Huntsville, Ala. — The 2012 class of the Alabama Engineering Hall of Fame includes the International Fertilizer Development Center (IFDC), along with a space shuttle pilot, four aerospace engineers, a space museum, and a shipping container terminal. Maury Gaston, chairman of the hall of fame’s board of directors, said IFDC, founded in 1974 amid global food shortages, is known around the globe for helping farmers in developing countries increase the yields of their crops to help combat world hunger. Gaston remarked that the Muscle Shoals-based organization has had a tremendous impact with its fertilizer research and development, which has allowed third-world countries to dramatically increase food production, nothing that the research has also helped domestic farmers. Amit Roy, president and CEO of IFDC, responded that he is proud the organization was named to the Alabama Engineering Hall of Fame. "We’re extremely honored to be selected," said Roy, who attended the induction ceremony in Huntsville along with other IFDC officials. While IFDC has helped farmers in almost 100 countries boost their income by increasing crop yields through the use of fertilizer and improved farming methods, Roy said the challenges of feeding the world are far from over. He said IFDC researchers in the Shoals and around the globe are working to find new technologies to ensure that farmers will be able to produce enough food to feed an ever-growing world population. "In the United States, there might be one farmer who farms 2,000 hectares. In the places we work, there might be 2,000 farmers farming one hectare each," he said. "Our work is very challenging, but we are committed to making sure the global food security needs are met."
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$48,000 ammonia fine for ethanol plant
Council Bluffs, Iowa — Southwest Iowa Renewable Energy LLC has agreed to pay a $10,150 civil penalty and spend at least $38,729 on a supplemental environmental project for failing to file a risk management plan and implement risk management regulations required for storing anhydrous ammonia in excess of the 10,000-pound limitation at its dry-mill ethanol plant here. “We now have everything filed and are fully in compliance in meeting the risk management plan requirement,” General Manager Brian Cahill told Green Markets. The plant produces over 110 million gallons of ethanol per year for consumption all over the country. EPA said the Council Bluffs facility was required to file a risk management plan because it had exceeded the 10,000-pound threshold for anhydrous ammonia used in the fermentation process by storing at the time of the inspection approximately 28,000 pounds. As part of its settlement with EPA, Southwest Iowa Renewable Energy has agreed to perform a supplemental environmental project, spending at least $38,729 to purchase emergency response equipment for the Council Bluffs and Lewis Township fire departments.
Correction
The Andersons Inc. Fairmount lime/gypsum facility mentioned in the Feb. 20, 2012, Green Markets is in Illinois, not Indiana.
Oregon jury awards $36 million for damages caused to nursery by defective fertilizer
The $36 million award handed down by a Multnomah County, Ore. circuit court jury as damages for defective fertilizer used on blueberry plants being grown at a nursery and destroying them by the millions is believed to be one of the largest product liability ever awarded a Canadian company. Earlier this month the jury decided that the fertilizer produced by SunGro Horticulture, which has U.S. and Canadian operations, was responsible for the loss at J.R.T. Nurseries and damage to the company’s business reputation which had been built up for over 20 years.
Another nursery, DeZwaan Nurseries in Pitt Meadows, B.C., which had a crop of Japanese maple trees destroyed, was awarded the much smaller amount of $241,000 in damages.
According to Joseph Prodor, attorney for J.R.T. Nurseries owner Jag Aujla, the problems developed when J.R.T. switched to a new fertilizer in 2007 – Multicote 15-19-12 – produced by SunGro which has U.S. and Canadian operations, and blended by Wilbur-Ellis Co., headquartered in California. When the new fertilizer was applied again the following year – the cause of unusual symptoms at that stage still being a mystery – more dead plants was the result.
Prodor, who said he believed the $36 million to be one of the largest product liability awards to a Canadian company, said the damages were compensation for the losses of the dead plants and also for predicted future earnings. He said that Aujla’s reputation had been damaged along with his stock. "It wasn’t anything he did. He’d been doing it for years with great success, and unfortunately this horrible disaster happened," Prodor said. “It’s not over yet, however, as we expect the fertilizer companies involved to appeal the decision, which will take another two years.”
Wilbur-Ellis, which had blended the fertilizer for SunGro at its California operations, was found responsible to a lesser degree.
SunGro issued this brief response regarding the suit which has been in the legal process since 2010. “SunGro is disappointed in the verdict handed down by the jury in the trial that concluded in Portland last week. We are still in the process of digesting the contents of that decision, and are considering what course of action we will pursue next. No decision has been reached at this stage as to whether the company will file an appeal, although that remains one alternative under consideration.”
Wilbur-Ellis also expressed its disappointment with the findings and insisted that it did nothing wrong. “We are disappointed in the assignment of any liability to Wilbur‐Ellis, no matter how small, and we are considering the appropriate response. The evidence produced at trial showed that Wilbur‐Ellis merely acted as a toll manufacturer, and produced the fertilizer in question pursuant to specifications provided by our customer. There was no finding that Wilbur‐Ellis did anything improper or incorrectly with regard to the production of the fertilizer at issue.
“And while it was our customer who formulated, specified the components, and ultimately sold the fertilizer to the plaintiffs, the jury found that Wilbur Ellis was responsible for a small portion of the problem. We disagree, and continue to believe that we acted properly. Wilbur‐Ellis remains committed to providing quality products and services.”
Iowa seeks to lure OCI nitrogen plant
The Iowa Economic Development Authority (IEDA) board has awarded financial assistance to a project to build a major nitrogen plant in Wever, Iowa, by Iowa Fertilizer Co., a unit of Eqypt’s Orascom Construction Industries.
"I am very excited to announce that with action today from the Iowa Economic Development Board, Iowa is one step closer to landing the largest capital investment project in the history of the state of Iowa," said Governor Terry Branstad.
"In addition to the significant investment Iowa Fertilizer Company’s proposed project would make in southeast Iowa, it will also bring good, high-paying jobs to an area of our state that has had its share of challenges," said Lt. Gov. Kim Reynolds.
The IEDA Board approved direct financial assistance as well as tax incentives for a proposed project to build a new large-scale fertilizer plant in Wever, located in Lee County.
The company is also expected to receive local financial assistance from Lee County and the IDOT board will consider infrastructure assistance. The new plant would supply ammonia and other nitrogen fertilizers to farmers in Iowa and the Midwest. The project represents an investment in excess of $1 billion and is expected to create 165 permanent jobs.
In addition to the permanent jobs the project would create, approximately 1,500-2,000 construction-related jobs would also be expected. Debi Durham, director of the Iowa Economic Development Authority, said, "Iowa Fertilizer Company’s proposed project could have a huge impact for our entire state that will benefit us for years to come.
Economic development takes many forms but is best achieved when the assets of the location align perfectly with the strengths of the company making the investment." She continued, "That is exactly why it is essential we have the right tools to continue to compete for global projects of this magnitude."
OCI told Green Markets that it has received an offer for investment incentives from the Iowa Economic Development Authority. “The project is among several projects under consideration that have yet to be discussed by our board,” said an OCI spokesperson. “We will be making no further statements until the board comes to a decision.”
Spot Barge Prices
CVR Partners touts best financial results in history; 4Q UAN volumes double
CVR Partners LP, which owns a nitrogen plant in Coffeyville, Kan., released its fourth-quarter and year-end results Feb. 22, saying they were the best financial results in company history. CVR Partners is about 70 percent owned by CVR Energy Inc., Sugar Land, Texas, which is in the midst of a takeover attempt by Billionaire investor Carl Icahn (GM Feb. 20, p. 1).
“2011 was an outstanding year operationally and financially,” said Byron Kelley, CVR Partners president and CEO. “The facility’s production reliability rates collectively over the full year were the highest achieved since the plant opened more than 10 years ago, which is a testament to the outstanding efforts of our employees. The high level of reliability combined with the best financial results in the company’s history places us in a solid position moving forward.”
Fourth-quarter net income was $41.2 million ($.56 per diluted common unit) on net sales of $87.6 million, up from a year-ago loss of $6.2 million on sales of $39.4 million. Adjusted EBITDA was $48.4 million, up from the year-ago $7.5 million.
While some fertilizer producers have noted a definite lull in sales in the fourth quarter, particularly for potash, such was not seen for CVR – at least for its major product, UAN. UAN volumes of 184,600 st more than doubled the year-ago 73,800 st, and the plant gate price for the product nearly doubled as well, to $334/st, up from $171/st.
Ammonia sales were down at 29,300 st from 49,400 st; however, prices were up at $606/st from $491/st. Most of CVR’s ammonia is upgraded to UAN, leaving little ammonia to sell on the market.
Full-year net income was up almost $100 million, to $132.4 million ($1.48 per unit) on sales of $302.9 million, compared to 2010’s $33.3 million on sales of $180.5 million. Adjusted EBITDA was $162.6 million, up from the year-ago $52.6 million.
Full-year UAN sales were up at 709,300 st with a plant gate price of $284/st, compared to 2010’s 580,700 st and $179/st, respectively. Ammonia sales were down at 112,800 st from 164,700 st, but prices were up at $579/st from $361/st.
On Jan. 26, 2012, CVR Partners announced its fourth-quarter distribution based on available cash of 58.8 cents per common unit, which was paid Feb. 14, 2012, to unitholders of record on Feb. 7, 2012. The company has distributed approximately $1.57 per common unit since its IPO in March 2011. CVR Partners said it is raising its previous distributions guidance from $1.92 per common unit to $2.00 to $2.05 per common unit for the 12 months ending March 31, 2012.
“We are pleased to increase our guidance, which is reflective of the outstanding performance of the last three quarters of 2011 and our expectations for the 2012 first quarter,” said Kelley. “Although we have seen a number of market factors that have tempered commodity pricing in relation to those late last year, in a historical context we continue to see very good prices for the first half of 2012.
“Combined with an ongoing focus on driving operational reliability and prudent cost control, we anticipate 2012 will be another good year for CVR Partners,” Kelley continued.
For calendar year 2012, the company’s guidance range for distributions is $1.50 to $1.75 per common unit. Included in this guidance is an approximate 25 cent negative impact per common unit associated with the company’s biannual turnaround operation, currently scheduled for the 2012 fourth quarter. Normalized for the turnaround, the distribution range would be approximately $1.75 to $2 per common unit.
“As we look beyond 2012, the macro-fundamentals of our business remain solid,” Kelley said. “Continued population growth, evolution to more protein-rich diets, and increased bio-fuel consumption indicate strong fertilizer d
EPA agrees to delay numeric nutrient rules in Florida; federal judge issues mixed decision on EPA standards
The U.S. Environmental Protection Agency (EPA) on Feb. 17 agreed to delay the implementation of federal numeric nutrient criteria (NNC) for Florida waters. The EPA rules for Florida have been challenged by agriculture, utilities, and industry groups, including The Fertilizer Institute (TFI) and the Agricultural Retailers Association (ARA), who view the federal standards as too costly, over-reaching, and lacking sound science.
The EPA decision, which pushes the deadline for implementing federal water quality rules in Florida back from March 6 to June 2, came one day after Florida Gov. Rick Scott signed state legislation (Senate Bill 2060 / House Bill 7051) that proposes water quality rules developed by the Florida Department of Environmental Protection (FDEP) as an alternative to the EPA standards.
On Feb. 18, however, a federal judge in Tallahassee ruled that the March 6 deadline for enforcement still stands, at least for some aspects of the EPA standards. U.S. District Judge Robert Hinkle’s ruling upheld most of the EPA numeric nutrient standards for Florida’s lakes and springs, but tossed out EPA’s standards for Florida streams and rivers as “arbitrary and capricious.”
Environmental groups and industry both claimed victory with the judge’s ruling. “It was a victory on everything we wanted, except for a few technical details,” said Andrew McElwaine, president and CEO of the Conservancy of Southwest Florida in Naples, one of several environmental groups that have challenged the state’s proposed alternative to the EPA standards.
Earthjustice, another environmental group that first challenged EPA in court in 2008 to enforce the Clean Water Act in Florida by developing NNC, also praised Hinkle’s ruling, saying it would end a “decade of delays in setting limits on sewage, manure, and fertilizer contamination in Florida waters.”
But TFI issued a statement on Feb. 24 applauding the ruling as a restriction on EPA’s authority to impose numeric nutrient criteria in Florida. The decision, TFI said, found that biological harm, not just an increase of nutrients above background concentrations, must be the basis for EPA’s numeric nutrient standards. “A significant and potentially precedent setting part of the Court’s ruling found that the Agency did not demonstrate that increases in nutrients result in a harmful increase in flora or fauna in streams,” TFI said.
“TFI is extremely pleased with the outcome of this litigation and the overall efforts of a unified industry and agriculture community,” said TFI President Ford West. “While we rarely seek the assistance of the court, we strongly believed that the potential harm EPA’s NNC posed to Florida’s phosphate industry and Florida agriculture, along with the precedent setting nature of the EPA rule, merited a legal challenge. EPA should now return to Florida the authority to protect its own water resources."
An AIF statement also claimed a victory for industry and for the state of Florida, saying the judge’s ruling actually supports “the position that Florida knows how best to manage its own waters.” Added AIF spokesman Ryan Bantill, “It is important to remember the mandate for streams and rivers reflects a significant part of the waters that would fall under regulation. You can’t put into effect mandates ruled ‘arbitrary or capricious’ and invalidated by a federal judge.”
ARA also voiced support for the judge’s decision. “We are very pleased with the court’s finding that EPA’s proposed stream criteria, as well as certain aspects of the downstream protection values (DPV) for lakes, are both arbitrary and capricious,” ARA’s Carmen Stacy told Green Markets. “The court agreed that EPA’s method of de
Deal struck on Tampa NH3, urea shoots up
Major players have concluded new business for March, at a firm $400/mt CFR, which was the low done by Mosaic from Saudi Arabia for February.
In the meantime, spurred on by good weather, heavy movement and news that the Agrium Carseland plant will be down for up to eight weeks, NOLA urea prices have shot up. Sources were claiming the prompt market had traded as high as $450-$460/st FOB as this alert went to press.
Mosaic announces mine settlement
The Mosaic Company has announced a settlement agreement with the Sierra Club, Manasota-88, and People for Protecting the Peace River in litigation challenging the company’s federal wetlands permit at the South Fort Meade mine. This permit allows mining of the Hardee County Extension near Bowling Green, Florida. The settlement, which is subject to approval by the courts, will resolve the pending appellate and trial court proceedings regarding the permit in their entirety and allow mining at the South Fort Meade mine to proceed.
"Mosaic is pleased to have reached a reasonable agreement to end litigation that has loomed over the employees at our South Fort Meade mine for more than a year and a half. This settlement provides certainty around our South Fort Meade mine and we look forward to bringing it back to full production. We’re hopeful this agreement provides the foundation to continue our constructive dialog with these interested stakeholders as we look to the future," said Richard Mack, Mosaic’s Executive Vice President and General Counsel. "It’s especially encouraging that this settlement includes a significant public benefit by conserving the Peaceful Horse Ranch property."
Upon approval of the courts, Mosaic will soon begin mining the Hardee County Extension of its South Fort Meade mine in accordance with federal, state and local permits and approvals. The Hardee County extension will allow 10 additional years of mining at the South Fort Meade Mine, which employs more than 220 Central Floridians. The facility is one of the most efficient and cost effective phosphate mining operations in the world, historically accounting for nearly 20 percent of U.S. phosphate rock production. Since 2010, the mine has operated at a reduced capacity due to the permit challenge. Today’s settlement agreement will conclude that litigation and allow the mine to return to its full operating capacity. Any financial charges incurred as a result of the settlement are not expected to be material.
The agreement requires the plaintiffs to dismiss their challenge to the South Fort Meade permit in exchange for certain commitments by Mosaic, including:
• Preservation of approximately 130 acres of land otherwise eligible to be mined by Mosaic
• Donation of the Peaceful Horse Ranch in DeSoto County to the State of Florida or, alternatively, a not-for-profit organization for permanent conservation
• Certain mitigation, monitoring and site enhancements
• Additional efforts to obtain permanent conservation easements along the Peace River
In December, Mosaic acquired at auction Peaceful Horse Ranch, which comprises 4,171 acres located in DeSoto County at the convergence of Horse Creek and the Peace River. The property is located immediately adjacent to existing conservation lands as well as the water intake for the Peace River Manasota Water Supply Authority. The Company purchased the property for approximately $10 million.
Peaceful Horse Ranch is on the State of Florida’s list of priority projects for its Florida Forever land conservation program. Upon conveyance, Mosaic will also provide up to $2 million for startup and recurring expenses to operate Peaceful Horse Ranch as a state park in accordance with the State’s Florida Forever program plans. Its conservation will expand wildlife corridors and preserve vital habitats and floodplain, while protecting a vital water resource from approaching development.
Mosaic’s South Fort Meade Hardee County Extension is 10,856 acres, of which approximately 3,200 acres are to be preserved under the permits authorizing Mosaic’s mining activities. The existing permits preserve more than 73% of the site’s wetlands and 60% of all streams on-site. Under the terms of the settlement, Mosaic will now have access to mine more than 7,000 acres of land containing viable reserves.