Will Senate Climate Bill Impact Nitrogen Prices?
May 12, 2010
Sens. John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.) unveiled The American Power Act (APA), the Senate's version of the Climate Bill, this afternoon. The Fertilizer Institute doesn't much like it, it appears.
In a statement released to the media this afternoon, TFI President Ford West says the bill includes several provisions to help utilities switch to natural gas for electricity production. With nearly 90% of the production costs for nitrogen fertilizer tied directly to natural gas, and with nitrogen being a major component of phosphates, the group says this could push fertilizer prices through the roof.
A portion of the statement reads:
“Despite the bill authors’ stated intent to offset natural gas rate increases for industrial users, its design fails to protect the fertilizer industry from the threat of fuel switching since our natural gas feedstock purchases are not made through a local distribution company,” stated West. “Congress must keep in mind that fertilizer is a crucial food security resource that is responsible for 40 to 60 percent of the world’s food supply. Essential industries, such as fertilizer, will be severely challenged by climate policy that does not address our unique sensitivity to the price and availability of natural gas. It is vital that Congress develop climate change legislation that will preserve the fertilizer industry and many other U.S. manufacturing sectors’ ability to remain viable in a very competitive global market.”
Funny, they didn't include anything from TFI on the APA's What They're Saying page on Senator Kerry's Web site.