And the protential profit is huge. In the early 2000s, as conventional US natural gas sources were drying up and prices were spiking, the US fertilizer industry moved operations to rich cheap natural gas places like Trinidad and Tobago. Now that offshore places are also getting tapped out, back to the US where the fracking boom has made US natural gas suddenly abundant and cheap (75% less than in 2008 as reported
by the New York Times). With strong demand driving high crop prices, in turn driving high nitrogen fertilizer prices, there is no question the low-input-prices-plus-elevated-prices-for-the-final-product is a winning equation for the fertilizer industry.
How about volatile energy prices though? Well, the incentives do not end there. Enter the taxpayer: These projects are being underwritten by public money at the national, state, and local levels. Whether through federal programs designed to help regions recover from disasters (e.g. Iowa’s 2008 floods), state incentives to boost local business and economy, the business model becomes even more appealing.
What are taxpayers getting in exchange for these goodies? THAT is the real mattering question, and the answer is an industrial agriculture relying on plentiful synthetic nitrogen with all the environmental liabilities this implies. As excess nitrogen that seeps into streams and eventually into rivers, there will be:
Rather than propping up nitrogen use by subsidizing new mega-projects that rely on fracked gas though, public policy should be seeking to encourage farming practices that demand less nitrogen. The worst part is that by simply diversifying and adding a “small grain” (oats or wheat) plus nitrogen-fixing cover crops, farmers could reduce their nitrogen needs by upwards of 80% (Note: the most prolific US crop, corn, is also the most nitrogen-intensive
among major field crops). But that’s touching another sensitive subject: farm bills
* Up for some thought-sharing on this topic?
. Do you live in an area affected by fracking?
. Do you believe fracking is a risk for our health?
. Would you voice your opinion to prone crop diversification and reduce the dependance of fracking?
Let us know…