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Impact of Rising Natural Gas Prices on U.S. Ammonia Supply

Wen-yuan Huang, U.S. Department of Agriculture
The volatile and upward trend in U.S. natural gas prices from 2000-05 has led to a 17-percent decline in the Nation’s annual aggregate supply of ammonia. During the period, U.S. ammonia production declined 44 percent, while U.S. ammonia imports increased 115 percent.

Also, the share of U.S.-produced ammonia in the U.S. aggregate supply of ammonia dropped from 80 to 55 percent, while the share from imports increased from 15 percent to 42 percent. Meanwhile, ammonia prices paid by farmers increased from $227 per ton in 2000 to $521 per ton in 2005, an increase of 130 percent.

Natural gas is the main input used to produce ammonia. Additional increases in U.S. natural gas prices could lead to a further decline in domestic ammonia production and an even greater rise in ammonia imports.

Nitrogen is vital to a plant’s ability to develop proteins and enzymes, which, in turn, help the plant grow to produce food, feed, and fiber for animal and human consumption (Kramer). The importance of nitrogen fertilizers to U.S. agriculture is evidenced by its rising use over time. From 1960 to 2005, annual use of chemical nitrogen fertilizers in U.S. agriculture increased from 2.7 million nutrient tons to 12.3 million nutrient tons (fig. 1). This increase is considered to be one of the main factors behind increased U.S. crop yields and the high quality of U.S. agricultural products (TFI (d); Hallaway).

In 2005, U.S. agriculture used 22.15 million tons of chemical fertilizer nutrients (nitrogen, phosphate, and potash), of which nitrogen accounted for 56 percent. About 42 percent of total nitrogen used during the period was attributed to production of corn (ERS(c)). Among crops, corn accounted for the largest share of nitrogen use, followed by wheat. Total nitrogen costs for U.S. production of corn in 2005 and wheat in 2004 were $3.66 billion and $1.02 billion, respectively. Nitrogen costs contributed to the largest operating expense for both corn and wheat producers. Nitrogen application accounted for 22 percent of the operating costs for corn producers and about 33 percent of the costs for wheat producers (table 1).

In the coming years, projected increases in U.S. ethanol production from corn grain are expected to boost demand for nitrogen.

…Because natural gas is the main input used to produce ammonia, which, in turn, is the main input used to produce all nitrogen fertil­izers, the volatile and upward-trending price of natural gas in recent years has affected the price and supply of ammonia, and, thereby, the supply and price of nitrogen fertilizers, which is a great concern to U.S. agriculture. This article analyzes the impact of natural gas prices on the U.S. ammonia supply and assesses future U.S. ammonia supplies.
(August 2007)

Nitrogen Overdose
Element quietly rivaling CO2 as a global climate threat

Suzanne Bohan, Inside Bay Area
ON AN OVERCAST DAY in April, Stuart Weiss stood in the rolling hills of a Bay Area nature preserve and lifted a bag of nitrogen-based fertilizer to his shoulder.

The heavy sack, the Menlo Park ecologist explained to a small crowd gathered before him, symbolized the unprecedented release of nitrogen into the Earths air, land and water, and the insidious environmental changes under way globally from the potent fertilizer.

At Edgewood Park in Redwood City where he stood, nitrogen from vehicle exhaust on a nearby freeway has led to the local demise of a threatened butterfly population, according to research Weiss conducted. The clear link he established between the exhaust and the butterflies decline attracted international attention among the growing federation of scientists studying nitrogen pollution.

I call it the biggest global change that nobody has ever heard of, Weiss said at the spring event. The planet has never seen this much nitrogen at any time. Human activity now releases 125 million metric tons of nitrogen from agricultural activities and fossil fuel combustion a year, compared to 113 million metric tons annually from natural sources, according to a 2007 United Nations report called Human Alteration of the Nitrogen Cycle.

In 1860, the U.N. report noted, there was virtually no release from human activity. The consequences of this spike, the report added, are profound.

Not only is this glut of nitrogen disrupting ecosystems, polluting waters and harming human health, but its a silent partner, along with carbon dioxide, in changing the Earths climate.

Despite the countless initiatives under way to reduce CO2 levels to slow global warming, scientists warn that those efforts will prove moot unless nitrogen releases also are lowered.

One nitrogen compound is especially worrisome, as it lingers in the atmosphere for a century and is 300 times as potent a heat-trapping gas as carbon dioxide.

“We won’t solve global warming without addressing nitrogen,” said Elizabeth Holland, a senior scientist with the National Center for Atmospheric Research in Boulder, Colo.

“The changes to the nitrogen cycle are larger in magnitude and more profound than the changes to the carbon cycle,” Holland continued. “But the nitrogen cycle is being neglected.”

…An inert form of nitrogen, N2, actually comprises about 80 percent of the Earth’s atmosphere. It stays to itself, however, thanks to powerful chemical bonds that keep the two nitrogen molecules tightly bound.

While nature on its own does separate them and create “reactive nitrogen,” it’s on a limited basis. This reactive form – which fuels life – has historically been a scarce commodity.

But in the early 20th century, two scientists found a way to convert inert nitrogen in the air into fertilizer [the Haber-Bosch process]. The invention revolutionized agriculture, lifting limits on food production and allowing the human population to expand exponentially.

But copious amounts of fertilizer are now used in agriculture, with the excess draining into rivers, lakes and the ocean.

Combustion of gasoline, natural gas and coal also releases enormous quantities of nitrogen-based compounds into the atmosphere, much of which settles on land and water. Animal waste is another major source of nitrogen.

With fertilizer literally falling from the sky, plants – many of them invasive weeds – get turbocharged from nitrogen, altering natural habitats by driving out native plants and the animals that rely on them.

California is at particular risk for this disruption, and the Bay Area is designated as one of the nation’s “hot spots” for nitrogen-induced ecological shifts. Weiss estimates that in some Bay Area regions, auto emissions deliver up to 20 pounds per acre a year of nitrogen – about half the amount typically used on lawns.
(12 August 2007)
Figures and sidebars at original:
Sidebar: Munching away at an ecological menace
(Grazing, when well managed, can restore ecosystems)
Sidebar: At a Glance

Human Alteration of the Global Nitrogen Cycle: Causes and Consequences
Multiple authors, Ecological Society of America (ESA)
Human activities are greatly increasing the amount of nitrogen cycling between the living world and the soil, water, and atmosphere. In fact, humans have already doubled the rate of nitrogen entering the land-based nitrogen cycle, and that rate is continuing to climb. This human-driven global change is having serious impacts on ecosystems around the world because nitrogen is essential to living organisms and its availability plays a crucial role in the organization and functioning of the worldÂ’s ecosystems. In many ecosystems on land and sea, the supply of nitrogen is a key factor controlling the nature and diversity of plant life, the population dynamics of both grazing animals and their predators, and vital ecological processes such as plant productivity and the cycling of carbon and soil minerals. This is true not only in wild or unmanaged systems but in most croplands and forestry plantations as well. Excessive nitrogen additions can pollute ecosystems and alter both their ecological functioning and the living communities they support.

Most of the human activities responsible for the increase in global nitrogen are local in scale, from the production and use of nitrogen fertilizers to the burning of fossil fuels in automobiles, power generation plants, and industries. However, human activities have not only increased the supply but enhanced the global movement of various forms of nitrogen through air and water. Because of this increased mobility, excess nitrogen from human activities has serious and longterm environmental consequences for large regions of the Earth.

The impacts of human domination of the nitrogen cycle that we have identified with certainty include:

  • Increased global concentrations of nitrous oxide (N2O), a potent greenhouse gas, in the atmosphere as well as increased regional concentrations of other oxides of nitrogen (including nitric oxide, NO) that drive the formation of photochemical smog;
  • Losses of soil nutrients such as calcium and potassium that are essential for long-term soil fertility;
  • Substantial acidification of soils and of the waters of streams and lakes in several regions;
  • Greatly increased transport of nitrogen by rivers into estuaries and coastal waters where it is a major pollutant. We are also confident that human alterations of the nitrogen cycle have:
  • Accelerated losses of biological diversity, especially among plants adapted to low-nitrogen soils, and subsequently, the animals and microbes that depend on these plants;
  • Caused changes in the plant and animal life and ecological processes of estuarine and nearshore ecosystems, and contributed to long-term declines in coastal marine fisheries. National and international policies should attempt to reduce these impacts through the development and widespread dissemination of more efficient fossil fuel combustion technologies and farm management practices that reduce the burgeoning demand for and release of nitrogenous fertilizers.

(Spring 1997)
One of several issue papers from the Ecological Society of America