Fertilizer plant could locate near Spiritwood, legislators say

May 31—JAMESTOWN — A fertilizer plant could be built in the Spiritwood area after the North Dakota Legislature approved a $125 million loan earmarked for the project if it is constructed in the state, according to local state legislators.

Sen. Terry Wanzek, R-Jamestown, and Rep. Mike Brandenburg, R-Edgeley, both said NextEra Energy Resources is interested in building a fertilizer plant in the Spiritwood area.

"That is the ideal location," Wanzek said. "They are looking at other locations. They want to be in this area."

Wanzek said NextEra is in the process of negotiating for land to build the fertilizer plant and construct wind towers.

"I know they've already been talking to landowners and securing the option to build wind towers and then they are going to put that tower on the grid and it's going to be equal to the amount of power that they will need to run the fertilizer plant," he said. "They are going to put it on the grid and then they are working with the local companies in securing their power."

Brandenburg said NextEra is looking at 400 megawatts of usage on the grid.

"You probably heard some discussion in the last year or two about the hydrogen hub in the Midwest," he said. "This is the hydrogen hub."

Brandenburg said the estimated cost is $3 billion to $3.5 billion to build the fertilizer plant and install wind towers. He said the project would take at least three years to build.

"The fertilizer part of it is somewhere between $1 billion and $1.5 billion and then see there's wind towers tied to it too but you take your power off the grid," he said. "Wind towers don't feed the fertilizer plant ... ."

He said NextEra is looking to use electrolysis to make anhydrous ammonia and using carbon dioxide emissions from Spiritwood Station, Dakota Spirit ethanol plant and Green Bison Soy Processing to make urea fertilizer.

"Then they tie in with water with the Red River Water Supply which is just to the north," he said.

The fertilizer plant won't be located in the Spiritwood Energy Park Association's industrial park because it won't fit in there, said Connie Ova, special projects manager for the Jamestown/Stutsman Development Corp. She said the JSDC will definitely help any company that wants to locate in Stutsman County with its incentives package.

In an emailed statement to The Jamestown Sun, NextEra Energy Resources said it applauds North Dakota for taking an important first step to encourage a new fertilizer production investment in the state and enabling competitive electric fertilizer production in the Upper Midwest. The company said the Upper Midwest is a region that currently lacks fertilizer production capacity to serve local markets.

"The company is currently in the preliminary stages of evaluating this opportunity with the core goal of providing a secure in-state supply of nitrogen fertilizer that would allow for cost and supply stability," NextEra Energy Resources said.

Wanzek said the state of North Dakota wanted to show support to any company that wants to build a fertilizer plant in the state.

"In this case, we really don't have to do anything to help them with planning, developing and building," he said. "Once they've got it built and once it's producing fertilizer, then the state would step in and help. The way we are doing that is, we're going to give them a loan for $125 million and the loan can be forgiven only based on the contingency that they build a plant."

Senate Bill 2015 says the Clean Sustainable Energy Authority shall develop a fertilizer development incentive program, including guidelines to provide loan forgiveness. The bill says funding for the fertilizer development incentive program is limited to $125 million.

To be eligible for the fertilizer development incentive program, the fertilizer production facility must be located within the state, the owner of the facility must be from the U.S. or Canada, the owner must borrow money under a program administered by the Bank of North Dakota, and the facility must use hydrogen produced by the electrolysis of water.

"Upon completion of the construction of the fertilizer production facility, the authority shall forgive the loan and shall use fertilizer development incentive funding to repay any outstanding amount borrowed, as certified by the Bank," the bill says. "The authority shall request an appropriation from the strategic investment and improvements fund or other funding sources to provide fertilizer development incentive funding to repay any outstanding amount borrowed."

Brandenburg said the loan is not money upfront for a company to build the fertilizer plant.

"It's money after it's built," he said. "The commitment is ... you build the project and go spend $3 billion in the state, this loan will become available."

Wanzek said the state imports a lot of fertilizer and North Dakota farmers pay some of the higher prices for the product.

"As far as supplies go, sometimes I've seen it with our own farm and when it's busy then it's hard to get supply," he said. "This should provide more stability and accessibility and supplies and maybe hopefully and maybe it's not going to be the absolute cheapest fertilizer, but it's going to provide some stability in the market too."

Brandenburg said 25% of the fertilizer imported into the state is from Russia and it should be produced in North Dakota.

"I'm just getting ... tired of fueling the Russian war machine, so they can fight, take on Ukraine and do all of the destruction that they are doing," he said. "We don't need to buy our fertilizer from Russia."

A few years ago, Wanzek, who also farms, said the cost of urea fertilizer was around $300 per ton. In 2022, the price was around $1,200 per ton.

"It's a matter of hundreds of thousands of dollars or more (for farmers)," he said.