Agriculture Subcommittee Opens Comprehensive Farm Fuel Hearings

Apr 25, 2001

Agriculture Subcommittee Opens Comprehensive Farm Fuel Hearings
Producers' energy needs are complex and varied for fertilizer, irrigation, drying crops

(April 25, 2001)

House Agriculture's Subcommittee on Conservation, Credit, Rural Development and Research on Wednesday opened a comprehensive examination of the energy crisis hitting farmers and ranchers at every stage of production.

Subcommittee Chairman Frank Lucas (R-OK) noted the major concern that energy supply and demand has on agricultural and rural communities. Since agricultural producers have a low return on investment and equity when compared to many sectors of the American economy, volatile swings in energy and other input costs can drastically alter their net revenues. Higher prices for oil, gas, diesel, electricity, natural gas, propane, and fertilizer caught many producers unaware this past year.

This is the Subcommittee's first of two hearings impacting energy providers and agricultural users: fertilizer processed from natural gas, drying crops with propane gas, irrigation pumps powered by natural gas, in addition to diesel fuel and rural electrical needs. The second hearing is set for May 2 with USDA, Department of Energy and commodity group outlooks on energy supply and demand.

"In order for short and long term energy goals to be realized, any energy legislation that we consider needs to be comprehensive," said Lucas. "We do not have all the answers and are interested in hearing what our witnesses have to say in order to help develop sound policy. New production techniques and sources, infrastructure needs, regulatory compliance, and hedging tools for energy users and producers must be thoroughly discussed and reconciled."

According to the Congressional Research Service, U.S. refineries as of today can only meet 85% of domestic demand for refined petroleum products while a decade ago they could meet 94% of the nation's product requirement. Furthermore, the U.S. now imports 52% of its oil, up from 47% a decade ago. America is not only importing more of its oil, but also losing ground on refining capacity.