NCGA Hails Legislation to Secure Domestic Gas and Energy Development (12-21-06)

Legislation that opens 8.3 million acres to domestic oil and gas development was signed into law Wednesday by President George W. Bush, a move the National Corn Growers Association (NCGA) is hailing as a victory for both agriculture and energy security.

The Tax Relief and Health Care Act of 2006 includes legislation that will allow access to portions of America’s Outer Continental Shelf for exploration and development of more than 1 billion additional barrels of oil and nearly 6 trillion cubic feet of natural gas.

“The president made another strong step in securing this country’s energy independence by signing into law a measure to provide more domestic supplies of natural gas for an increasing demand of energy,” said Ken McCauley, NCGA president. “NCGA applauds the president in his strong resolve to take significant steps forward in securing our domestic energy future – whether by natural gas or renewable fuels such as ethanol made from corn.  Increasing domestic sources of natural gas will aid corn growers with the increased prices they face in their day to day operations.”

The price and supply of natural gas affects every part of agriculture McCauley added. Farmers depend on significant amounts of natural gas for food processing, irrigation, crop drying, heating farm buildings and homes, and as a feedstock in the production of fertilizers, which are necessary for all plant growth. Natural gas accounts for between 70 and 90 percent of the total production cost of one ton of ammonia which is the building block of all nitrogen fertilizers. Overall, 19 U.S. ammonia plants have closed permanently since fiscal year 1998/99, when the ongoing U.S. natural gas crisis first began. These facilities closed primarily as a result of the rise in natural gas prices, and an additional five plants are idle.

The package also includes extension of ethanol tax incentives and the expansion of trade relations with Vietnam.

“Corn growers worked aggressively this year to ensure natural gas, renewable fuels and trade stayed at the top of the legislation priority list,” McCauley noted. “We have and will continue to work for policies that benefit agriculture and producers. We are fighting on many fronts, and we see that work result in a great win for growers. We are working to ensure a better economy, a better environment and a more secure and independent future that includes domestic energy sources and renewable fuels.”