SUMMARY

Agriculture is one of the biggest consumers of US gas, and it accounts for 70-90% of the production cost of ammonia, which is the building block for fertilisers.

By Joseph Murphy

Increased restrictions on the production and consumption of natural gas would have serious negative consequences for the US agricultural industry, the American Gas Association (AGA) warned this month in a new study.

The release of the study comes as jurisdictions across the US introduce bans on certain uses of natural gas. AGA stressed that the central role of gas in agriculture cannot be overlooked, especially at a time when US households struggle with rising food prices.

“There is a direct connection between the availability of low-cost natural gas and the cost of food on store shelves in every state across our nation,” AGA CEO Karen Harbert said. “We cannot afford to drive up the cost of food for Americans at a time when they are already feeling the impacts of inflation broadly. Any attempt to ban or restrict access to natural gas would do just that – driving up prices for energy directly and other critical products like food without the environmental gain that many claim.”

And given that global agricultural production is becoming more energy intensive, the need for secure and affordable gas supply is greater than ever, she said.

US agriculture is among the biggest consumers of natural gas, using around 1.7 trillion ft3/year, or nearly 15% of all US commercial and industrial demand, the report finds. The sector represents a major part of the economy, providing 5mn direct jobs while contributing $437bn to US gross domestic product.

Within the agricultural supply chain, the most significant use for gas is in the production of fertilisers and other agrochemicals, used to boost crop yields. The report warns that losing access to ample gas supply would make the US agrochemical  sector less competitive compared with foreign producers, such as China and Russia, meaning that the country would have to import more of its ammonia feedstock and finished fertiliser products. 

“Agrochemical security means global food security, underscoring why domestic ammonia production is so vital and why US natural gas is critical to national security,” Harbert said. “Recent events in Europe demonstrate that the absence of domestic energy supplies contributes to economic uncertainty and insecurity.”

“An abundant and affordable supply of natural gas is critical to the fertiliser industry and our ability to provide essential crop nutrients to farmers,” added Corey Rosenbusch, CEO of The Fertiliser Institute trade group. “Natural gas is the primary feedstock for ammonia, the building block for all nitrogen fertilisers, and accounts for 70-90% of production costs.”

Gas is also used as fuel to run agricultural equipment and power food storage and transportation.

Rosenbusch stressed the need for US “energy policies that support robust natural gas production and supply.”

“Despite the benefits natural gas provides our farmers, as well as our nation’s economic and environmental progress, certain policymakers and activist groups are pushing for ideologically driven bans on this affordable and reliable energy,” Harbert continued. “Restricting the development and use of natural gas would mean higher costs for farmers, driving up food prices and costs for families and businesses across the country. We must ensure that farmers and American manufacturers have competitive and secure supplies of fertilisers and affordable energy to produce the food our nation depends on.”

There is growing attention on the environmental footprint of agriculture as countries pursue net-zero goals, particularly as around 37% of human-sourced methane emissions are caused by livestock and agricultural practices worldwide, according to the US Environmental Protection Agency (EPA). In the US, the EPA estimates that the sector accounted for 11% of greenhouse gas emissions in 2020.

However, some of this methane can be captured before it escapes into the atmosphere and resold as an energy source, Harbert said.

“The US is also innovating by turning farm waste into renewable natural gas (RNG) to produce low-carbon energy,” she said. “Capturing methane emitted by our farming community and blending it into our pipeline system will enable lower emissions in our food supply ecosystem. RNG exemplifies how natural gas utilities provide innovative solutions that will lead our nation and world to a cleaner energy future.”

AGA engaged FTI Consulting to undertake analysis for the report, which forms part of the association’s Advancing America series.