Natural gas deregulation and U.S. ammonia production

Abstract

Natural gas price deregulation in the United States as scheduled under the Natural Gas Policy Act of 1978 will likely increase domestic industrial natural gas prices by 1985. This increase in natural gas prices will substantially reduce producers' surplus of domestic ammonia producers by raising costs of production at a time of increasing imports and declining growth in ammonia demand. Potential plants exits and changes in producers' surplus and domestic production and prices of ammonia are analyzed under alternative ammonia demand, import, and natural gas pricing assumptions.