The deadly fertilizer plant explosion in Texas may hold back expansions and business worth $22 billion in the region, according to a Bloomberg report.
Apparently, many large industry players are planning expansions in the North American region. But the blast has raised apprehensions among regulators and communities to grant permission for setting up such plants or factories.
The Texas Gulf region is a source of attraction to fertilizer investors because of the availability of natural gas, which accounts for 70 percent of the fertilizer manufacturing cost.
After the blast, regulators and inspectors are prescribing stricter safety measures, hoping to avoid such disasters. This may lead to delaying or cancellations of many planned projects in the region.
However, for some this may prove a blessing in disguise. The fertilizer industry is taking this as a positive sign, especially those who were concerned with the oversupply of fertilizers in the market. A quarter forecast by Rabobank, a Dutch financial institution, predicted that the supply of fertilizers will outdo demand throughout the first quarter of 2013.
But will the regulations minimize the risk of such disasters?
Critics and experts are not very sure about the regulations. Initiatives to tighten regulations have hardly proved effective in the past.
The fertilizer plant owner has now been sued by a single mother and several insurance companies. According to the Huffington Post, two lawsuits have been filed against Aldair Grain Inc. which is the parent company of the plant.
"The company was negligent in the operation of its facility, creating an unreasonably dangerous condition, which led to the fire and explosion," a lawsuit filed by insurance companies on behalf of individuals, two churches, and businesses including a Chevrolet car dealer and a bakery, read.
The blast had killed around 14 people. Apart from injuring scores of people, the explosion also demolished 60 to 80 homes. While a 50-unit residential building was completely blown up, a middle school and the West Rest Haven Nursing Home were also badly damaged.
