Wenatchee, Wash. — Custom Apple Packers Inc. of Wenatchee is saying that it had a risk management plan for anhydrous ammonia all along, and filed it with the Environmental Protection Agency (EPA) in Seattle. But EPA claims otherwise, and decided Custom Apple should pay a fine. “We went along for about five years assuming our plan was in place,” insisted Attorney Jim Brown of Wenatchee. Brown said, recounting that in 2009 EPA conducted an audit of Custom Apples and informed the company it needed the plan, which either didn’t get to them or got misplaced. “Put it this, they have no record of having the plan in 2009 updated as part of a regular five-year process and resubmitted that year. “They said they never got the original plan and considered us out of compliance for those years,” Brown related. “We couldn’t prove our position so we decided to settle rather than litigate.” In the meantime, he added that there never were any ammonia releases, so there never was any problem.
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Residents oppose explosives firm moving in
Woodland, Wash. — Northwest Energetic Services admits being taken off-guard by local residents objecting because of safety and other concerns to the blasting company’s plans to consolidate operations in Oregon in the Woodland area. Property owners have raised questions about bringing materials like ammonium nitrate and increased tanker truck traffic to a landslide-prone area. Residents also told Cowlitz County commissioners they were worried about chemicals contaminating well water and noise from trucks on their quiet rural road at 4:00 a.m. in the morning. “We’ve been in business in Washington going on 60 years, and during that period we’ve always tried to be good neighbors and comply with whatever local and other regulations that affect our particular industry,” Edward Coulter, Northwest Energetic Services general manager, told Green Markets. “I’ve been somewhat surprised that the reaction has been as negative as it has been at times, but I also understand that a person’s home is usually their greatest single investment.” Coulter said the company has held two public meetings thus far and is contemplating a third one. “We’ve responded to every question for information from periodicals, newspapers, and individual home owners,” he added. “And we have not had any transportation and storage related problems.” Cowlitz County Commission Chairman George Raiter has told residents that the county doesn’t have the ability to pick and chose what happens on private property as long as owners meet local, state, and federal regulations. "Some things are unpopular, but we live under the rule of law," Raiter insisted. "If your neighbor wants to paint his house purple, he can do that. … Unless you buy all the property around, they can do this." The land selected by Northwest Energetic was formerly timbered and doesn’t have a zoning designation, meaning a zoning change won’t be required. Company officials said they are completing a study to test the stability of the land.
Potato growers get fertilizer tips
Because soil throughout the West is highly alkaline, spud growers who attended the 44th Annual Idaho Potato Conference on Jan. 18 were urged to carefully monitor and regulate their phosphate fertilizer applications to ensure bountiful crops.
Hundreds of potato producers from throughout the state and Northwest converge at Idaho State University in Pocatello each year to attend the conference and the simultaneous Idaho Ag Expo, where the latest in large harvesting equipment is displayed at Holt Arena.
“Try to get the concentration of phosphorus early when the root demand is high,” panelist J.P. Kruckeberg of Stuckenholtz Laboratory in American Falls admonished dozens of growers who packed an ISU meeting room. He said he has seen good success over the years efficiently applying phosphate concentrates in water.
Kelly Hurst, a Blackfoot agricultural consultant, cautioned against plugging irrigation wheel line nozzles with center pivots when broadcasting liquid fertilizer on fields. “Water-run phosphorus should be looked at as a supplement, not the main course.”
Depending on the soil, which usually has a high pH level, there can be “a huge difference” in the amount of phosphorus needed for efficiency, Hurst said, noting that land intensely farmed for many years with phosphorus applications generally tests low for acidity. He recommended using good starter fertilizers for potatoes. “We’re dealing with a short season. The crop needs a good boost.” Starter fertilizers are needed at the start of a growing season because research shows phosphorus already in the soil is “in a lock box, not a bank account where you have easy access.”
Kruckeberg said it is important to have a reserve amount of phosphorus in the soil for good root growth. Phosphate does not move much in soil, unlike nitrogen and sulfur.
Travis Morgan with Bingham Cooperative of Blackfoot warned about improperly mixing liquid fertilizer in spray tanks. “It’s not fun to pump a bunch of Jello out of the tank,” he said.
Amber Moore, a University of Idaho extension soils specialist from Twin Falls, noted plants are designed to take up nutrients through their roots, not leaves. Potatoes have a “tremendous network” of roots near the surface, Hurst added.
Panelists agreed matching zinc with phosphorus is important because most soils tend to be low in zinc. Feed lots and corrals have high phosphorus levels.
Hurst advised growers to be cautious with new phosphate fertilizers that can be so cost prohibitive that farmers would be tempted to neglect boosting low phosphorus levels in soil. “There are whole different variations. There’s good, bad, and ugly to anything.”
Asked about comparative yields of fertilizer phosphate versus manure phosphate, Hurst said he would avoid using manure in potato fields, noting manure and compost behave differently. It is difficult to spread manure easily, but extremely good crops of potatoes can be raised with compost, panelists said.
Simplot seeks to increase sulfuric acid capacity
The J.R. Simplot Co. has filed an air quality permit request with the Idaho Department of Environmental Quality (IDEQ) to modify a sulfuric acid plant at its integrated fertilizer complex west of Pocatello, Idaho. The permit to construct asks for a production increase, but a decrease in allowable sulfur dioxide emissions from the Power County plant, which produces phosphate, nitrogen, and sulfate commercial fertilizer.
Simplot operates two sulfuric acid plants, an ammonium sulfate plant, a wet process phosphoric acid plant, a super phosphoric acid plant, three granulated fertilizer plants, and several natural gas-fired steam generators at the site.
Simplot is discussing with the U.S. Environmental Protection Agency settlement of Clean Air Act liabilities related to its two sulfuric acid plants. If an agreement is reached, it could significantly reduce sulfur dioxide emissions.
To meet targets, Simplot must implement changes to the No. 400 plant beginning this June. Other changes are planned for scheduled plant turnarounds in 2014 and 2016. Once they are completed, allowable SO2 emissions are expected to drop from four pounds per ton to 1.7 pounds per ton.
Production capability at the No. 400 plant is expected to increase to an average 2,500 tons per day. Allowable SO2 emissions are expected to be reduced nearly 700 tons annually, and actual emissions by more than 200 tons a year. Simplot proposes to cut plant emissions in two steps the next four years.
The No. 400 plant uses a double absorption contact process to produce sulfuric acid from elemental sulfur, which is burned in a furnace to produce an SO2 gas stream, which is then cooled in a waste heat boiler before it is routed to a multi-pass, four-bed catalytic converter. There, it reacts with oxygen to form sulfur trioxide.
After a third catalyst bed, the SO3 gas stream is cooled and sent to an intermediate absorbing tower, where exhaust gas is reheated and returned to the catalytic converter, where it passes through a fourth and final catalyst bed.
The gas exits the converter, cools, and then routes to the final absorbing tower, where virtually all of the remaining gas is absorbed into a concentrated sulfuric acid solution.
The exiting gas, which contains nitrogen, oxygen, unreacted So2, and NOx, then passes through a set of mist eliminators and the No. 400 plant stack.
Planned 2012 changes include replacing the final absorbing tower and mist eliminators, installing a new final absorber acid feed cooler, upgrading the capacity of the final absorber acid feed and product pumps, replacing the product dilution cooler with a larger unit, installing a new cooling tower, installing a cesium promoted catalyst in the converter, and making various improvements to infrastructure, electrical, and instrumentation systems. Virtually all of the planned changes during the next four years modify the No. 400 plant. Only the new cooling tower represents construction of a new emissions unit.
If all the planned changes are made, Simplot anticipates the No. 400 sulfuric acid plant’s production capability will increase by about 9 percent on an annual basis. While some of the additional sulfuric acid may be used in producing fertilizer at the Don Plant, some may also be exported to customers.
Historically, the plant has imported raw sulfuric acid when demand outstripped supply. Conversely, the Don Plant also has exported sulfuric acid when production exceeded internal demands. The maximum sulfuric acid imported in the last 10 years was in 2008, when more than 25,000 tons of sulfuric acid were imported. Maximum exports totaled more than 57,000 tons in 2007.
A public comment period will be provided on the proposed permit if a written request is submitted to IDEQ by Friday, Jan. 27.
CVR adopts stockholder rights plan
CVR Energy Inc. announced late in the day Jan. 13 that its board of directors has adopted a Stockholder Rights Plan with a 15 percent threshold, and declared, in conjunction with that plan, a dividend of one preferred stock purchase right for each current share of the company’s outstanding common stock, which will be distributed to stockholders of record on Jan. 23, 2012. CVR owns a major stake in CVR Partners LP, which owns a nitrogen plant in Coffeyville, Kan. Stockholders with existing positions above 15 percent will be grandfathered as discussed below.
The news comes soon after billionaire investor Carl Icahn increased his stake in CVR to over 10 percent (GM Jan. 16, 2012). Icahn is known for his corporate takeovers.
CVR said the plan is intended to ensure that all stockholders receive fair and equal treatment and maintain the ability to realize the long-term value of their investment in the company. It will also simultaneously protect against inadequate or coercive takeover attempts, or other tactics that might be used to gain control of the company without negotiating with the board or paying all stockholders a fair price for their shares. The board said the plan is not designed to prevent a takeover or an offer to acquire the company, but rather to allow the board adequate time to consider any and all alternatives that are presented.
The rights initially will trade with the company’s common shares, and will only become exercisable if a person or group acquires beneficial ownership in the company of 15 percent or more of its common stock in a transaction not approved by CVR Energy’s board. Any person or group holding existing positions of 15 percent or more at the time of the announcement of the plan will be grandfathered and exempt from the plan. However, any additional acquisitions of common shares (other than pursuant to a dividend or distribution paid or made by the company or pursuant to a stock split or reclassification) by such person or group will cause the rights to become exercisable. Under the plan, certain synthetic interests in the company’s common shares created by derivative positions – whether or not such interests are considered to be beneficial ownership of shares of common stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act – are treated as beneficial ownership of the number of shares of the company’s common stock equivalent to the economic exposure created by the derivative position.
If the rights become exercisable, all rights holders (other than the person or group triggering the rights) will be entitled to purchase the company’s common stock at a discount. Rights held by the person or group triggering the rights will become void and will not be exercisable.
The plan will expire on Dec. 31, 2012, and may be redeemed at any time by the board prior to that date. The distribution of the rights is not taxable to stockholders. Additional details on the rights plan will be contained in a Form 8-K to be filed with the U.S. Securities and Exchange Commission.
Ammonia
U.S. Gulf/Tampa: Negotiations for a new February price for Tampa were scheduled to begin on Jan. 20. Prices for Yuzhnyy/Black Sea recently dropped about $45/mt (GM Jan. 9. 2012), and that could be reflected in the new Tampa price.
In the meantime, there were rumors at NOLA that a deal may have been struck, but there were no details. Sources said if it did indeed occur as a spot sale, it would have been well below $612/st FOB. Since the NOLA market now has extra tons from Mosaic and new tons from the OCI Beaumont plant, sources say it is not surprising.
The Henry Hub NYMEX natural gas price continued to crash last week, offering even more of a boon to U.S. domestic ammonia producers. Sources said they could afford to lower ammonia prices as a result. The price settled on Jan. 19 at $2.322/mmBtu.
U.S. ammonia imports for November were down 13 percent, according to the U.S. Department of Commerce, to 581,171 st from the year-ago 671,847 st. July-November imports were off only 4 percent, to 3.11 million st from 3.23 million st.
Eastern Cornbelt: A steady run of ammonia on corn ground in early January resulted in some tight supplies out of Illinois terminals, but activity was slowed by winter weather conditions at mid-month. The anhydrous ammonia market remained in the $650-$660/st range FOB regional terminals.
Up to eight inches of snow was expected in northern Illinois by Jan. 20 as a strong storm pushed its way through the region. The storm brought frigid temperatures as well, with lows dropping to the single digits late on Jan. 19. Winter weather advisories were also in place late in the week for northern Indiana, northwestern Ohio, and southwestern Michigan, with three to seven inches of snow expected.
Western Cornbelt: The Western Cornbelt got another dose of winter weather at mid-month. Up to seven inches of snow was expected in northern Iowa late in the week, with lesser amounts in central and southern Iowa and parts of Nebraska. Eastern Iowa saw snowfall ranging from two to six inches on Jan. 19, and parts of the state were also bracing for single-digit temperatures late in the week.
One Missouri source reported a “rollercoaster” of weather changes in his location last week, with temperatures dropping from 50 degrees on Jan. 17 to just six degrees early Jan. 18. The unseasonably warm weather in early January unleashed a torrent of ammonia applications on row crop ground, with some sources reporting five-hour truck lines at terminals. That brisk demand also resulted in some supply outages at terminals.
After what one source described as “spotty” fall demand, the heavy January fertilizer movement was appreciated. “This will definitely take some pressure off of spring,” said one contact, who noted that his location was also seeing heavy dry spreading activity in early January.
Sources quoted the ammonia market in the $605-$645/st FOB range at mid-month, with the low in Nebraska and the upper end out of Missouri terminals. Dealer pricing out of Iowa terminals was tagged in the $610-$620/st FOB range, while delivered ammonia in the Missouri market was pegged at $630-$650/st last week, depending on the point of origination. Sources even talked of delivered tons coming out of North Dakota to meet the region’s brisk ammonia demand.
California: Anhydrous ammonia was steady at $820-$825/st truck-DEL in California, with aqua ammonia referenced at the $219/st FOB level in the state. Several sources said a pricing adjustment may be on the books in the near term, however.
California was bracing for some long-overdue precipitation as the week advanced. Sources talked of “significant moisture” moving into the state last week, which comes after weeks of unseasonably warm a
Urea
U.S. Gulf: The supply of urea was not overly abundant last week, but prices were weaker, which could be the result of a ship getting ready to arrive and unload for CHS, according to sources. The paper market was lower than the cash market, and one trader said it may be a case of the tail wagging the dog.
Expectations were for higher prices in the near future because of the big corn acreage expected in 2012. Product was said to be moving well in the Dakotas and the Twin Cities areas.
Generally, prices were weaker than the previous week, and fell to as low as $390/st FOB and as high as $408/st FOB. The lowest price was paid late in the reporting period, while the high was early in the week.
Urea imports were off 3 percent in November, according to the DOC, to 473,577 st from the year-ago 487,651 st. July-November imports, however, were up 14 percent, to 2.54 million st from the year-ago 2.23 million st.
Eastern Cornbelt: Granular urea pricing remained in the $445-$450/st range FOB Eastern Cornbelt terminals at mid-month.
Western Cornbelt: Granular urea was tagged at $435-$450/st FOB regional terminals, with both the high and low ends reported in Missouri. An Iowa contact pegged the dealer market at the $445/st FOB level at midweek. Urea pricing out of Inola, Okla., was quoted in the $435-$440/st FOB range.
California: Sources tagged the granular urea market in the $525-$565/st FOB range in California last week, depending on location and supplier. One source tagged the dealer reference level at the $535/st FOB level in his trade area.
Pacific Northwest: The urea market in the Pacific Northwest had ticked up slightly from last report. Sources pegged the regional market in the $490-$525/st DEL range at mid-month, with the low in Montana and the upper end reported by Washington sources.
Western Canada: Reference pricing for granular urea in Western Canada remained at $660-$680/mt DEL, with the low end reported in Manitoba and the upper numbers in the Alberta market. There were reports of lower prices being quoted on a spot basis, however; one British Columbia contact reported offers last week as low as $600/mt DEL from some suppliers.
Pakistan: The TCP tender closed Jan. 19 with offers centering in the $430s/mt CFR.
The price level was no surprise to industry watchers. When the previous tender closed, the winning offer of $417.50/mt CFR was described as an aberration. Five of the next lowest offers in that tender were in the $430s/mt FOB. Several more were in the $440s and $450s.
None of the companies at that time were willing to match the Transfert offer of $417.50/mt CFR. As a result, TCP called a follow-up tender.
The Pakistan buying house was looking to pick up 300,000 mt this month. The first tender only yielded 50,000 mt. Sources said the tightness of the offers this time around could allow TCP to get its remaining 250,000 mt.
The tally of the tender follows.
| Offering Company | Quantity (‘000 mt) | US$/mt CFR | |
| Firm | Quantity | ||
| CHS | 50 | 50 | 431.45 |
| Dreymoor | 50-60 | 40-100 | 431.76 |
| Incitec Pivot | 50 | 50 | 432.45 |