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Fertilizer Plants Likely to be Delayed

April’s explosion at a Texas fertilizer plant may result in delays of $22 billion worth of North American fertilizer production projects. Analysts believe that increased regulatory scrutiny and concerns from the communities affected by the plants could not only slow new projects, but force others in populated areas to relocate.

While the cause of the West, Texas, blast that killed 14 is still undetermined, Senator John Cornyn has said he is confident the incident will lead to a review of the government’s chemical plant safety rules. Workers and safety advocates have been pushing for more federal oversight for decades, and the EPA considered regulations after the 2001 terrorist attacks. However, the idea was dropped under President George W. Bush’s administration.

Lower gas prices have made the U.S. among the lowest-cost fertilizer producers in the world, and nitrogen fertilizer is the most popular form of crop nutrient, according to Bloomberg Industries. It was anticipated that the new factories likely to be affected by the increased regulations would nearly eliminate the current need by American farmers to import 50% of the fertilizer needed in domestic production.

The nitrogen fertilizer plant projects are among nearly $100 billion in planned North American manufacturing projects spurred by the availability of abundant, low cost natural gas.

Source: Bloomberg

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