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October 09, 2005
The natural gas problem
Since Hurricanes Katrina and Rita hit the US, the general media has been making a major issue about the effect on natural gas prices and what that means for heating homes this winter. All of this is true except for the fact that they are probably guessing about the cost. I have heard estimates of 30 to 70% increases. I will tell you that in California, Pacific Gas & Electric raised natural gas rates this month from 0.99 per therm to 1.68. That is the 70% increase they were talking about.
What they are not talking about is the fact that a significant amount of the nitrogen fertilizer used in North America is sourced from natural gas.
Prowling around the internet today, I found this statement in testimony before the House Committee on Energy and Commerce.
My purpose today is to discuss the devastating impact that the sharp rise in natural gas prices is having on both the fertilizer industry and on the American farmer. -- Mr. Glen Buckley Chief Economist, CF Industries.
The problem with Mr. Buckley's testimony is the fact that this was in 2001. However, he was right. In the production of Ammonia fertilizers, natural gas is 75 to 90% of the total cost of production. The cost to farm is going up again, as is the cost of everything we buy at the supermarket.
The news is not telling us that. The House Committee on Energy and Commerce is not even looking at it. All that the House is doing is fighting over who gets a new refinery. Anyone want to bet on Texas? The Committee Chair is Joe Barton.
This is another case where politicsians and the media just don't believe that rural people vote, or that they know which way they will vote (red state?). So, they figure that they can ignore it, which they will, until the prices of corn, wheat, cotton and everything we eat go up next year or more family farms are lost. Then they will wonder how it happened when they were not looking.
Posted by Wes at October 9, 2005 06:36 AM
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Comments
The fact that rising natural gas prices are leading to higher costs for fertilizers is another clear indicator that we need to move as quickly as possible to smaller, organic farms. If the scenario plays out as predicted, we're all going to be seeing grocery-bill-shock next year.
Since our government (at all levels) seems to be ignoring this facet of the energy crisis, how can Rural Greens call attention to the problem and our ideas for addressing it?
Posted by: Linda Cree at November 25, 2005 11:57 AM