by Monte Nevitt
Natural gas prices are the lowest they have been in a decade.
Gas production is booming, having increased over 10% in just 2 years’ time. As is true of any commodity, overproduction equals reduced prices. Hydraulic fracturing, or “fracking” is a new technology that has opened millions of acres of shale rock that holds a great deal of gas, and it can finally be accessed. The number of rigs to access that gas has also increased as has the amount of acreage.
Because natural gas is the primary source of ammonium nitrate, the basis of nitrogen fertilizer, the dramatic reduction in gas prices should augur well for fertilizer cost. At the same time, other elements in fertilizer, namely potassium, phosphorus, magnesium, calcium and sulfur are getting harder to find and mine, so it is a pure conjecture where fertilizer prices might go. Luckily, fertilizer production accounts for a mere 2% of US output of natural gas.
There are other influences that will drive up the cost of fertilizer: 1.) Many of the dead plumes in river estuaries are blamed on nitrogen fertilizers; 2.) nitrous oxides in the air are far more deleterious than carbon dioxide, and most research indicates over 70% of nitrous oxides are the result of decomposition of nitrogen fertilizer; 3.) a problem recently discovered is that nitrates and nitrites that are finding their way into water tables, and that will prove a very expensive fix.
As one Newton’s Laws says, “For every action, there is an equal and opposite reaction.”
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