The devastating explosion at a fertilizer-blending facility in West, Texas, on April 17 called attention to the risks of ammonia-based fertilizer production and storage. Between 1984 and 2006, the U.S. Occupational Safety and Health Administration reported 224 accidents, resulting in 50 fatalities, at ammonia plants around the U.S., and ammonia-based fertilizers and explosives were involved in a variety of intentional attacks, including the 1995 Oklahoma City bombing. Now, a different kind of boom in the fertilizer business—no explosives required—could also spell trouble.
No ammonia plants—which produce 90 percent of the fertilizer used worldwide—have broken ground in the U.S. in more than 20 years. But in the next three to five years, that’s changing. Today there are as many as 14 ammonia plants proposed in the U.S., with nearly 12 million tons of new capacity and $10 billion of expected investment. Several older plants are also being recommissioned and upgraded. Louisiana, Iowa, North Dakota, Texas and Indiana are among the proposed sites. This boom, driven by low prices for natural gas—the main ingredient in ammonia production—will drive a corresponding surge in the industry’s already substantial carbon footprint.
Hot market, hot climate?
Demand for fertilizer is escalating worldwide. China, India and developing nations around the world are stepping up their agricultural output of both grains and livestock, and commodity crop prices are at record highs, encouraging farmers to fertilize heavily in search of higher yields. As fertilizer demand grows, supply is ramping up to meet it, and the U.S. is poised to capture most of that growth—in no small part because of rapid expansion of the nation’s natural gas sector over the past four years.
But unlike many of the industries capitalizing on the low price of natural gas, ammonia producers don’t use it primarily as a fuel source. They use it as an ingredient—a source of abundant, accessible hydrogen.
Ammonia production is, relatively speaking, fairly simple. The inputs are nitrogen, hydrogen and energy used to stimulate a reaction understood by all chemistry students:
N2 + 3H2 => 2NH3
The nitrogen used in the process is taken from the air, but hydrogen sources vary depending on when and where ammonia production is happening. When ammonia plants first came online in the 1940s, most used water as their source of hydrogen; energy-intensive electrolysis decoupled the hydrogen and oxygen. Add a catalyst, a little pressure, a blast of air, then cool it down, and you’ve got ammonia, with a little extra oxygen. But electrolysis is an expensive proposition, and ammonia plants today have a far cheaper source of hydrogen: hydrocarbons.
In China most ammonia is made from gasified coal, but elsewhere in the world that mostly means natural gas. Lots of it: ammonia plants consume about 1 percent of global energy. Most of that, however, is used as feed, not fuel.
Process technology has improved steadily in the past 60 years, and since the 1970s, when most existing facilities were built, the amount of energy used per ton of ammonia (as both feed and fuel) has decreased about 30 percent. Most U.S. plants have kept up with technology, upgrading and retrofitting as more efficient technologies have become available, but the improvements are diminishing; the International Fertilizer Industry Association reports that new designs are reaching the theoretical minimum for energy consumption. The problem isn’t energy efficiency; it’s feedstock.