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Laid off Agrium workers in line for federal help

Posted: Monday, May 09, 2005

Agrium employees have qualified for federal benefits granted to workers who lose jobs because of pressures from foreign competition.

Federal department of labor investigators have granted the fertilizer plant's employees Trade Adjustment Assistance benefits.

"We were very pleased to see Agrium approved," said Shawna Harper, rapid response and TAA program coordinator for the Alaska Department of Labor and Workforce Development.

The TAA program was started after the Trade Act of 1974 was signed into law, giving the president broad authority to enter into international agreements to reduce import barriers. Part of that act was adjustment assistance for industries, workers and communities injured or threatened by increased im-ports.

Agrium purchases its gas from Cook Inlet gas producers and is in negotiations with them to see if additional gas can be purchased to keep the plant open.

Natural gas is a key ingredient in the production of fertilizer.

Lisa Parker, Agrium spokes-person, said while the local supply of natural gas is a factor in the plant's closure, the company has been hurt by foreign competition. Russia, which sells its nitrogen products to the same market as Agrium's North Kenai plant, sells its commodity at low prices because they can purchase natural gas cheaply, she said. This means the high gas prices on the Kenai Peninsula make it difficult for Agrium to compete in that market, she said.

An analyst disagreed that foreign competition is a driving force behind the plant's closure.

"It don't think it has anything to do with foreign competition," said Murray Leith, director of research for Odlum Brown Ltd., a British Columbia-based investment firm. Murray said he followed Agrium until about six months ago.

"I think it has everything to do with gas supply," he said.

The TAA petition was filed by Don Zacharias, superintendent of human resources. The U.S. Department of Labor received letters of support from the Alaska congressional delegation, Kenai Peninsula Borough and the city of Soldotna.

John Coston, technician and industrial hygienist for Agrium, said the assistance comes at a good time for the employees.

"Right now a lot of people are down," Coston said. "It gives them a lot of peace of mind knowing that (TAA is) there."

Agrium is not the only nitrogen facility that has had trouble in the United States. Since fiscal year 1998-99, 21 nitrogen plants have closed in the country, amounting to a 20 percent drop in production capacity, said Kathy Mathers, vice president of public affairs at the Fertilizer Institute, a trade association for producers, retailers, brokers and traders of fertilizer. The Fertilizer Institute is based in Washington, D.C.

Mathers said this is due to rising natural gas prices across the country.

While some of this production capacity has just disappeared, much of it has shifted overseas to take advantage of lower gas prices, she said.

U.S. nitrogen imports increased from 6.1 million tons of nitrogen in fiscal year 1998-99 to 10.36 million tons in fiscal year 2003 and 2004, she said.

"We are an international industry," she said.



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