Wolfram: Pipelines can help farmers
The average American would likely struggle to imagine a time in which a single apple cost $5 or a gallon of milk cost $10.
And they would have an incredibly difficult time picturing a world with no grocery stores or food markets. Nonetheless, the harsh truth is that without a safe and stable agricultural economy, both scenarios are simply not farfetched at all. Americans spend less on food and water than any other country on the planet, on average spending less than 10 percent of their household income on food.
We as Americans are fortunate to live in a country that places such an emphasis on ensuring access to a safe and affordable food supply. In turn, we must do all we can to guarantee agriculture’s success decades into the future through building the necessary infrastructure to provide farmers and ranchers with the resources they require to continue growing our food, fuel and fiber.
Underground pipelines safely and efficiently transport natural gas, which in recent years has become an essential on-farm input and one that most American farmers can no longer operate without. Proposed development projects like the Rover Pipeline can accomplish that goal.
For the average American farmer, energy expenses account for well over 30 percent of total production costs. For the last 40 years, natural gas has provided between one third and one half of the fossil fuel energy used by American farms, making it an increasingly valuable on-farm commodity. Infrastructure improvements like Rover will lower operating costs for ag producers by giving them a new stream of affordable and reliable natural gas with which to power their operations. Those savings will then be passed along to the purchasers of agricultural products, including both commercial and private users benefiting the economy as a whole.
Energy on farms is consumed in two ways: directly through resources like electricity and gasoline, and indirectly through resources like fertilizer and pesticides. Natural gas represents almost 70 percent of the cost in manufacturing fertilizer, which itself accounts for over half of all indirect energy consumption on U.S. farms.
Without convenient access to a reliable stream of natural gas, the price of products like fertilizer will continue to rise and farm profitability will continue to decrease. This is why energy infrastructure development projects like the Rover Pipeline are critical to the industry.
However, not only is the Rover Pipeline one of the keys to providing farmers and ranchers with the energy they need to continue growing our food, but it is in itself an economic powerhouse that is sure to benefit every county and state it passes through. Overall, Rover will invest over $3.7 billion in the nation’s local and state economies and create over 10,000 construction jobs. Roughly 76 percent of the pipeline’s materials will be manufactured here in the United States as well, giving our regional manufacturers and distributors a whole new customer base for their respective businesses.
It is equally important to realize that underground pipelines have proven for decades to be the safest means of transporting energy products, including natural gas. Underground pipelines have the lowest number of incidents when compared to truck and rail methods by a margin of 10 to 1. There is perhaps nothing more important to America’s farmers than protecting the health and vibrancy of our farmland and the Rover Pipeline will help us to do just that.
Thanks to America’s farm families, our food supply is the most diverse, vibrant and plentiful in the world and therefore infrastructure projects like the Rover Pipeline that will provide farmers with the resources they require to stay in business deserve a timely approval by federal regulators.
Gary Wolfram is a professor of economics at Hillsdale College.