Not only the smog, but nitro is used in other applications, as Don Schumacher said on NHRA Today. It's used to make fertilizer and nitro for racing is only a small percentage. So VP saying the shortage is mainly due to the smog is a red herring.
There's a growing demand for nitro due to China and India growing into superpowers. As these countries and others get more developed, their people want more and better products and standards of living.
Schumacher has 400 drums of nitro which he could sell to the NHRA but if they decline or refuse I don't blame him (Schu) for selling it for other applications. As he said, he can't sit on all those drums of nitro indefinitely if there is a demand.