A View from Shanghai
May 26, 2009
We write this post from Shanghai as an unseen morning sun rises shrouded by dense smog. We are here for the IFA's 77th annual conference in one of China's most modern cities. Shanghai is a showcase of China's future, with spectacular scale, architecture and planning. It is also a showcase for a new chapter in the Industrial Revolution, seemingly unbridled growth at an astonishing pace.
As an old "Asia Hand" we are able to benchmark this remarkable progress, but we also ask ourselves...at what price?
We have been here for three days and have yet to see the sun.
An article in the 25 May 09 edition of Business Week further frames the issue:
"China's unprecedented growth in recent years has come at a terrible price. Two-thirds of its rivers and lakes are too polluted for industrial use, let alone agriculture or drinking. Just 1 in 100 of China's nearly 600 million city dwellers breathes air that would be considered safe in Europe. At a time when arable land is in short supply, poisoned floodwaters have ruined many productive fields. And last year, ahead of most forecasts, China passed the U.S. to become the world's largest source of greenhouse gases."
One could argue that China's environmental policy is none of our business...but in fact, it is. Our own politicians in Washington are at this very moment feverishly fashioning an environmental bureaucracy that would make any communist central planner proud.
There is no question that this policy will result in the outsourcing of even more of our pollution to China and to the rest of the developing world. So again we ask the question...at what price?
Author: WPON
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Contemplating Cap and Trade
April 27, 2009
There are significant developments underway in the “Greenhouse Gas” arena. None of which are good news for the fertilizer industry, or for that matter, those of us who have gotten into the habit of regularly eating three meals a day.
Even before the inauguration, Obama's Carbon Busters were hard at work launching a major CO2 offensive. The world’s economic collapse delayed their efforts for a few months, but just as the economy seemed to be finding its feet, the Carbon Busters are now back, with a vengeance.
The offensive is two pronged. In early April, Congressman Waxman tabled a discussion draft of the “American Clean Energy and Security Act of 2009”. Quickly renamed “Waxman-Markey”, this 648 page tome is packed full of nefarious surprises for industry in all forms. The opposition to this legislation has been widespread and aggressive.
Anticipating this opposition, the administration launched an attack on a second front in mid April with the EPA declaring that greenhouse gases are a public threat.
In a speech before The House Energy and Commerce Committee, Congresswoman Marsha Blackburn summarized the “threat” as follows: “Mr. Chairman, last week the EPA positioned itself to regulate carbon dioxide emissions under the Clean Air Act, with or without Congressional consent. We are then, faced with a choice, we can acquiesce to bad regulation that will have certain and disastrous impacts on our economy or we can legislate an even more harmful system. It is as though, when faced with a gun to our heads, Congress is opting to shoot ourselves in the chest.”
The political debate continues. In testimony before the same committee former Vice President Al Gore testified that the legislation was “one of the most important pieces of legislation ever introduced in Congress". Robert Michaels, an economist with The Cato Institute, declared in testimony that Waxman-Markey is: “The most profoundly anti-consumer legislation ever brought before a Congress.” Former House Speaker Newt Gingrich characterized Waxman-Markey as "environmental extremism." And the beat goes on…
As this political drama has played out The Fertilizer Institute and others have been lobbying furiously trying to stay ahead of the curve. The stakes are high. Our friends in the Euro zone are facing Cap and Trade costs of USD 30 per MT in competition with imported product which for the most part does not bear a similar burden. U.S. nitrogen producers would additionally be facing the threat of rising natural gas feed stock costs as other industrial companies and utilities switch to gas from coal and oil to minimize their own CO2 exposure.
Our closing message to our friends in Washington...Don’t drink the Kool-Aid.
Author: WPON
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Hell hath no fury like a Farmgirl scorned
April 21, 2009
We don’t personally know New Zealand lass Nadine Porter, but South Island Fertilizer Emperor and Ravensdown CEO Rodney Green apparently does. And the young lady is suggesting that the Emperor has no clothes, amongst other failings. High also on her list is the fact that Rodney’s farmer cooperative has gone into competition with its own members by importing livestock feed. In a post …Smooth Operator… on her Farmgirl blog, Nadine suggests that “…Rodders in all his preened public relations finery…” is now trying to talk his way out of the previously identified transgression. The fury was initially unleashed in a post on 23 March: So the peasants are unhappy.
As self appointed spokespersons for Ravensdown’s international suppliers, competitors, and now it seems farmer shareholders, we would like to thank the Farmgirl for pointing out that the Emperor "… has nothing on!", a vision that we have all suffered silently with for a long time.
The Emperor is on the left in white gum boots...
Author: WPON
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