NYMEX crude prices have risen more than $23 per barrel (61 percent) from a year ago. In recent days, oil prices have traded at levels not seen since crude futures began trading in 1983. As a result, prices for other petroleum products, such as heating oil and gasoline, have increased as well.
Given the recent widespread dry conditions across much of the Mid-South, irrigation costs are being heavily influenced by fuel prices. Considering the current level of petroleum prices, some operating cost savings may be realized from electricity. The accompanying table uses current energy prices to illustrate an hourly operating cost comparison for a 50-horsepower unit.
The table provides an estimate for seasonal operating costs associated with irrigation pumping. The estimates do not consider such factors as initial investment cost and convenience.
The table illustrates the average cost per hour based on the fuel/energy cost per unit. For example, using a current diesel price of $1.79 per gallon equates to an operating energy cost of $4.83/hr (2.7 gph × $1.79/gal = $4.83/hr).
Cost of routine maintenance, such as oil, filters, and grease varies given the type of power unit, and is calculated as a percent of the operating energy cost.
Using an average 15 percent maintenance factor for diesel power units results in an additional $0.73 per hour in operating costs ($4.83 × (1 + 0.15) = $5.56).
Given the information in the table and the outlook for crude oil prices, some growers may be considering a conversion to electricity or weighing all their energy options for future irrigation investments. Electricity is a popular choice because of its relatively low maintenance requirements and quiet operation, a consideration when a farm is located near a residential area.
However, there are a few other factors to consider when selecting electricity as an energy source.
First and foremost when considering electric power as an energy alternative, one must determine if three-phase power is needed. Most power suppliers will limit you to 10 or 15 horsepower on single-phase lines. In many cases, more horsepower will be required for irrigation wells.
If three-phase power is not readily available near a projected well site, the cost to run power lines can be significant. If electric power is not readily available or is cost prohibitive, diesel-powered or natural gas-powered engines would be good choices.
Some electricity providers require that service be interruptible or shut off for a few hours each day during peak demand periods.
Other costs to consider include hook-up fees and monthly minimum service charges in addition to the cost for actual electricity usage. These costs can vary from one service provider to another.
Comparing operating costs is a key consideration in selecting an energy source for irrigation pumping. But questions regarding energy availability, convenience, and maintenance must also be considered as part of an overall irrigation investment decision. Contact your state Extension service personnel for assistance and advice.
Scott Stiles, Rob Hogan and Kelly Bryant are University of Arkansas Extension economists. Comments or questions? Call 870-460-1091 or e-mail [email protected].
|Fuel/energy source||Fuel/energy use||Fuel/energy unit cost||Operating energy cost||Average maintenance cost as percent of energy cost||Total operating cost per hour|
|Natural gas||5.0 ccf/hr||$0.770||$3.85||12.5%||$4.33|
|Electric wells: Con is conventional above ground. Sub is submersible.|