HR 2454 Detrimental to US Fertilizer Industry
This Friday, the US House of Representatives may vote on HR 2454, "The American Clean Energy & Security Act."
This legislation is particularly harmful to the fertilizer industry. Over the next several decades it requires energy production to move away from coal to more clean energy sources. Because nuclear power faces severe opposition from environmental groups, the likely scenario will be that electricity will be produced from natural gas. Thus, US nitrogen fertilizer manufacturers who also utilize natural gas will be faced with severe competition for this fuel source and will not likely be able to compete with foreign nitrogen manufacturers who are not subject to the emissions mandates, are not required to buy carbon credits and do not face higher natural gas prices. The US already imports over half of our nitrogen fertilizer from other countries and this legislation as it is written will only encourage more imports if domestic nitrogen producers cannot compete in this global market.
Today we learned that the Chairman of the House Ag Committee Rep Collin Peterson has agreed to support this bill after getting assurances that the USDA (instead of USEPA) will have some regulatory oversight over potential agricultural production carbon offset programs. Currently, fertilizer production facilities will receive no allowances for carbon emissions and will have to purchase carbon credits.
The bottom line to the ag input industry is that HR 2454 will put US fertilizer manufacturers at a severe competitive disadvantage. This bill seeks to regulate energy production and carbon emissions well into the year 2050 and as time goes by the costs escalate significantly for farmers and all consumers. The cost to produce an acre of corn is estimated to increase $33.43 per acre by 2020. The cost to livestock producers is even more significant as pastureland may have to be converted to "sustainable" switchgrass or forests. In IFCA's opinion, HR 2454 jeopardizes the food security of the USA. It also challenges our ability to produce food efficiently and affordably as world population grows. If we have to rely on fertilizer imports to grow our crops, you should question how this provides long term security for citizens of the USA.
In addition, HR 2454 contains provisions wherein the US government will send tens of billions of dollars to other countries to "buy" carbon credits from them; for example by paying South American countries to not cut down rainforests. US taxpayers are going to pay other countries for carbon credits while US manufacturers and citizens also foot the bill here at home.
This legislation is being moved quickly and few know the details of how it's going to work and what the ultimate cost to our economy will be.
For all these reasons please contact your US Congressman before Friday, June 26 and express your concerns with HR 2454. You can call their Washington DC office or go to the link below to send them an email. The link contains a letter which you should personalize to state your concerns. You can add or delete text in this letter. If you need any assistance or have questions please contact Jean Payne at 309 827 2774.