Natural gas prices causing problems
Posted: Saturday, September 24, 2005
OMAHA (AP) -- Natural gas prices are climbing, and farmers are asking the federal government to help stem the rise.
The Nebraska Farm Bureau has asked U.S. Agriculture Secretary Mike Johanns to create a group to address fertilizer supply and pricing, as natural gas is a key ingredient for anhydrous ammonia, a fertilizer commonly used on corn.
Natural gas has increased to $12.59 per cubic foot, a $1.43 increase since Sept. 14, and has increased more than $3 since before Hurricane Katrina, according to recent Department of Energy reports.
Higher prices for fertilizers could cause farmers to begin shifting their acres away from corn, Nebraska's largest crop, said Keith Olsen, president of the Nebraska Farm Bureau.
Olsen said high fertilizer prices cause economic hardships on farmers, but that federal officials may be placing more importance on natural gas supplies for home heating.
U.S. Ben Nelson, D-Neb., asked the federal Government Accounting Office on Wednesday for an inquiry into rising natural gas prices, citing concerns about gouging.
Energy experts told Nelson they do not believe gouging is the problem and attributed high prices to weather and supply and demand.
For example, oil and natural gas rigs and fuel refineries on the Gulf Coast were shutting down Friday in anticipation of Hurricane Rita. That lowers supplies in the face of continued high demand.
Bob Slaughter of the National Petroleum and Refining Association says Rita is a potentially bigger threat to U.S. consumers than Katrina because there's more refining capacity in the Houston area.
The Nebraska Farm Bureau has asked U.S. Agriculture Secretary Mike Johanns to create a group to address fertilizer supply and pricing, as natural gas is a key ingredient for anhydrous ammonia, a fertilizer commonly used on corn.
Natural gas has increased to $12.59 per cubic foot, a $1.43 increase since Sept. 14, and has increased more than $3 since before Hurricane Katrina, according to recent Department of Energy reports.
Higher prices for fertilizers could cause farmers to begin shifting their acres away from corn, Nebraska's largest crop, said Keith Olsen, president of the Nebraska Farm Bureau.
Olsen said high fertilizer prices cause economic hardships on farmers, but that federal officials may be placing more importance on natural gas supplies for home heating.
U.S. Ben Nelson, D-Neb., asked the federal Government Accounting Office on Wednesday for an inquiry into rising natural gas prices, citing concerns about gouging.
Energy experts told Nelson they do not believe gouging is the problem and attributed high prices to weather and supply and demand.
For example, oil and natural gas rigs and fuel refineries on the Gulf Coast were shutting down Friday in anticipation of Hurricane Rita. That lowers supplies in the face of continued high demand.
Bob Slaughter of the National Petroleum and Refining Association says Rita is a potentially bigger threat to U.S. consumers than Katrina because there's more refining capacity in the Houston area.
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