Idaho fertilizer plant back on track

Published online: Jan 02, 2014
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AMERICAN FALLS, Idaho-For nearly eight years, a company backing a large nitrogen fertilizer plant has quietly maintained an option to buy about 490 acres of local farm land.

Stymied by an economic downturn, permits lapsed and the project made little progress-until recently.

About 30 orange stakes are dispersed throughout Jim Tiede's potato fields, marking where the company drilled core samples for predevelopment testing following this fall's harvest.

Once financing is secured, plant construction will require an investment of more than $1 billion and 1,500-2,000 workers. The facility is scheduled to be operational by 2017-producing ammonia from natural gas to make both liquid and solid nitrogen fertilizer. It would be the country's westernmost nitrogen fertilizer plant, employing 150 full-time employees.

"I think a domestic supply of nitrogen is important," said Tiede, who intends to buy more land if the project comes to fruition. "The U.S. imports a lot of fertilizer now."

University of Idaho Extension economist Paul Patterson believes once built the plant will put "downward pressure on nitrogen prices and therefore be a benefit to producers." Domestic natural gas prices have plummeted thanks to new extraction methods, but Patterson emphasized new natural gas exporting facilities are planned and prices won't always be this low.

Houston, Texas-based Magnolia Nitrogren Idaho-or Magnida-has applied for a new air-quality permit. Dan Pitman, with the Idaho Department of Environmental, hopes to have a draft permit available for public comment within 60 days.

Magnida is again seeking a Power County special-use building permit. The company intends to reopen a community office and recently sent an informational letter to Power County residents. A public meeting is scheduled about the project for 5 p.m. Jan. 22 in the American Falls District Library.

It obtained industrial water rights from the defunct FMC plant near Pocatello. Magnida, formerly Southeast Idaho Energy, originally intended to build a power plant that would burn coal converted into a gas form. It later tweaked its plans to make fertilizer from coal gas and eventually settled on natural gas as their feed stock when prices dropped a few years ago.

Power County officials are considering an urban renewal district to help the plant.

Kristen Jensen, executive director for the Great Rift Business Development Organization, said the plant would add $400 million in valuation to the tax base, shifting Power County's tax burden from one of Idaho's highest to among the lowest.

"They look promising," Jensen said.

Magnida's new project manager, Ric Sorbo, said equity, which amounts to hundreds of millions of dollars, is already in hand, and they'll seek 60-70 percent more funding through debt financing in 2014.

"Right now, everything is moving ahead as well as we would like," Sorbo said.

Until June of 2013, Sorbo worked for SNC Lavalin, a Canadian company embroiled in a bribery scandal.

"I joined SNC Lavalin in June of 2012. All of the so-called scandals, ethics issues, etc., predated me at SNC Lavalin," Sorbo said. "I left SNC Lavalin not because of the issues the company is going through. I left to pursue a better opportunity, which is this one."