Read more insightful analysis from Terry Etam here
The winter months here in Canada create a notable hardship – the inability to a find a decent tomato. I don’t know what those things are at the grocery store that in February are called tomatoes; they taste like a picture of a hamburger. A first sign of spring is edible tomatoes appearing on the shelves, courtesy of a greenhouse near the city that emerges from hibernation as the sun rises in the sky.
This supply of high quality local produce is unavailable in winter because it costs an exorbitant amount to heat greenhouses for half the year in almost all of Canada and the northern US. It is also expensive to provide sufficient light. If one tried, it’s not feasible to pass those costs on to customers; even when $100/barrel oil caused locals to lose their fiscal minds buying Lamborghini’s but not a $10 tomatoes.
For a good part of the year we therefore import our vegetables from California and Mexico because we can’t compete cost wise. In 2015 we imported almost $1 billion worth of vegetables from California alone. In line with free-market thinking, we concentrate on growing wheat and cereal crops, utilizing our competitive advantage.
The above circumstance though is an example of the lethargic thinking that we need to reframe if we want the world to respect the petroleum industry. We’ve drifted into a comfortable groove of familiar trade routes and production habits that could use a little shaking up. One company is showing us an excellent rewiring map.
The oil patch provides a vast supply of free heat sources that could be used to warm greenhouses or generate power for artificial lighting (or anything else for that matter). We utilize almost none of it, but here is a company that has. Have a look at the brilliant project Vermilion Energy tackled in France. Using waste heat from a hydrocarbon production facility, the company has created 10 hectares/ 25 acres of greenhouses that produce 3,000 tonnes of tomatoes annually. The project has created 150 jobs.
Think about that for a second. The waste heat from one production facility created a very substantial food source and generated significant economic benefits to the region. How many similar potential sites exist across western Canada, with similar amounts of waste heat?
Concepts like these are bigger than the oil patch, or should be, and it is the sort of advanced thinking we need to adopt right here. This isn’t a government boondoggle like the legendary Newfoundland greenhouse built by the government to grow cucumbers; it unsurprisingly followed the trajectory of a faulty rocket as great government ideas often do. This is an entirely different beast, built on a cost advantage and not the opposite. This isn’t to say governments should have no role; it would be very helpful to see regulations modified that would encourage such projects. There might even be the potential to utilize otherwise unproductive oil and gas lease sites to capture the near-free energy source, if the circumstances of a particular site warranted.
What would it mean to our economy, particularly in western Canada but elsewhere too, if we supplanted significant foreign supplies of fruits and vegetables? What would it mean for our industry to be providing this higher quality healthy food at a lower cost (no transportation from California, and no US dollar expenses)?
The benefits are off the charts, and are everywhere. The waste heat currently adds almost no value; utilizing that energy source would turn a waste product into jobs and tax revenue. In addition, year round greenhouses would provide cheaper, better, fresher food. It would help our nation’s balance of trade and lessen our dependence on foreign countries for food, which is a goal any self-respecting country should be interested in.
Of almost equal importance would be the byproduct of completely redefining the image of Canada’s petroleum industry. Actions count, and at this stage of the game our industry needs offense and not defense. Defense is inefficient and almost pointless because it is only reactive to negative information campaigns, and in the speedy world of social media it works just as Mark Twain said – a lie can travel half way around the world while the truth is putting on its shoes.
Our industry traditionally stands earnestly with presentations and statistics, fully armed and ready to rebut opponents in a rational debate, like a concerned citizen standing outside the gates of the Calgary Stampede with a stack of leaflets proving that alcohol consumption is bad for the health. You’ll convince no one and achieve nothing except getting vomit on your shoes.
Similar greenhouse projects could be genuinely viable businesses built on a low-cost advantage, not a government-bred fiasco based on wishful thinking. Although, if a government was ever going to incentivize anything, projects like this makes infinite sense.
The benefits are huge and multifaceted, while the downside…I can’t even think of a downside. This is the sort of low hanging fruit (sorry) that the energy business needs to start plucking, and should want to start plucking – it’s got to be a lot more fun to do this than try to win unwinnable arguments with people who won’t listen.
Read more insightful analysis from Terry Etam here