All Posts from February 12, 2007

Agrium to pay $750,000 in civil penalties; action taken over former Royster-Clark nitric acid plant

Featured, News

Agrium Inc. will have to pay $750,000 in civil penalties to settle violations of the New Source Review (NSR) provisions of the Clean Air Act uncovered by the Environmental Protection Agency at the former Royster-Clark Inc. North Bend, Ohio, nitric acid plant. It also agreed to install state-of-the-art pollution control equipment at the facility that will reduce nitrogen oxides (NOx) emissions by more than 200 tons per year. Agrium bought Royster-Clark in early 2006.

An Agrium spokesman told Green Markets that the company knew of possible liabilities at North Bend, but did not know their full extent until EPA took action.

EPA issued Notices of Violation to Agrium US Inc. and Royster-Clark Inc. in October 2006 for making construction modifications to a North Bend, Ohio, facility in the mid-1990s without first obtaining necessary federal pre-construction permits and installing the required pollution control equipment. The un-permitted modifications caused the facility to emit more NOx than allowed by federal law. The facility releases NOx as part of its nitric acid production process.

“This company increased its profits by ignoring environmental laws,” said Granta Nakayama, EPA’s assistant administrator for enforcement and compliance assistance. “The EPA will continue enforcing against companies that refuse to comply with regulations intended to protect public health and our air, water and land.”

The Clean Air Act requires that major sources of air pollution must first obtain a permit before making any changes that would result in a significant emissions increase of any pollutant. EPA’s regulations ensure that air quality is not significantly degraded from the addition of new and modified factories, industrial boilers, and power plants. EPA said its national goals include focusing on improving compliance among certain industries with significant potential for environmental harm due to air emissions. These industries include acid production, cement manufacturing, and glass manufacturing facilities.

The settlement will be filed with the Southern District Court of Ohio for 30 days to allow for public comment. The companies are required to pay the penalty within 30 days after the court approves the settlement.

Green Markets audio conference speakers detail ‘exciting’ challenges in 2007

Featured, News

Nearly 140 listeners, representing more than 55 companies from the U.S. and overseas, tuned in to Green Markets’ second annual Agricultural and Fertilizer Outlook audio conference on Feb. 7. The interactive event allowed registrants to listen via telephone to three industry experts who talked about a range of issues, including 2007 planting intentions, the volatile urea and phosphate markets, and the distribution pressures currently facing the retail market.

Rich Pottorf, chief economist and Washington editor of Doane’s Agricultural Services, headed off the conference by detailing the expected increase in corn acreage to 87.1 million acres in 2007, calling this “the most exciting time in 30 years” for agriculture. Pottorf noted other significant cropping changes and the economic factors driving them, and said corn acreage will need to rebound “a lot” in subsequent years to keep pace with the surging ethanol industry.

Don Lauriente, senior fertilizer industry consultant and president of DH Lauriente Consultants Ltd., offered a detailed analysis of global consumption and capacity figures for urea and ammonium phosphate, referring to urea as the nitrogen growth product that is dominating the global nitrogen trade. Lauriente said the world ammonium phosphate balance has strengthened, while production and capacity remains heavily concentrated.

Dave Coppess, vice president of sales and marketing for Heartland Co-op in West Des Moines, Iowa, wrapped up the event with an in-depth look at the issues facing the retail sector in 2007 and beyond, focusing on product availability, distribution challenges, and ongoing environmental pressures at the local level.

Listeners were allowed to pose questions to the panel, either by email or by telephone, at the conclusion of the presentations. An audio recording of the conference is available on CD-ROM for $199, and can be ordered by visiting http://www.pf.com/eventDetail.asp?id=43&type=2. Audio recordings of past Green Markets audio conferences can also be ordered at http://www.pf.com/events.asp.

CF net income up for 4Q, year

News

CF Industries Inc. reported increased net income for both the fourth quarter and year ending Dec. 31, 2006. Fourth-quarter net income was $8 million ($.14 per share) on sales of $506.2 million, versus the year-ago loss of $12.8 million ($.23 per share) and $463.0 million. CF said the earnings were driven by increased sales volumes and improved nitrogen margins.

For 2006, CF reported net income of $33.3 million ($.60 per share) on sales of $1.95 billion, versus a 2005 loss of $39.0 million ($.71 per share) on sales of $1.91 billion. The 2005 figures were reported on a pro forma basis, and the loss was due primarily to items related to the company’s IPO.

Noting Doane Agricultural Service’s forecast for 87.1 million of corn acres this spring, CF chairman and CEO Stephen Wilson noted that CF has an extensive presence in the U.S. Corn Belt and is poised to take advantage of this opportunity. Wilson also noted the moderation of U.S. gas prices, and rising gas prices in other nitrogen exporting nations – Ukraine, Belarus, and Romania. These, coupled with high ocean freight, have made imports less competitive in the U.S. market. Wilson tempered his enthusiasm, noting that the weather, more imports, higher gas, and other factors can still impact the market.

CF said as of Feb. 6 that bookings for all of 2007 under its forward pricing program (FPP) were 1.9 million tons, up from nearly 1.4 million tons at a comparable time last year.

Fourth-quarter nitrogen gross margins were $31.8 million on sales of $384.7 million, versus the year-ago negative margin of $6.4 million on sales of $358.2 million. For 2006, nitrogen margins were $98.5 million on sales of $1.47 billion, versus 2005’s $172.9 million and $1.47 billion.

Fourth-quarter phosphate gross margins were $11.1 million on sales of $121.5 million, up from the year-ago $8.7 million and $104.8 million, respectively. For 2006, margins were $48.7 million on sales of $482.3 million, versus 2005’s $36.3 million and $438.7 million, respectively.

CN conductors threaten strike

News Briefs

Montreal-Conductors working for the Canadian National Railway Co. in Canada have threatened to go on strike at midnight Feb. 10 if contract talks with CN management over pensions and working conditions are unsuccessful. The United Transportation Union-Canada represents about 2,800 conductors and yard service personnel, while the Cleveland-based international union represents roughly 125,000 active and retired railroad, bus, and mass transit workers in the U.S. and Canada.

Corps limits barge widths due to icy locks

News Briefs

Alton, Ill.-Citing bitter cold and ice buildup on some Mississippi River locks and dams, the Army Corps of Engineers on Feb. 5 announced limits on the widths of barge tows on nearly 100 miles of the river, from Clarksville, Mo., south to near St. Louis. That directive came two days after a 15-barge tow got stuck in the 1,200-foot-long main chamber of a lock and dam near Alton, Ill., forcing the closure of the main chamber for several hours until other tow boats could free the trapped tow.

TFI issues policy paper to aid in Farm Bill debate

News Briefs

Washington, D.C.-The Fertilizer Institute on Feb. 8 released a farm policy brochure, Fertilizer’s Role in Agriculture, which TFI said was developed as a tool for use in the farm bill debate and a means of quantifying the contribution of fertilizers to the nation’s agricultural productivity. The brochure, which is available at TFI’s website at www.tfi.org, outlines the role of fertilizer in the production of food, feed, fuel, and fiber, and stresses TFI’s policy as it relates to the 2007 Farm Bill.

TFI working with EPA on supplemental NH3 RMP

News Briefs

Washington, D.C.-The Fertilizer Institute reported that EPA Region 7 has developed a supplemental Risk Management Program (RMP) guidance document for anhydrous ammonia agricultural retail facilities. EPA has asked TFI to provide comments by Feb. 20 on its Supplemental Risk Management Program Guidance for Anhydrous Ammonia Agricultural Retail Facilities. TFI reported that it has briefed EPA on myRMP, the web-based guidance materials that were developed by TFI and are administered by the Asmark Institute. TFI said it intends to give EPA access to myRMP, which is available to members on the TFI website, and that it will be working the EPA Region 7 to ensure that the guidance documents are uniform. TFI said it believes EPA intends to publish its guidance document and make it available to all retailers.

Fire damages Kemira nitric acid plant

News Briefs

Tertre, Belgium-Kemira GrowHow Oyj’s nitric acid plant in Tertre suffered a fire Feb. 3. The fire was contained inside the plant, and there were no human injuries or environmental incidents. Other buildings in the area remained safe, and the two other nitric acid plants at the area continue normal production. The fire caused production interruptions that will last approximately ten weeks, according to preliminary estimates. Kemira said the plant is insured for property damage and business interruption. The production interruptions will reduce fertilizer production at Tertre by approximately one-fourth during the shut-down, but Kemira said the interruptions would not affect industrial customers.

Terra income up for 4Q, off for year

News Briefs

Sioux City-Terra Industries Inc. reported net income available to common shareholders of $10.3 million ($.11 per common share) on revenues of $449.5 million for the fourth quarter ending Dec. 31, 2006. Income was up $26.7 million over the year-ago loss of $16.4 million ($.17 per share) on revenues of $513.4 million. For 2006, Terra reported a net loss to common shareholders of $900,000 ($.01 per share) on revenues of $1.8 billion, versus 2005’s net income of $17.0 million ($.18 per share) on revenues of $1.9 billion. Fourth-quarter revenues were lower by $64 million, mainly due to lower product prices, with ammonia prices off 17 percent, UAN 15 percent, and urea 23 percent. This was related to lower natural gas prices. In addition, the company reported lower operating rates at its Trinidad ammonia plant. It expects lower operating rates until repairs are completed during the first quarter of 2007. As for 2006 results, Terra said revenues were down mainly due to lower UAN and AN sales volumes, which were affected by lower overall fertilizer consumption during planting season. Overall, Terra noted that first half operating rates were only 74 percent, which resulted in higher costs for purchased products and reduced plant efficiencies. Second half improved due to more stable gas prices and higher grain prices.

The Andersons report record revenues, EPS

News Briefs

Maumee, Ohio-The Andersons Inc. reported record revenues and income earnings per share for the year ending Dec. 31, 2006. Net income for the year was $36.3 million with diluted earnings per share of $2.19, which beat earlier guidance. Revenues were $1.46 billion. Net income for 2005 was $26 million ($1.69 per share) on sales of $1.3 billion. Fourth-quarter net income was off at $13.8 million ($.76 per share) on sales of $463.4 million, versus the year-ago $15.3 million ($.99 per share) and $384.4 million, respectively. Fourth-quarter and annual results for the company’s plant nutrients group were off. The company said farmers reduced applications due to higher energy and input costs during the growing season. This resulted in lower wholesale and retail demand for nutrients, including a deferral of fall season purchasing and a reduction in the group’s gross profit and operating income. For 2006, operating income was $3.3 million on sales of $265 million, compared to 2005’s $10.3 million and $271.4 million, respectively. Fourth-quarter operating income was $1.3 million on sales of $67.1 million, versus the year-ago $1.6 million and $60.4 million.

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