Access to water, gas, transportation key in Grand Forks' selection for fertilizer plant
GRAND FORKS - The selection of 320 acres northwest of town as the site of a proposed $1.5 billion fertilizer production plant came down to plentiful land and water, said developers, announcing the project Thursday.
"I do drool over that site. It's as good as it gets," said Larry Mackie, chief operating officer of Northern Plains Nitrogen. "The site you folks offered is absolutely perfect."
The nitrogen fertilizer facility Mackie's group is planning will be next to Grand Forks' municipal wastewater lagoons, about 1 mile west of Interstate 29.
Thursday's announcement was organized by the Grand Forks Region Economic Development Corp. and attended by city officials, Gov. Jack Dalrymple and the project's principals.
Planners want to break ground for the project in 2015 and have the plant running in 2017. It will need about 2,000 workers for the construction phase and will employ 135 once completed, they say.
"It's good for our city, good for our region and good for the entire state of North Dakota," said Grand Forks Mayor Mike Brown.
What makes the site so desirable, Mackie said, are the flat, open land and its access to the "gray water" from the city lagoons for the plant's required supply of 4,000 gallons per minute.
"The key parameter in choosing this site is water," Mackie said. "We're going to make good use of that valuable resource."
The company will negotiate with the city for use the wastewater, along with about 900,000 gallons of potable water a day, and for the treatment of discharged water at the city sewage facility.
Grand Forks Director of Public Works Todd Feland said city staff next week will bring initial water use plans to a City Council committee.
The other vital factors in the site selection were access to transportation, with a BNSF rail line, Interstate 29 and U.S. Highway 2, and natural gas from nearby pipelines.
The topography of the site was another attraction.
"It should be level, and you don't get a site more level than that," Mackie said.
Officials said they considered other sites in North Dakota as well as outside the state.
The project is driven by two changes in supply and demand: cheaper natural gas and increasing regional need for nitrogen fertilizer.
Natural gas will be the feedstock for the production of the plant's products, and its abundance in North Dakota and its low price are driving this project as well as a similar project by CHS Inc. in Spiritwood, N.D., company officials said.
The other driver is the growing amount of corn and canola, in Northern Plains' expected regional market of North Dakota, South Dakota, Minnesota, Wisconsin, Nebraska, Manitoba and Saskatchewan.
"There is a need for a pile of nitrogen in North Dakota," said Northern Plains CEO Don Pottinger. "Two plants won't fill that void."
Mackie said the Grand Forks facility will be as large as any plant in the United States or Canada. The nearest producer to Grand Forks is a J.R. Simplot plant in Brandon, Manitoba.
The production of nitrogen in North Dakota should lessen regional farmers' dependence on imported products, often from South America, North Africa and the Middle East.
"In the United States, the highest priced nitrogen is right here," Pottinger said. "The reason is it's imported."
Northern Plains is at the beginning of its engineering and design process for the plant, and later will be going through environmental permitting for air and water standards.
"This will be a safe and environmentally compliant plant," said Mackie, addressing questions of safety and air quality. "The products we produce you have in your community today. They just come from somewhere else."
Asked about the potential odor of the facility, he said, "To me, it smells like money," before describing various safeguards against leaks.
Infrastructure such as new rail lines will have to be expanded as soon as construction begins, Mackie said. He expected it to draw workers from a 60- to 70-mile radius for construction, he said.
City Council President Hal Gershman said that Grand Forks, which has a shortage of housing and affordable housing in particular, will have added hundreds of more apartments as well as new single-family housing developments on the northwest side of the city by the time construction starts.
Once running, the facility will employ people with skills and training ranging from engineering, management, welding, pipefitting to information technology.
Mackie and Pottinger both have a background in nitrogen production with Simplot's Manitoba facility. The Northern Plains board of directors includes North Dakota and South Dakota farmers, executives from the fertilizer and energy industries and retired Adm. Bill Owens, a Bismarck native and former vice chairman of the Joint Chiefs of Staff. The board president is Darin Anderson, president of North Dakota Corn Growers Association.
A statement by the company said it is in a "founders round of financing" and "is in discussion with major companies to share in the ownership of the plant."
Pottinger deflected a question about potential financing and stakeholders, saying he was bound by securities and exchange regulations to not say who might buy into the venture, but said international companies are making site visits.
"If you knew what I knew, you'd be happy," he said. "They have deep pockets and they're interested in North Dakota."