THE last time I was at an anti-mining protest, there was a sign saying, “We can’t eat coal”. I couldn’t argue against that: coal is fossilised plants 200 to 300 million years old. It is well past its use-by date. But then, in another sense, we do eat coal, or at least the embodied energy that all food contains.
We could not produce the amount of food we now do without the remarkable increase in the use of energy in food production.
Agriculture directly accounts for just 2 per cent of Australia’s energy use, but so much more of what happens on-farm uses electricity indirectly.
Farm machinery takes energy to produce, fertilisers even more and many irrigation projects would not have occurred if it weren’t for the value of dams as a source of hydro-power.
Measuring the amount of ‘embodied energy’ in, say, a tonne of wheat is not an easy calculation, but some estimates have been made in the US and the UK.
They would be broadly applicable here (although the calculations depend more on the type of cropping used rather than the location).
In the US, it takes about 100kg of oil equivalent to produce a tonne of wheat. That is, 4 gigajoules in the metric measurements Australia commonly uses. What does 4GJ mean?
This amount of energy is all of the energy inputs required to produce that tonne of wheat, and different sources of energy have different prices.
It includes the natural gas used to make urea (about $5 to $10/GJ), the diesel used in tractors and harvesters ($30/GJ) and the electricity used to pump water for irrigation ($60/GJ).
Based on estimates of the relative components of these sources of energy in the production of grains, the 4GJ it takes to produce a tonne of wheat costs about $80/ tonne.
The price of wheat at the moment is about $250/t, depending on the quality.
So energy prices account for about a third of the price of wheat.
All modern food-production techniques need cheap, affordable supplies of energy to work.
That is why it was crucial for agriculture that we got rid of the carbon tax.
There has been some controversy about the cost of mandatory levies that fund research and development and joint marketing, among other things. But the carbon tax was the ultimate mandatory levy, and it delivered nothing to agriculture in return.
The impact of the carbon tax was:
● About $3-4/t for the grains industry (compared with a levy of $2.50/t).
● About $5 to $10/head for the beef industry (compared to a levy of $5/ head).
All this to pander to a misguided green ideology that we could change the temperature of the globe from Australia.
None of it helped us become better at producing our food.
Now that the carbon tax is gone, however, the other mandatory electricity levy that remains is the mandatory renewable energy target.
That target requires that a certain amount of electricity must be sourced from renewable sources each year.
The renewable energy target does put up electricity prices. It subsidises more expensive ways of energy (wind and solar) at the expense of cheaper ways (coal and gas).
Making energy more expensive makes farming more expensive in Australia. The impact of the renewable energy target increases electricity prices by about half the amount of the carbon tax – although this will likely increase as the target increases in the next few years. We have a choice in this country: we can have cheap energy or we can produce dear food.
Australia has been built on its ability to produce cheap, affordable food, and I want it to remain that way.
To do that, we need to turn our backs on the energy myths peddled by the Greens and other snake-oil salesmen.
It is time we focus on what we are good at as a nation, and try to keep getting better at it every year.
This article was originally published in the Queensland Country Life on 18 September 2014.
