Northern Plains corn growers are eyeing the construction of a world-scale, $1 billion nitrogen plant, with the possibility of using natural gas, which is currently being wasted.
Corn growers in the tri-state area of North Dakota, South Dakota and Minnesota say they have become weary of being at the end of the line in the fertilizer chain. They’ve been looking at this problem for quite some time and now believe their own fertilizer plant is the answer.
Darin Anderson, president of the North Dakota Corn Growers Association (NDCGA) explained the situation this way: “In the tri-state area there’s only one nitrogen facility. As of right now if the plant went down we’d be in a pinch.” Anderson recalled last spring when the plant in Beulah in North Dakota had a fire and local prices went from $800 to $1,100 a ton for anhydrous ammonia.
“Because we don’t have a very large supply, any disruption can cause a lot of volatility and we are hoping to reduce that. We’ve been looking at this for a long time and our feasibility study has been completed and it was positive to the point we voted to go ahead with our plans. We’re working on the production mix and then moving into planning the design and are narrowing down the location as we speak.” Anderson added that the panel is looking into more than one nitrogen product from the plant.
Tom Lilja, NDCGA executive director added that the problem has been building over the years. “Actually this area has been at the end of the line for fertilizer distribution and there’s a bit of a hole up here and we feel this could potentially solve the problem,” Lilja remarked. He said Anderson and his steering committee have been looking into the problem for some time and have now decided to move from assessing the feasibility into the business planning stage that could result in a world-scale nitrogen fertilizer plant.
The committee made up of growers along with input from fertilizer industry consultants has voted to proceed on this course recognizing that nitrogen fertilizer usage in the Northern Plains is likely to continue to increase in the next several decades, and a fertilizer production facility located where the fertilizer is consumed will result in transportation advantages while addressing the need for a stable local supply. Two of those on the committee include Larry Mackie of Mackie International Inc. and Don Pottinger, former fertilizer industry CEO, currently with his own independent consulting company.
Researchers also have their eye on an abundant source of natural gas which presently is being burned off or flared in oil well operations in the state. Presently some 30 percent of the natural gas produced in North Dakota is burned as waste. The committee agreed however that the resource still needs a lot of development. Presently research is being carried out under a grant at North Dakota State University to determine the feasibility of collecting the natural gas and converting it to ammonia.
Meanwhile, the steering committee has been looking at other advantages including direct ownership in which farmers would be offered ownership in the facility; a more secure supply since a majority of the country’s nitrogen fertilizer needs are now imported; and a benefit to the economy from a facility which would require a skilled workforce resulting in well-paid, long term jobs.