NCGA, Coalition Partners Call on Lawmakers to Address Natural Gas
Crisis (01-10-05)
In comments submitted
last week to the Senate Energy and Natural Resources Committee,
the National Corn Growers Association (NCGA) and 26 other agriculture-related
groups known as the Ag Energy Alliance said steadily increasing
natural gas prices are significantly impacting the profitability
of U.S. farmers.
In December, Committee
Chairman Sen. Pete Domenici (R-N.M.) issued a request for comments
and legislative proposals that offer long-term solutions to the
looming natural gas supply and demand crisis. Corn production requires
considerable amounts of natural gas; it’s used as a primary
feedstock for fertilizer, as well as an energy source for powering
irrigation pumps and grain dryers.
In the Jan.7 comments,
the groups state, “The agricultural community’s ability
to be efficient and environmentally friendly farmers will face huge
obstacles if the nation cannot come to grips with its desire to
have limitless resources, like natural gas, for production and not
realize that these resources have to come from somewhere.”
The comments call for
the need for better policy with regard to natural resources, stating
action must be taken to expand all sources of domestic energy to
meet growing demand for natural gas.
In addition to addressing
domestic natural gas supply, the comments also addressed using on-shore
and off-shore resources; liquefied natural gas issues; natural gas
infrastructure and legislative and regulatory policy implementation;
environmental challenges and barriers; diversification and conservation;
tax incentives, encouraging more investment in natural gas supplies
and infrastructure, and natural gas market data.
NCGA Public Policy Director
Samantha Slater said the nation’s economy and energy security
will be seriously impacted if lawmakers do not take action to expand
all sources of domestic energy to meet growing domestic demand.
“Our ability to produce food and fuel for our nation and the
world depends on sound energy policy,” Slater said. “Agriculture
can play an important role in helping to solve our nation’s
energy problems through the production of domestic liquid fuels,
such as ethanol and biodiesel.”
NCGA advocates congressional
passage of a comprehensive energy bill that not only addresses the
natural gas crisis, but also includes a Renewable Fuels Standard.
“We urge Congress
to act expeditiously to promote the development of domestic energy
resources to help secure future economic growth for our nation,”
Slater said. “Congress needs to enact a comprehensive energy
policy now that provides an enhanced role for renewable energy sources,
further development of all energy resources for a more diverse portfolio,
and environmentally sensitive production of adequate domestic supplies
of natural gas.”
According to the U.S.
Department of Agriculture (USDA), farm gate prices for fertilizer
have jumped to near record-high levels, rising in parallel with
natural gas prices. Nitrogen fertilizer prices in the Midwest have
increased by approximately $20 per acre since 2000.
Climbing natural gas
prices in the United States have caused domestic nitrogen fertilizer
producers to severely curtail production. Of the 16.5 million tons
of nitrogen capacity that existed in the U.S. prior to 2000, almost
20 percent has been closed permanently. Another 25 percent is at
risk of closing within the next two years. Lower natural gas prices
in Europe, Asia and South America make it difficult for U.S. nitrogen
fertilizer producers to compete with foreign nitrogen fertilizer
producers who could buy natural gas at lower prices and export their
products to the United States.
“Our growers need
access to affordable and reliable sources of energy and raw materials
so they can use the fertilizers necessary to produce an abundant
and affordable food supply. This is essential to the corn industry,”
said Slater. “Our growers are experiencing higher production
costs and marketability challenges and will continue to do so until
we see a comprehensive policy that will alleviate the natural gas
concerns.”
The alliance stated that
increasing domestic supplies of natural gas will require opening
additional federal lands and Outer Continental Shelf areas to oil
and gas exploration and production; assure that these areas have
access to the necessary pipeline infrastructure to bring supplies
to market; and make certain that producers have the financial incentives
to develop these vast domestic supplies. The comments also included
proposed legislative language that address the discussion topics
put forward by the committee.
Slater said Domenici’s
Jan. 24 Natural Gas Supply and Demand Conference is a positive step
toward addressing these issues. “The natural gas conference
is a great start to the much needed dialogue on the natural gas
crisis,” Slater said. “We look forward to participating
in what should be a great forum to discuss these issues with the
committee in much greater depth.”
To read the
Ag Energy Alliance’s comments and legislative proposal, click
here.