Summary of budget financed from nonpower proceeds (for fiscal years ending June 30, 1960, 1961, and 1962)

Senator HILL. I wonder if now we might have either one of you, or whoever you think best, to give us a summary picture, so to speak, of our fertilizer operations and what has been accomplished and what we are doing today.

Mr. VOGEL. Senator, we have here, as I indicated earlier, Dr. Lewis Nelson, who has been with us a relatively short period of time and who came to us from the Department of Agriculture. He has done a very fine job in coordinating our activities in agriculture and fertilizer development. I believe that it would be worthwhile for you to listen to him.

Senator HILL. All right, Doctor we are glad to have you. You may proceed in your own way.

Mr. NELSON. I would like to tell you about the status of projects that we have on the drawing boards, on new chemical fertilizers we are working on at the present time, and some of our hopes about them.

NEW CHEMICAL COMPOUND-OXAMIDE

We are working on a nitrogen compound that is known as oxamide. Presently about 50 percent of the nitrogen in the soil is lost through volatilization in the atmosphere, or through leaching out of the soil,

or through the plants taking it up too soon. This new compound is almost the perfect nitrogen fertilizer.

Senator KEFAUVER. What is the name of it?

Mr. NELSON. Oxamide.

Senator KEFAUVER. What does that mean?

Mr. NELSON. The chemical compound of it is CONH2 taken twice. Senator KEFAUVER. I have tried to learn a lot about drugs, but I don't know as much about chemicals generally.

Senator HILL. Aren't some drugs chemicals?

Go ahead, Doctor.

Mr. NELSON. This compound has a unique chemical property, in that when it is finely ground it is just as soluble as ammonium nitrate. As you increase the size of particles it becomes less and less soluble. We think that there is good evidence that this compound in large particles might stay available in the soil and release nitrogen over a period of 2 or 3 years. You can see what a benefit that would be to farming.

Senator HILL. How long have you had this?

Mr. NELSON. We have been working on it intensively during the last year, but we started looking at it a little over 2 years ago. Senator HILL. How long have you felt that it is a feasible fertilizer to use?

Mr. NELSON. We can't say at the moment that it is feasible because it depends upon the manufacturing process. In the case of fertilizer chemicals we have to have processes so that we can manufacture a fertilizer cheaply and within the range of what the farmer can pay and the range of what his choice between it and other products would be. The manufacturing cost of oxamide would have to be fairly close to that of present nitrogen fertilizers. We are testing to find an economical process. We are devoting a great part of our fundamental research effort to find a new process, a cheap process to produce oxamide. It looks very encouraging.

SEARCH FOR NONEXPLOSIVE AMMONIUM NITRATE

Another thing that we are working on is to try to find a nonexplodable ammonium nitrate. You are all acquainted with the hazards of ammonium nitrate. There is some hope that we may find a way to make ammonium nitrate nonexplodable for agricultural use.

Senator KEFAUVER. How are you getting along with that project? Mr. NELSON. We know that certain compounds and certain chemicals will inhibit the explodability of ammonium nitrate, it is a matter of getting the right combination.

RESEARCH EFFORTS TO TAKE OXYGEN FROM FERTILIZER

Now, a most exciting current investigation is our research efforts to take the oxygen out of fertilizer. In the early days, fertilizers with a very low analysis were filled with lime filler, sandstone, and other things. We got rid of those through the introduction and demonstation of high analysis fertilizers.

There was much gypsum in phosphate fertilizers, and that has been pretty well eliminated in our high analysis goods. Now about the only other element in fertilizer that adds to bulk and weight is th

oxygen in the chemical compound. It makes no difference to the plants whether the oxygen is in the fertilizer. We have been able to produce some nitrogen and phosphorous compounds that have 150 percent plant food, based on the ordinary way it is reported today.

If this proves feasible, we have made a tremendous advance, because of the savings in the shipping costs, transportation, handling, and bagging, through the elimination of materials not useful to growing plants.

DEMONSTRATION PLANT FOR AMMONIUM PHOSPHATE

We have mentioned that we plan to build a small-scale demonstration plant for ammonium polyphosphate. This will be an unusually high analysis fertilizer material. It will be a 16-61-0 formulation, in other words, 77 percent plant food. It is made possible by our discovery a few years ago of superphosphoric acid, a very high analysis phosphoric acid. This superphosphoric acid has another unusual property beside its high analysis. We call it the "sequestering" effect. It will keep iron, aluminum, and certain minor elements in solution that are very valuable for plant growth. This will undoubtedly have a tremendous role in the liquid fertilizer market, because they want clear material without any precipitants of any kind in them.

(Recess.)

Senator HILL. You may continue, Doctor.

PAN GRANULATOR

Mr. NELSON. I was starting to mention the pan granulator which General Vogel talked about briefly. This offers a tremendous potential to the fertilizer industry, we feel. It is not entirely a new idea. Pan granulators are used by the drug industry. These are small rotating pans in which they make pills. As far as we know, this process has never been used in the fertilizer industry. With it we can come up with perfectly sized granules that have uniform chemical composition. The process appears to be much cheaper than other processes now used, besides producing higher quality material. We feel that the operating costs will be lower than those of conventional processes. We feel that we can save up to a quarter of a million dollars a year in our own plant by installing this process. It will have a significant demonstration value to the fertilizer industry. We are particularly anxious to get underway, because there is quite an upward trend in new commercial fertilizer plants planned. The easiest time to incorporate a new process is at the time the plant is being built. That is another reason why we are so interested in the pan granulation process.

Mr. VOGEL. I might add that in industry at the present time fertilizer is pelletized by the use of expensive prilling towers. This has largely limited conventional processes to the big companies. The smaller ones cannot get into it as readily. The TVA pan granulator would provide a method which would be usable by almost anybody. Senator HILL. Dr. Nelson, Senator Stennis had to go out. Just tell him what you said.

Senator STENNIS. I would be very interested, but I wouldn't want to take up the committee's time.

Mr. NELSON. I was describing an adaptation to fertilizer manufacture of a granulating process that is used by the drug companies in making pills. As far as we know it has not been used anywhere in the fertilizer industry. Our pilot plant studies show that it works well on fertilizers, and produces a product with highly uniform chemical and physical qualities. It appears to be a much cheaper process than those usually employed. We feel that it would save us roughly a quarter of a million dollars a year over the operation of our present facilities.

Senator STENNIS. How would that figure out in pounds of production of the fertilizer itself, or tons!

Mr. NELSON. Our basic plant capacity would not be changed. The cost per ton of product would be lowered some. I don't have those figures immediately available.

Mr. VOGEL. The result should be a lower cost product from industry. Senator STENNIS. That is what I mean, you feed that into industry, and it is a better method

Mr. NELSON. It should result without question, it seems to us, in lowering the cost of fertilizer to the farmers.

Senator HILL. Of course, you are not in the commercial fertilizer business, yours is research and demonstration, correct?

Mr. NELSON. Yes.

Senator STENNIS. You said that that is fed to industry.
Mr. NELSON. That is right.

USE OF TVA PATENTS BY INDUSTRY

Senator STENNIS. I notice that the chairman said "to date 184 fertilizer manufacturers have been licensed to use royalty free patents on fertilizer process developed by TVA." That is a very remarkable achievement. They do use them extensively, do they?

Mr. VOGEL. They certainly do.

Senator STENNIS. I know sometimes, Mr. Chairman, we have new fertilizers come on the market, and the companies contribute to them. But after all, the main process goes back to the research and experimentation that the Agriculture Department has carried out. And this is another illustration of it, now, and TVA carries on its research and feeds it into the channel, which is remarkably good work, I think. Senator KEFAUVER. Some of the fine new fertilizers of today were researched and developed and patent-secured by the Tennessee Valley Authority's operations there, isn't that true?

Mr. VOGEL. That is correct. Our objective is continually to develop products of higher quality in order that a better product may be available to the farmer at lower cost.

Senator KEFAUVER. I think you do a tremendously great job.

USE OF GRANULATOR BY SMALLER MANUFACTURERS

Do I understand, Dr. Nelson, that you say that this new proposal will enable smaller manufacturers to efficiently get into business? Mr. NELSON. Yes, that is our expectation.

Senator KEFAUVER. Or General Vogel said so.

How do you explain that?

Mr. NELSON. There will be less cost for equipment.

Senator KEFAUVER. The equipment is not as expensive?

Mr. NELSON. Our ammoniator-granulator, for which 119 licenses have been issued for use in 154 plants, is a good example. This helped fertilizer manufacturers to develop certain types of fertilizers with a lower cost of equipment, and it is very widely used.

Senator HILL. Those 154 plants are all privately owned and operated plants, aren't they?

Mr. NELSON. Yes, of industry, or cooperatives.

Senator KEFAUVER. And they have the right to use your development and your patent-it is in the public domain?

Mr. NELSON. Yes, a license is issued to them royalty-free.

Mr. VOGEL. It is our policy, Senator, as I am sure you know to issue nonexclusive royalty-free licenses on all our patents. Senator KEFAUVER. Yes.

CREATION OF NEW MARKETS FOR INDUSTRY

Senator HILL. Through your demonstration process you are testing the fertilizer, and you also show the farmer what he can do on particular areas with that fertilizer, and therefore you create a market for private industry, don't you?

Mr. NELSON. Yes, I am certain that it creates a demand for new fertilizers. In that respect we have completely revised our test demonstration program in the last year. We had made studies in previous years in cooperation with the Extension Services of the several States to see what we could do to make our demonstrations more effective in the valley States. As a result we have a new program which is now being started. I am sure it will be an increasingly effective program.

OPERATION OF DEMONSTRATION PLANTS IN OTHER STATES

Senator HILL. But you also operate in a few of the States outside the valley States.

Mr. NELSON. Yes.

Senator HILL. I believe you said about 40 States.

Mr. VOGEL. Yes; of which 31 are in the test demonstration program. Senator STENNIS. That is a demonstration?

Mr. NELSON. Demonstrations.

Senator HILL. Do you want to add something, General?

Mr. VOGEL. I think that covers it quite well. We certainly are not limited to the valley in this work, and the Nation as a whole, we feel, profits thereby. We are even extending our knowledge into the new State of Hawaii.

Senator STENNIS. It seems to me like a list of those States for the record would be of interest to the Senators from States in other parts of the country.

Mr. VOGEL. We will supply such a list.

(The list referred to follows:)