May 12, 2010

Washington, D.C. – The Fertilizer Institute (TFI) commented today on the potential impact to the U.S. fertilizer industry of climate change legislation introduced by Sens. John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.).

“The climate change legislation introduced today by Sens. Kerry and Lieberman provides government incentives that will encourage a wide range of utilities to switch to natural gas as an alternative for generating energy, as well as incentives for natural gas vehicles, said TFI President Ford B. West. “This will undoubtedly increase the demand and price of natural gas for which there is no substitute for in the manufacturing process of nitrogen fertilizers.”

The domestic fertilizer industry is highly dependent on a reliable and reasonably priced supply of natural gas. As much as 90 percent of the cost of producing nitrogen fertilizers can be directly attributed to the price of natural gas. Nitrogen is also an essential component of many phosphate fertilizers.

“Despite the bill’s stated intent to offset natural gas rate increases for industrial users, its design fails to protect the fertilizer industry from the threat of fuel switching since our natural gas feedstock purchases are not made through a local distribution company,” stated West. “Congress must keep in mind that fertilizer is a crucial food security resource that is responsible for 40 to 60 percent of the world’s food supply. Essential industries, such as fertilizer, will be severely challenged by climate policy that does not address our unique sensitivity to the price and availability of natural gas. It is vital that Congress develop climate change legislation that will preserve the fertilizer industry and many other U.S. manufacturing sectors’ ability to remain viable in a very competitive global market.”

About the Fertilizer Institute

The Fertilizer Institute represents the nation’s fertilizer industry. Producers, wholesalers, retailers and trading firms which comprise its membership are served by a full time Washington, D.C., staff in various legislative, educational and technical areas as well as with information and public relations programs.