http://biz.yahoo.com/djus/031010/1735000788_2.html
Dow Jones Business News High Gas Prices May Cripple Fertilizer Industry -GAO Friday October 10, 5:35 pm ET By Spencer Jakab, Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--A study released today by the General Accounting Office highlights the dramatic impact that high natural gas prices have had on the U.S. fertilizer industry and the agricultural sector that relies on it. ADVERTISEMENT High gas prices during 2000-2001 led to a 25% reduction in domestic fertilizer capacity as production of nitrogen based products became overly costly, the study said. It also led to a 43% increase in imports of nitrogen-based fertilizer and a 7% reduction in usage through a combination of crop selection and cutbacks. The GAO study cites fertilizer industry officials in saying that high gas prices threaten to "irreversibly cripple" the industry. Citing more recent data, Kathy Mathers of the Fertilizer Institute, an industry trade body, said that 40% of domestic capacity has been shut despite a four-year high in prices of diammonium phosphate, the most commonly used fertilizer. Ninety percent of the input cost of ammonia is natural gas. "The boost in natural gas prices has put tremendous pressure on this industry, " Mathers said. Unlike crude oil, global differences in natural gas prices can't be arbitraged away, because the commodity is so difficult to transport. Thus, many producers elsewhere in the world now enjoy much lower input costs than U.S. fertilizer plants. "The ability to compete in world markets is not sustainable at this level," says Kevin Swift of the American Chemistry Council (News - Websites) , referring to the broader petrochemical industry. The co-chairmen of a congressional committee that commissioned the GAO report, Rep. Billy Tauzin, R-La., and Rep. Richard Pombo, R-Calif., highlighted the study as lending support to plans to ease restrictions on natural gas drilling in the U.S. in the energy bill currently under debate. "This GAO study provides another example of how high natural gas prices have dealt a tremendous blow to our economy," Tauzin said. "The energy bill currently in conference will go a long way toward easing burdensome restrictions on exploration and development of these vital natural gas reserves." The GAO report itself doesn't make recommendations on how or whether to increase incentives for domestic natural gas drilling. -By Spencer Jakab, Dow Jones Newswires; 201-938-4377; [EMAIL PROTECTED] ------------------------ Yahoo! Groups Sponsor ---------------------~--> Buy Ink Cartridges or Refill Kits for your HP, Epson, Canon or Lexmark Printer at MyInks.com. Free s/h on orders $50 or more to the US & Canada. http://www.c1tracking.com/l.asp?cid=5511 http://us.click.yahoo.com/mOAaAA/3exGAA/qnsNAA/9bTolB/TM ---------------------------------------------------------------------~-> Biofuels at Journey to Forever http://journeytoforever.org/biofuel.html List messages are archived at the Info-Archive at NNYTech: http://archive.nnytech.net/ Please do NOT send Unsubscribe messages to the list address. To unsubscribe from this group, send an email to: [EMAIL PROTECTED] Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/