 from$20 per tonne at the start of the year.