The Fertilizer Institute last week stepped up its pressure on Congress to enact industry-friendly climate change legislation, first by participating in a briefing about climate change policy held by the House Agriculture Committee Legislative Assistants on May 18, and following that with a letter to House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) outlining the industry’s concerns with certain climate change proposals currently under consideration.
The May 18 panel discussion was organized as a follow-up to an information gathering questionnaire conducted by House Agriculture Committee Chairman Collin Peterson (D-Minn.). Speaking on behalf of TFI members, William Herz, TFI’s vice president of scientific programs, said Congress should carefully assess the design of a carbon reduction program and take into consideration fertilizer’s role in food production.
“Fertilizer is an energy intensive industry and segments of the fertilizer industry are both greenhouse gas (GHG) or energy intensive and trade intensive,” Hertz said. “As a result, our farmer customers – the nation’s agricultural producers – must be an integrated part of the offset market.” Herz said the fertilizer industry has achieved great energy efficiency reductions over the last 20 years and is committed to reducing its environmental footprint, but is currently approaching a theoretical maximum in energy conservation that is limited not by ingenuity or technology, but by the laws of chemistry.
“Low cost opportunities to produce nitrogen fertilizer exist in nations with inexpensive natural gas, reduced labor and environmental costs, and most importantly relaxed or no climate change policies in place or on the horizon,” he said. “As such, moving more fertilizer production overseas to less efficient producers would actually have a negative effect on global GHG emissions and climate change. This represents the worst possible scenario: a net increase in GHG emissions and the loss of thousands of high-paying domestic jobs.”
Herz highlighted industry successes in reducing emissions, including low-till or no-till farming techniques and best management practices that reduce nitrous oxide emissions from the field. “TFI believes that any future climate change policies should reward farmers for the use of these science-based practices utilizing the 4R nutrient stewardship system,” Herz said. “This site-specific, science-based system has received the support of the American Society of Agronomy’s Certified Crop Advisor program and, in addition to protecting the environment, ensures that farmers achieve profitability, while providing a sustainable food supply.”
On May 19, TFI President Ford West sent a letter to Rep. Waxman criticizing a proposed climate change allowance allocation program, which is designed to provide transition assistance to energy-intensive industries by helping to cover increased costs related to climate change programs. West said the program’s allowances to the fertilizer industry would not be sufficient to ensure global competiveness for U.S. fertilizer producers.
“Absent dramatic changes, the current allocation program will render the U.S. nitrogen industry uncompetitive, and threatens to force fertilizer production overseas to countries that do not regulate emissions, resulting in a loss both for the economy and for the cause of reducing CO2 emissions,” he said.
West highlighted fertilizer’s role in food production, stressing that fertilizers are responsible for 40-60 percent of the world’s food supply and that global food security cannot be attained without the use of commercial fertilizers. Noting that natural gas accounts for 70-90 percent of the cost of producing nitrogen fertilizer, West said natural gas pricing and volatility since the late 1990s has resulted in the U.S. fertilizer industry permanently closing 26 nitrogen plants, with U.S. farmers now relying on imports for 55 percent of their nitrogen fertilizer needs.
West said that between 1983 and 2006, the U.S. fertilizer industry reduced the amount of natural gas used to produce a ton of ammonia by 11 percent, with EPA estimating that U.S. nitrogen producers reduced GHG emissions by 4.5 million tons of CO2 equivalent from 1990 to 2006. “Unfortunately, the U.S. fertilizer industry is given no credit under the Waxman bill for the impressive early action it took to reduce its carbon footprint,” the letter states.
West warned that once aggressive GHG emissions policies are enacted domestically, the U.S. fertilizer industry “will be placed in a severe competitive disadvantage” to producers from countries with no carbon reduction policies or countries where governments have adopted or drafted policies that aim to fully protect their energy-intensive/trade-intensive industries, including fertilizer. “U.S. producers will face a stark choice of losing market share to imports or moving production overseas – neither choice is good for the U.S. economy, the environment or U.S. food security,” he said.
“The U.S. fertilizer industry provides high paying jobs to hardworking Americans in manufacturing plants, retail and wholesale businesses and in a host of related industries such as rail, barge and truck transportation,” the letter concludes. “It is therefore critical that any climate change policy does not jeopardize the domestic fertilizer industry that is such a vital link in food production, food security and the U.S. economy.”