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Cut natural gas demand: Farm Bureau supports Clear Skies

Congress should pass cleaner, leaner air quality regulations to help reduce demand for natural gas and lower the cost of fertilizer and fuel for irrigation systems, a national farm group says.

Current energy regulations force energy users such as electric-generating plants to switch to natural gas at different times of the year. The higher demand that results forces all users of natural gas, including fertilizer manufacturers, to pay higher prices for the feedstock.

Farm Bureau leaders say the Clear Skies initiative to reform the Clean Air Act would help farmers by removing pressure on natural gas supplies, thus lowering agricultural production costs. AFBF expressed its support for the initiative in a statement to the Senate Environment and Public Works air quality subcommittee.

“The increasing price of natural gas has been the single most significant factor adding to energy costs for American farmers and ranchers, and the Clear Skies initiative would stabilize the demand for natural gas,” said Bob Stallman, Farm Bureau president.

Farm Bureau estimates increased energy costs, reflected in the price of farming and ranching inputs during the 2003 and 2004 growing seasons, added more than $6 billion to the cost of producing food and fiber in the United States. The Clear Skies initiative would require less switching to natural gas.

“Current burdensome, out-of-date air quality regulations exert constant pressure on natural gas supplies,” Stallman explained. “This artificially drives up demand and encourages fuel switching from other energy sources by manufacturers and even power companies.”

The fertilizer industry relies heavily on natural gas as the main “feedstock” for producing virtually all commercial nitrogen fertilizers used in the United States.

“The price of natural gas accounts for 90 percent of a farmer's total cost of anhydrous ammonia fertilizer,” Stallman said. “Industry figures show that anhydrous ammonia cost farmers about $100 per ton in 2000, but during last year's growing season the price averaged $350 or more per ton.

“And the high natural gas costs forced some domestic anhydrous ammonia producers to shut down, making U.S. farmers more dependent on foreign fertilizer suppliers.”

The American Farm Bureau Federation also supports Clear Skies to help reduce air pollution faster, cheaper and sooner than the current regulatory structure, according to Stallman. As noted in the submission to the Senate subcommittee, AFBF supports updating and reforming current federal air quality laws to allow:

  • Use of new, cleaner energy production technologies.
  • Stabilizing the demand for natural gas.
  • Reducing dependence on foreign energy sources.
  • Improving air quality without sacrificing economic productivity.

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