New plants could supply all of North Dakota’s urea by 2017

2014-04-30T06:00:00Z New plants could supply all of North Dakota’s urea by 2017By RYAN CROSSINGHAM, Farm & Ranch Guide Farm and Ranch Guide

Three new plants, which should be operational no later than 2017, are projected to have the capability of producing enough urea to support the entire state of North Dakota.

The production of urea in North Dakota is currently non-existent, as the fertilizer that is used in the region is imported, both domestically and internationally.

“We don’t have any production of urea in the state right now,” said Dave Franzen, a North Dakota State University Extension soil specialist. “It’s all supplied from someplace else, either from other states or from Canada across the border. A sizable amount comes in by the Mississippi River into St. Paul and is railed or trucked to various places around the state.”

According to Franzen, North Dakota farmers use about 450,000 tons of urea, an agricultural nitrogen-based fertilizer, each year and the new plants are projected to collectively produce about 2 million tons of urea annually.

Franzen, who has been in the fertilizer business for 20 years, believes that having an in-state production source for urea is beneficial in a number of different ways.

“For 20 years, I’ve worried about getting it in,” said Franzen. “Two to three weeks ago it was still cold, and when it’s cold you worry when the river was going to thaw out and the logistics of it.

“If it’s manufactured in the state, it will leave some storage on site, while still producing it every day,” he continued. “The possibility that the product won’t be on hand goes down a lot. Some of it will go out of the state, but most will stay, which is a great thing for farmers in the region.”

The in-state production of urea is also expected to lower fertilizer costs for farmers, as well as easing the demand of trucking and the congestion on the railways as it struggles to support the transportation needs for both the oil and agricultural industries.

“Often times there are shortages based on timing,” said Franzen. “If a truck is going 200-300 miles, there are lines at the terminal, and with three or so loads, it can be hard to get product where it needs to be.

“The in-state production will help with road efficiency and the cost has the ability to go down because competition drives stuff.”

According to Franzen, the plants’ ability to produce efficiently and how they compete with offshore importers will determine if they are successful or not.

One of the plants will be operated by Basin Electric Power Cooperative’s subsidiary, Dakota Gasification Co., who will be adding urea production to its Great Plains Synfuels Plant near Beulah, N.D. The addition is expected to cost $402 million and the plant plans to produce 1,100 tons of urea each day.

Another plant being planned for the Grand Forks, N.D., area is being built by Northern Plains Nitrogen. It is expected that they will produce 2,400 tons of nitrogen-based fertilizer each day. The building of the plant is expected to cost $1.8 billion.

The third plant, which is expected to be operational by 2017, is being built by CHS Inc. on 200 acres near Spiritwood, N.D. The CHS Inc. plant, which will cost $1 billion to build, is expected to produce 2,200 tons of ammonia daily, which will be used during production of anhydrous ammonia, urea and UAN.

For Franzen, there are a few things that need to be taken into account when building these new plants around the state.

“Everything that you do is connecting to the system,” said Franzen. “We need to make sure the neighbors are on board and that we control safety issues by keeping space between the plants and the general populous.”

Franzen believes that if they control safety issues, that the new plants and in-state urea production could be a great thing for everyone involved.

“I don’t see a down side to it at all,” said Franzen. “(I) don’t want to call it a no-brainer, but the business plan could work really well.”

Copyright 2015 Farm and Ranch Guide. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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