NCGA Calls on Congress to Increase Natural Gas Production (6-20-03)
The National Corn Growers
Association (NCGA) this week urged legislators to examine policies
that would increase the nation’s supply of natural gas.
Appealing to lawmakers
to make a commitment to increase natural gas production, NCGA sent
letters to Senate
Energy and Natural Resources Committee Chair Pete Domenici (R-N.M)
and members of the House Subcommittee on Energy and Mineral Resources,
which held a hearing on the issue Thursday. NCGA also sent a letter
to U.S. Department of Energy Secretary Spencer Abraham.
“The corn industry
becomes more energy efficient every year, but we still must have adequate,
reliable and affordable natural gas to fuel this dynamic industry,”
wrote NCGA President Fred Yoder to subcommittee members. “Nitrogen
fertilizer, a key input for the bountiful yields achieved by U.S.
corn farmers, is made from natural gas. Additionally, corn farmers
use natural gas to run irrigation pumps and dry grain.
“Recent increases
in natural gas costs have had major impacts on all members,”
continued Yoder.
Energy demand has skyrocketed
in recent years because of utilities shifting to natural gas
to meet clean air requirements, which is required by Congress.
Growers use natural gas
as an energy source, primarily in the form of fertilizer. It also
is the primary building block of nearly all commercial nitrogen fertilizers.
The most commonly used fertilizer is anhydrous ammonia, which is used
directly in the soil. Natural gas also is used as a feedstock for
all other forms of fertilizer, such as urea, ammonium nitrate and
nitrogen solutions. Because natural gas is the only economically feasible
raw material used in producing fertilizer, it is the largest cost
component, accounting for more than 90 percent of the cash cost of
production.
According to the U.S. Department
of Agriculture, farm gate prices for fertilizer have jumped to near
record-high levels. On average, the price for ammonia was $373 per
ton this spring compared to $250 per ton a year ago. Urea prices climbed
from $191 to $261 per ton, and UAN prices from $127 to $161 per ton.
This translates into a $10 to $15 cost per acre increase for a typical
grower.
“Natural gas use
and uses are increasing; however, we cannot sustain increases in the
use of natural gas without the commitment to produce natural gas,”
concluded Yoder. “There are many indications that our nation’s
economy and national security will be seriously impacted should we
not take immediate actions to produce domestic natural gas for this
growing demand.”
To read the NCGA
Natural Gas letter in its entirety, click here.
To read the NCGA
Fertilizer letter in its entirety, click here.
To read the NCGA
letter to Senator Domenici in its entirety, click here.