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Published July 29, 2013, 11:07 AM

Fertilizer industry grows

Despite safety concerns, the US fertilizer industry is growing, with plants for new plants taking shape.

By: David Mercer and Ramit Plushnick-Masti, Associated Press

TUSCOLA, Ill. — In years past, Brian Moody’s efforts to bring economic development to his small Illinois town focused on modest projects: merging an old hardware store whose owner was retiring with another shop to preserve 30 jobs or pointing artists to a vacant downtown building.

Now he has a bigger prospect. Cronus Chemicals wants to build a $1.2 billion plant on a nearby cornfield that would manufacture nitrogen-based fertilizer, a staple of the corn and soybean farms that fill the landscape around Tuscola, a community of 4,500 people about 160 miles south of Chicago.

Similar projects are being proposed across the nation, driven by booming demand for corn and newly abundant supplies of natural gas, a major component in fertilizer production. The plants promise thousands of jobs during construction and hundreds of full-time spots once they’re up and running. And most of them would go in small, rural towns where economic development isn’t easy.

“It’s equally time-consuming and frustrating,” Moody says, explaining that such promising job-creating opportunities are rare.

The wave of potential expansion comes with concerns. An explosion at a Texas fertilizer plant in April killed 15 people in the community of West, highlighting the dangers of such facilities and how loosely they’re regulated.

But in communities such as Tuscola, local officials say they’re prepared to handle those risks. A large chemical plant already stands near the proposed fertilizer site.

“The fact is that whether these plants are going to be here or not, we have three major railroads that go right through the middle of this community,” says Steve Ettinger, chief of the Tuscola Fire Department. “Those railroads, on a daily basis, move all kinds of threats.”

Back to the US

Experts say conditions are ripe to bring fertilizer production back to the United States after an exodus to the Caribbean and elsewhere a decade or more ago, when high domestic natural gas prices drove many manufactures away.

Since then, new methods of finding natural gas — hydraulic fracturing, which uses high-pressure water and chemicals to break dense layers of rock, and horizontal drilling — have set off energy booms in parts of Pennsylvania, Texas and other states.

“It shouldn’t be a surprise that there are a lot of people investing in the fertilizer business right now,” says Pat Westhoff, an agricultural economist at the University of Missouri-Columbia.

Like Tuscola, most of the sites being considered are already home to other chemical facilities, which were drawn by the same rail lines and other industrial infrastructure that are attractive to the fertilizer industry.

But growth, as Moody says, doesn’t come easily to small towns. So they compete.

Cronus has also found a site in Mitchell County, Iowa, and is seeking incentives from each state as it weighs options. In Illinois, lawmakers passed legislation that includes tax breaks for the newly formed company.

“People should learn from the incident at West,” says Daniel Horowitz, managing director of the Chemical Safety Board, a federal agency investigating the Texas explosion. He thinks rules need to be reviewed to prevent accidents.

Anhydrous ammonia is ubiquitous in farm country. It is flammable or explosive only in extreme circumstances, but an accidental leak could release a toxic chemical cloud that can drift for miles.

“You don’t want to breathe it. It’ll burn your lungs,” Hettinger says.

Government oversight of such chemicals varies greatly from state to state.

In Illinois, the roughly 800 anhydrous storage sites are inspected annually. The six largest have few, if any, problems, says Jerry Kirbach of the state Agriculture Department’s Bureau of Agricultural Products Inspection.

California requires plants be inspected once every three years.

But in many states, including Texas, fertilizer plants are considered small polluters, and cash-strapped state environmental agencies conduct inspections only when a complaint is lodged.