Senator HENRY M. JACKSON, THE FERTILIZER INSTITUTE, Washington, D.C., February 13, 1975. Chairman, Senate Committee on Interior and Insular Affairs, New Senate Office Building, Washington, D.C. DEAR MR. CHAIRMAN: We respectfully ask this letter be made a part of the record arising out of your Committee's inquiries into President Ford's proposals relating to energy. We are well aware of the urgency of time both as to oil and gas supplies as well as the political exigencies. Should your Committee later have time in which to hear additional witnesses I should like very much to appear. There is no doubt that the number one issue today in the energy-economy crunch is the high price of food. Whether one is employed or among the growing group not at work, our elderly-the list is well nigh endless, but the concern is food prices. All, I think, will agree on this premise for it is readily understood. In response to this concern and clamour our government policy is clear-full all-out food production in an attempt to stem or slow the consumer disaster at the supermarket checkout stand. However, the energy proposals of the Administration if adopted as proposed would have a very serious opposite result. Consider that nearly everyone concerned believes the Administration proposals (as a package and, on an annualized basis) will cause the cost of fuel to rise 8-10 cents a gallon. Our farmers substituting energy in lieu of manpower use about 8 billion gallons of fuel a year. Therefore, we can easily see the farmers fuel bill rising from $600,000,000 to $800,000,000 on an annual basis. President Ford has proposed a 37 cent per thousand cubic foot tax on natural gas. This gas is the feedstock for over 95 percent of all nitrogen fertilizer manufactured in this country. There is no substitute unless we completely replace every plant in the country and use oil. Such a program is infeasible and impractical. Based on this 37 cents per mcf proposal the following obtains: 1 Potash and sulfur uses are drying, boi er fuel, etc. Phosphate use is the same except for plants manfaucturing anima' feed where the process to defluorinate requires gas. In addition, our direct use oil "tax" would increase our costs another $25 million. Thus, the direct additional cost to manufacture fertilizer would be $240.7 million. Additionally, all pesticides and herbicides are based on petrochemical feedstock so that their prices could be expected to rise. Were this not enough the fertilizer industry is a substantially user of electric power particularly in phosphate mining. Based on the dramatic increased electric charges passed on this past year we would anticipate further rising costs with the energy proposals. We are very large users of transport, particularly rail. It is estimated that for every $25 the rail lines gross, $1 comes from fertilizer transportation. The oil carriers estimate their fuel bill will rise about $580,000,000 and they will obviously ask for higher rates. It requires little imagination, therefore, to see that our farmers are going to be faced with very large increased costs-well over a billion dollars easily |