Tel Aviv — Israel’s Environmental Protection Minister, Gilad Erdan, has sent a letter to Prime Minister Benjamin Netanyahu requesting that a public committee be established to review policies pertaining to the country’s use of resources. The proposed committee will review the royalties paid to the state of Israel by Israel Chemicals Ltd. (ICL) and other companies for potash, phosphates, and other minerals. In addition, the committee would review the environmental impact of the various companies’ operations. Erdan’s request for the establishment of the committee followed the government’s approval of a deal with ICL for increased royalties and the company’s agreement to cover a majority of the cost of harvesting the salt in its ponds at the Dead Sea in order to prevent the flooding of hotels in the region. In addition, on February 12 the Israeli government approved a compromise agreement with the Tourism and Environmental Protection Ministries that will allow for the implementation of the agreement between the state and ICL. Under the terms of the agreement, the Finance Ministry has agreed to allocate $250 million over the next five years for rehabilitation of the Dead Sea.
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Environmentalists seek special tax on ICL profits
Tel Aviv — The Israeli government said that it has not forgone its right to determine through legislation a special tax on Israel Chemicals Ltd. (ICL) excess profits. The state made its position clear in response to an appeal by the country’s leading environmental lobby, the Israel Union for Environmental Defense (IUED). The IUED lodged an appeal against the government’s agreement with ICL, arguing that the agreement did not go far enough. The lobby said that the level of royalties set in the agreement was far too low in comparison to the new tax regime for the oil and gas sector. In addition, the lobby said that the harvesting issue was totally separate and should in no way be linked to royalties on potash extraction. In its response, the government said that at this stage it had no plans to initiate legislation and will not support any private initiatives on the matter. Under the terms of the agreement ICL will cover 80 percent of the cost of harvesting the salt from the Dead Sea’s southern basin in order to prevent the flooding of nearby hotels. In addition, royalty payments are to be increased from 5 to 10 percent. The cost of the operation is estimated at over $1.3 billion. The state also noted in its response that ICL could decide to renege on its commitment if the government decides to set a higher level of royalties through legislation. The state also asked that the appeal be rejected. The court is due to decide on the matter in the coming weeks.
Intrepid potash 4Q volumes off, income up
Intrepid Potash Inc. reported a 15 percent decrease in potash sales volumes in the fourth quarter ending Dec. 31, 2011, although net income was up 37 percent. Net income was $24.9 million ($.33 per diluted share) on sales of $104.6 million, compared to the year-ago $18.2 million ($.24 per share) on sales of $96.1 million.
“Despite the demand deferral that we saw in the fourth quarter, our sales team was able to capitalize on the available opportunities because of our strong customer relationships,” said Bob Jornayvaz, Intrepid executive chairman of the board. “Our capital investment plans remain ambitious and we are confident, based on our track record, that we will continue to efficiently execute on these projects and thereby enhance our capacity to grow our production and to serve our customers. We firmly believe that, as spring moves closer, the farmer will not be asking if he should apply potash but how much to maximize his yield and take advantage of strong commodity prices and low grain inventories.”
Fourth-quarter potash gross sales were $94.7 million with volumes of 183,000 st and an average net realized sales price of $497/st, compared to the year-ago $88.6 million, 216,000 st, and $386/st, respectively. The average potash gross margin (exclusive of costs associated with abnormal production) was $230/st, up from $169/st.
Fourth-quarter Trio gross sales were $9.9 million with increased sales volumes of 28,000 st and an average price of $287/st, which compares to the year-ago $7.6 million, 27,000 st, and $222/st. Trio gross margins were $42/st, up from the year-ago $38/st.
Full-year net income more than doubled, to $109.4 million ($1.45 per share) on sales of $442.9 million, from 2010’s $45.3 million ($.60 per share) and $359.3 million, respectively.
Full-year potash gross sales were $392.3 million on volumes of 793,000 st with an average price of $472/st, compared to 2010’s $312.1 million, 810,000 st, and $363/st. Potash gross margins were $235/st, up from $129/st.
Full-year Trio gross sales were $50.6 million, with volumes of 173,000 st and average prices of $236/st. Comparable numbers for 2010 were $47.2 million, 204,000 st, and $174/st, respectively. The average gross margins for 2011 and 2010 were both $11/st.
Intrepid released preliminary figures for 2011 in January (GM Jan. 23, p. 1).
Florida bill introduced as alternative to EPA numeric nutrient rules
U.S. Senator Marco Rubio (R-Fla.) on Feb. 16 introduced The State Waters Partnership Act, a bill that, according to a Rubio announcement, “would force the U.S. Environmental Protection Agency (EPA) to adopt Florida’s science-based numeric nutrient criteria on water quality regulation” and “stop EPA’s regulatory interference in Florida.”
A Rubio press release said the bill would ensure that Florida maintains the primary role for establishing and implementing water quality standards in the state, and would compel EPA to formally accept a state numeric nutrient rule (HB 7051) that passed both the Florida House and Senate by unanimous votes earlier this month.
“Florida has one of the most aggressive water quality protection programs in the nation implemented by the people who know our state best, and it’s time the EPA stop bullying us into accepting another Washington-contrived mandate that would devastate job creation.,” Rubio said. “This legislation simply reaffirms that states and the federal government should be partners in making sure our water is clean, and prevents Washington overreaches from harming our economy. The EPA needs to step back and realize that Florida will not simply stand by as their policies negatively impact Florida’s consumers, agriculture producers, municipalities, small businesses and other job creators.”
Florida’s HB 7051 is supported by agriculture, industry, and utilities as an alternative to EPA imposed numeric nutrient criteria for the state. Unlike the federal standards, the state measure requires a study to determine if pollutants are actually causing biological harm in a particular water body before any enforcement action can be taken. Gov. Rick Scott has expressed support for the bill and is expected to sign it into law. A five-day administrative law hearing is scheduled to begin Feb. 27.
“This legislation would save up to 14,500 Florida agriculture jobs while building upon the tremendous successes already achieved on the state level to keep our water clean,” said Rep. Steve Southerland (R-Fla.), the bill’s House sponsor. “I look forward to working with Senator Rubio to ensure that, when it comes to strengthening the health of our waterways, Floridians come first.”
Numeric nutrient limits have been a hot-button issue for industry and agriculture, with both The Fertilizer Institute (TFI) and The Agricultural Retailers Association (ARA) condemning proposed EPA standards in Florida and the Chesapeake Bay region as being over-reaching, too costly, and lacking sound science.
EPA had been engaged in something of a public relations campaign in response to the heated opposition from industry and agriculture to its proposed numeric nutrient limits. According to the Des Moines Register, a regional EPA director told agribusiness officials in Iowa that the agency would not impose numeric standards for nitrogen levels in Iowa’s waters that could impede the use of nitrogen fertilizer.
At the Agribusiness Association of Iowa’s annual Agribusiness Showcase and Conference in Des Moines Feb. 7-8, EPA Official Karl Brooks told conference-goers that EPA’s proposed nutrient regulations for Florida and the Chesapeake Bay “have little application for row crop farming in Iowa,” and that EPA wants to work with farmers “to find common ground” rather than resort to divisive rhetoric “that sounds good on talk radio.”
In response, TFI’s Kathy Mathers noted that Iowa has already moved forward with water quality standards that establish total maximum daily loads (TMDLs) for pollutants, which are determined on a site-specific basis. “The state is already taking a number of steps, water body by water body,” she said. “There’s already a lot going on in Io
The Week in Fertilizer Stocks
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 82.25 | 82.81 | 96.75 |
| CF Industries | CF | 175.89 | 185.73 | 144.84 |
| Intrepid Potash | IPI | 25.38 | 25.39 | 39.28 |
| Mosaic | MOS | 55.50 | 56.00 | 86.27 |
| PotashCorp* | POT | 45.88 | 45.87 | 61.51 |
| Terra Nitrogen | TNH | 202.25 | 213.25 | 108.78 |
| CVR Partners | UAN | 28.92 | 29.33 | N/A |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 41.96 | 42.84 | 48.83 |
| Deere & Co. | DE | 83.11 | 87.93 | 93.96 |
| Scotts | SMG | 47.94 | 51.12 | 52.23 |
| * represents three-for-one stock split | ||||
Spot Barge Prices
EPA agrees to delay numeric nutrient rules in Florida; federal judge intervenes
The U. S. Environmental Protection Agency (EPA) on Feb. 17 agreed to delay the implementation of federal numeric nutrient regulation on Florida waters. The EPA rules for Florida have been sharply criticized by agriculture, utilities, and industry groups, including The Fertilizer Institute and the Agricultural Retailers Association, who view the federal standards as too costly, over-reaching, and lacking sound science.
The EPA decision, which pushes the deadline for implanting federal water quality rules in Florida back from March 6 to June 2, came one day after Florida Gov. Rick Scott signed state legislation (Senate Bill 2060 / House Bill 7051) that proposes water quality rules developed by the Florida Department of Environmental Protection (FDEP) as an alternative to the EPA standards.
On Feb. 18, however, a federal judge in Tallahassee ruled that the March 6 deadline for enforcement still stands, at least for some aspects of the EPA standards. According to the Associated Industries of Florida (AIF), U.S. District Judge Robert Hinkle’s ruling upheld the EPA numeric nutrient standards for Florida’s lakes and spring, but tossed out EPA’s standards for Florida streams and rivers as “arbitrary and capricious.”
Environmental groups and industry both claimed victory with the federal judge’s ruling. “It was a victory on everything we wanted, except for a few technical details,” said Andrew McElwaine, president and CEO of the Conservancy of Southwest Florida in Naples, one of several environmental groups that have challenged the state’s proposed alternative to the EPA standards.
But an AIF statement countered by claiming the judge’s ruling actually supports “the position that Florida knows how best to manage its own waters.”
“The ruling issued by United States District Judge Robert Hinkle upholds the EPA lakes and springs standards that closely align with Florida’s established Numeric Nutrient Criteria,” AIF said. “However, the Court found the EPA’s conflicting standards for our streams and rivers to be arbitrary and capricious as the EPA administrator did not base criteria for rivers and streams on sound science or demonstrate that any levels other than that which she established were certain to be harmful to the flora, fauna’ and other elements of the environment.”
Added AIF spokesman Ryan Bantill, “It is important to remember the mandate for streams and rivers reflects a significant part of the waters that would fall under regulation. You can’t put into effect mandates ruled ‘arbitrary or capricious’ and invalidated by a federal judge.”
An administrative law hearing is scheduled to begin on Feb. 27. The water quality rules proposed by FDEP and signed by Gov. Scott are supported by agriculture and industry, but opposed by environmental groups who prefer the more stringent EPA criteria. Unlike the federal standards, the state measure requires a study to determine if pollutants are actually causing biological harm in a particular water body before any enforcement action can be taken.
According to one of the bill’s Senate sponsors, the FDEP rules are “more scientifically defensible” than the EPA standards, and are “based on years of research and designed to protect public health and preserve well-balanced Florida ecosystems.” Sen. Charlie Dean said the FDEP rules “create nutrient reduction expectations where necessary to protect Florida water bodies, while the EPA’s do so regardless of water body health. The state rules would also eliminate unnecessary procedures which do not add to water body protection and restoration.”
For its part, EPA said last week that it prefers that Florida implement its own numeric nutrient criteria. “EPA commends Florida’s co
CF confirms curtailment
CF Industries Holdings Inc. in releasing stellar earnings for the fourth quarter and year ending Dec. 31, 2011, confirmed that it has curtailed phosphate production in the first quarter. CF said it did so by advancing the timing of scheduled plant turnarounds. It said plans for the turnarounds were finalized in December in recognition of the then-prevailing market imbalance. The U.S.-based The Mosaic Co. announced earlier that it would cut DAP production by 250,000 mt, with a few international producers doing likewise.
CF reported net earnings attributable to common stockholders of $438.9 million ($6.66 per diluted share) on sales of $1.72 billion for the fourth quarter ending Dec. 31, 2011, compared to the year-ago $200.3 million ($2.78 per share) on sales of $1.24 billion.
For the year, CF reported net income of $1.54 billion ($21.98 per share) on sales of $6.1 billion compared to the prior year $349.2 million ($5.34 per share) on sales of $3.96 billion.
For more details, see the Green Markets web-edition Feb. 17.
Icahn makes offer for CVR
Billionaire investor Carl Icahn on Feb. 16 issued a press release announcing a tender offer for all of the outstanding shares of CVR Energy Inc. Tendering shares will be paid $30 per share in cash, plus a contingent value right. The contingent value right will entitle holders to an additional payment, in cash, equal to the value that the share is sold for in excess of $30.
In addition, Icahn has nominated nine individuals to CVR’s board of directors.
For more details, see the Green Markets Web-Edition Feb. 17.
Simplot acquires warehouse
The J. R. Simplot Co. has acquired a large warehouse in Othello in order to expand its storage and customer service capabilities. The 48,000-square-foot warehouse will serve all Simplot Grower Solutions (SGS) units in Washington.
The acquisition will provide faster service to SGS customers, according to SGS head Dave Dufault. “Acquiring this warehouse aligns with SGS’s long-term strategy to develop an efficient distribution system that will serve our customers well for years to come,” said Dufault.
Greg Olson, SGS area manager based in Moses Lake, added, “This facility will enable us to better serve our current customers with dry fertilizer products as well as handle new customers as we continue to grow our business in Washington.”
The warehouse, which has a capacity of 30,000 tons of dry fertilizer, previously was owned by Northwestern AG Warehousing LLC.