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Proposed Regulations Threaten Fertilizer Industry Jobs

by Kathy Mathers

January 30, 2014 Discussed (11)

Energy, In the Field

Though the Obama Administration claims to be doing all that it can to fix unemployment and get Americans back to work, its regulatory agenda actually threatens to do the opposite. During Tuesday night’s State of the Union address, President Obama made it clear that in the absence of Congressional action, he was ready to assert executive privilege on contentious issues such as climate change. In the case of the fertilizer industry, such action would be a job killer.

Nitrogen fertilizer manufacturers rely upon natural gas to provide the energy needed to capture nitrogen from the air in a complex process. The cost of this natural gas accounts for between 70 and 90 percent of the cost of producing ammonia, the basic building block for all nitrogen fertilizers.

Recent history tells us that high natural gas prices threaten U.S. nitrogen production.  Between 1999 and 2007, more than 40 percent of all nitrogen production capacity in the U.S. was lost because of high natural gas prices.  Now with the shale gas revolution, we have seen a renaissance in the industry unseen in the last 40 years – several production plants have come back on line and nearly 30 new plants have been announced.  But proposed EPA regulations threaten this positive economic activity.

Each new nitrogen fertilizer plant will create approximately 1,500 construction jobs and 150 permanent jobs. The impact of these jobs would compound the $58 billion that flows into the economy as a result of the fertilizer industry’s employment of 25,000 U.S. workers. With an average annual salary of more than $75,000, these fertilizer production jobs are often the best jobs in their communities.

Fertilizer manufacturers want to continue to produce necessary nutrients for farmers and contribute to the economy by providing quality jobs. EPA activity could place that at risk by implementing policy changes that pick winners and losers. If the fertilizer industry no longer has a steady and reliably priced source of natural gas, American workers will be the biggest losers.  

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