The Andersons signs anti-NAT GAS Act petition
Written by Patrick Timmis | | ptimmis@toledofreepress.comThe Andersons Inc. recently signed a petition addressed to the U.S. Congress requesting that it deny subsidy funding to the natural gas industry.
The company, along with a number of other manufacturing and agricultural organizations, wrote that it opposed “legislation that the Congress may consider that would provide subsidies or mandates that artificially increase the demand for natural gas in the transportation and power sectors.”
“We urge the Congress to allow the market to set supply and demand for natural gas instead of picking ‘winners’ and ‘losers’ through legislation,” the letter stated.
The Andersons specifically opposed HR 1380 or the “NAT GAS Act,” a subsidy for natural gas-fueled vehicles.
Debra Crow, a spokeswoman for The Andersons, said the company’s chief concern was that a subsidy would raise the demand, thus price, for natural gas, which is also used in agriculture.
“Our biggest concern is that natural gas is used in the production of some of the nutrients that go into farms,” Crow said. “Our biggest concern is the impact that it would have on the farmers.”
It would also make business more costly for The Andersons, she said, as the company is a major plant nutrient distributor.
The Andersons followed with its own follow-up letter. The highlights were:
O “Natural gas is a vital feedstock for the production of ammonia, which is the building block for all nitrogen fertilizers. Nitrogen applications are absolutely essential to maintaining the high crop yields of modern agriculture that keep America’s crop production abundant, affordable and a vital export.”
O “Creating an inflated market for natural gas through this legislation would sharply increase the cost and availability of this vital input and put a strain on the American farmer. The farmer will be required to choose between higher production costs and lower yields.”
O “This legislation will likely lead to a greater dependence on nitrogen imports. Subsequent to the sharp rise in natural gas prices in 2001 close to 40 percent of the U.S. nitrogen production industry shuttered leaving the U.S. farmer dependent on imports for as much as 50 percent of their needs from many of the same countries we rely on for oil.”
O “Natural gas is not an industry in its infancy. It is not a renewable fuel, and it is not an industry providing new markets for American agriculture. Should investors determine that natural gas as a vehicle fuel makes economic sense, capital will flow naturally into this sector. If this market does not develop, then there is an economic reason why this should not prosper.”
Chris Kozak, communications and community relations manager for Columbia Gas of Ohio, said concerns about rising demand would be largely eliminated should more drilling opportunities be opened in newly discovered shales in Pennsylvania and Ohio.
“The best solution is bringing more supply to market,” he said.
Those shales hold $2 trillion worth of natural gas, about a 125-year supply, Kozak said. Kozak said he respected The Andersons needs to look out for its own best interest and said the companies share a similar goal of a healthy supply of natural gas. O
Tags: Chris Kozak, Columbia Gas of Ohio, natural gas, Patrick Timmis, The Andersons, utilities
