By Dan Gunderson
The oil and gas boom in North Dakota might mean lower operating costs for farmers across the Midwest.
The North Dakota Corn Growers announced Thursday the organization will build a $1.5 billion dollar plant to turn natural gas into nitrogen fertilizer.
It’s the second big fertilizer plant plan unveiled in North Dakota in recent months.
Minnesota-based Cenex-Harvest States, announced last fall it would build a $1 billion dollar fertilizer plant in North Dakota to take advantage of natural gas supplies.
U.S. nitrogen production took a dive in the 1990s when natural gas prices spiked. Natural gas is the primary cost for producing nitrogen. The Fertilizer Institute, a voice for the industry, said prior to the late 1990s U.S companies produced 87 percent of nitrogen fertilizer needed by American farmers.
After natural gas prices skyrocketed, fertilizer production plummeted to the point where the trade group estimates 50 percent of nitrogen fertilizer used by American farmers was imported from countries such as China and Saudi Arabia.
Fertilizer production is increasing across the country. It will take a couple of years for most of the proposed plants to get up and running. But some analysts believe the increase in domestic production will stabilize fertilizer costs for farmers.
One challenge in North Dakota will be building a pipeline network to capture the natural gas and bring it to the new fertilizer plants. An estimated 30 percent of natural gas produced in North Dakota is now burned as it comes out of the ground because there’s no way to capture and transport the gas.
Several pipeline projects are currently under construction or in the planning stages.