UPDATED: 05/11/2016 — see Change Log
OWNER: US Nitrogen LLC (Austin Powder Company)
PROJECT: Greenfield ammonium nitrate plant
SUMMARY STATUS: Construction phase
US Nitrogen broke ground in February 2012, but the project has been fraught with problems since then. Permits have been revised and reissued repeatedly, most recently in February 2016. The start-up process finally began in May 2015, but the plant is still not running. The local community has demonstrated tremendous resistance, launching permit appeals and a slew of lawsuits, some still ongoing.
COST: $225 to $250 million but likely higher (originally $220-$240 million)
JOB CREATION: 80 permanent, 300 construction — see Job Openings [LINK]
START-UP DATE: 2016
LIKELIHOOD: Likely — see Methodology
|66,224 mtpy GROSS|
|Nitric Acid||600 stpd||198,637 mtpy GROSS
59,578 mtpy NET
|420 stpd||840 stpd
|72,000 stpy||65,317 mtpy|
|Units: stpd, stpy, mtpd, mtpy = short/metric tons per day/year.
 United States Geological Survey (USGS) Mineral Yearbook, Nitrogen gives capacity in metric tons per year, calculated as “engineering design capacity adjusted for 340 days per year of effective production capability,” rounded to three significant digits. Source: most recent year, Table 4: Domestic Producers of Ammonia, http://minerals.usgs.gov/minerals/pubs/commodity/nitrogen/.
 Company does not publish capacity data; ANSOL capacity from news reports.
 TDEC, Division of Air Pollution Control, permit documents. Sources: linked below.
 Adjusted Capacity is in metric tons per year assuming operations for 365 days per year; based on permit data except ANSOL end product capacity, based on press reports; net NA capacity based on permit capacity less feedstock for CAN and ANSOL. Note: full capacity output of NA, CAN, and ANSOL is infeasible given ammonia capacity, and output will be constrained (see maths below). See Methodology.
FEEDSTOCK: Natural gas
END PRODUCTS: Ammonium Nitrate solution, Nitric Acid (US Nitrogen), Calcium Ammonium Nitrate (Yara), and Carbon Dioxide (Praxair)
US Nitrogen broke ground in February 2012, at which time it expected to start production in March 2014. Since then, the project has become mired in snafus, creating serious delays and a cascade of regulatory and legal disputes.
Start-up has been pushed back repeatedly. In late 2015, the plant was expected to be operational in the first or second quarter of 2016. News reports from December 2015 described the plant as having been “in the midst of a phased startup for months.”
But, by late April 2016, more than four years after the start of construction, the plant is still in start-up mode and has yet to begin operations. This has not been a smooth vertical integration for parent company, Austin Powder.
Many of the project’s issues were related to permit approvals and the local community’s (continuing) resistance to the project; the majority of these are now resolved. However, the project also experienced serious issues with its engineering design and construction.
In February 2016, US Nitrogen filed a lawsuit against one of its construction partners, in which it detailed some of the technical problems that have plagued the project. US Nitrogen’s complaint, accessible via the US Court PACER system, alleges “breach of contract, breach of warranty, and professional negligence,” but only provides a one-sided story because the defendant has yet to answer the complaint. Without naming here the parties involved, US Nitrogen’s allegations include:
• … Design failed to include adequate drainage plans for this type of greenfield project. This initial design failure has resulted in continued construction and design modifications to the project that continue to this day. Developing adequate drainage in the midst of principal construction has resulted in substantial costs and delays to the project.
• … it was critical that construction should begin on the foundations for the two Worthington BDC compressors prior to other construction activities. These compressors … required customized foundations that both ensured adequate support for their tremendous weight as well as the dynamic forces created by the reciprocating pistons in the compressors. These devices are arguably the most integral part of the process for making ammonium nitrate and represent the most complex pieces of machinery in the facility.
• In the fall of 2013, the compressor foundations were complete … Prior to January 4, 2014, the main bodies of the two compressors had been placed on the foundations. On January 4, 2014 there were identical failures to both concrete foundations. These failures rendered the foundations unsafe and unusable.
• … The design defects concerned the use of outdated methodology, a significant lack of rebar support in the base and the piers of the foundation, quality control issues that should have been identified through inspection … problems with spacing and edge distances in places where the design would have permitted placement in more secure locations, inadequate rebar around the anchor bolts, and a failure to use design practices that would ensure an anticipated service life commensurate with new construction.
• Design defects included but were not limited to: a. pipes which did not meet; b. pipe hangers attached incorrectly or designed without an anchor point; c. pipe fittings or pipes that terminated in concrete; d. steel beams that did not meet or provide proper support; e. missing or insufficient concrete joints; and f. improper soil testing and compaction.
• Suspending construction … was not a feasible option for US Nitrogen. At significant expense, and causing a significant delay of at least five months, US Nitrogen removed the defective work, re-designed the compressor foundations, and replaced the compressor foundations …
• US Nitrogen has incurred in excess of Thirty Million Dollars ($30,000,000.00) in additional expenses as a direct result of repairing problems and correcting unsuitable designs …
The other issues surrounding US Nitrogen are, frankly, too many to enumerate, but they include:
- Water supply plans:
could triggertriggered a lawsuit from the local water utility in August 2014, apparently settled in September 2015.
- Air permit: appealed (no link available), July 2014.
- Water permits: NPDES permit appealed and ARAP appealed twice, July 2014.
- Right of way permit for water pipeline: denied by TDOT, June 2014, before being approved, August 2014.
- TDEC’s Water Quality Criteria: challenged by environmental groups through the EPA, June 2014 (potentially rendering all US Nitrogen’s water permits void).
- Site zoning: challenged in a lawsuit heard in October 2014, and resolved in March 2015.
- Land purchase: potential for litigation amid various ongoing accusations of fraud, bribery, perjury, corruption, and general abuse of office in September 2013 (apparently arising when the chairman, now retired, of the local utility district was supposed to be negotiating a price for the sale of public water, but instead negotiated the sale of personal land on the banks of the Nolichucky River). This one is still live: there have been grand jury hearings, and a corporate denial in November 2015.
And finally:in July 2014, local officials of the Greene County Industrial Development Board sparked international outrage by arresting an individual at an open meeting who dared to ask them to speak up. The Tennessee Open Records Counsel was flooded with public complaints, which were passed on to the county attorney. This incident also sparked a lawsuit in July 2015. And finally:in September 2014, the Save the Nolichucky organization filed suit against US Nitrogen and the Industrial Development Board of Greeneville and Greene County (IDB), in an attempt to stop construction on the controversial water pipelines. And finally: in September 2014, another new lawsuit was filed, this time against TDOT, alleging that it was against state law to grant right of way for any entity other than a public utility. And finally: in October 2014, a number of residents secured a restraining order to stop US Nitrogen from trespassing – although US Nitrogen claims it hadn’t and didn’t need to enter their properties to build the pipeline.
- And finally: in October 2014, these claims of trespass were augmented after the death of a walking horse, which, naturally, led to another lawsuit, still pending as far as I’m aware.
A large number of the problems facing US Nitrogen involved its plans to build a 12-mile dual pipeline, at a cost of “approximately $130,000 per mile.” The pipeline would take water from and discharge effluent into the Nolichucky River, crossing 20 streams on its way. This replaced the original plan, which would have involved paying to upgrade the local utility’s infrastructure as well as paying for water supply. It seems that US Nitrogen solved this issue by developing a “split flow” plan for the plant’s water requirements, combining both the original plan to use the Town of Mosheim’s Lick Creek wastewater treatment plant as well as the double-pipeline, for which it received the final permits from the Tennessee Valley Authority and U.S. Army Corps of Engineers in September 2014.
US Nitrogen’s “state-of-the-art, environmentally friendly” plant sits on 50 acres, within a 450-acre tract, near Midway, in rural Greene County, Tennessee.
The greenfield project consists of two ammonia plants each with a capacity of 100 short tons per day (stpd), a Weatherly nitric acid (NA) plant with capacity 600 stpd, and an ammonium nitrate solution (ANSOL) plant with capacity 840 stpd. Actual production of ANSOL will, however, be constrained by the amount of ammonia the plant can produce (200 stpd of ammonia is not enough to make 840 stpd of ANSOL on a continuous basis; the company’s publicized ANSOL production rate of 420 stpd is more realistic).
The ammonia plants are not new builds, but old units that US Nitrogen has refurbished.
US Nitrogen altered and expanded its plans a number of times, adding to the complexity of the issues facing the project. The most significant additions to the site were a calcium ammonium nitrate (CAN) plant, to be owned and operated by Yara, and a 90,000 stpy carbon dioxide (CO2) liquefaction plant, whose owner and operator had not been decided when the permits were issued.
In April 2016, Praxair announced “a long-term agreement to purchase by-product carbon dioxide from US Nitrogen,” and plans to “build, own and operate a carbon dioxide purification and liquefaction facility … [to] produce beverage-quality liquid carbon dioxide,” for start-up in late 2017.
Yara’s 72,000 stpy CAN plant will purchase its nitric acid feedstock from US Nitrogen and limestone “from nearby quarries,” the latter delivered by “a maximum of three trucks per day.” CAN solution, the finished product, will be shipped out by a maximum of “10 tankers per day.” The plant’s continuous process will consume up to 2.8 short tons (5,600 pounds) of milled limestone and 3.5 short tons (7,006 pounds) of nitric acid every hour.
US Nitrogen’s air permits reflect the project’s torturous planning process: the initial air permit application was submitted in June 2011, revised in August 2011, approved in January 2012, extended in May 2013, extended again in December 2013, revised in June 2014, and revised again in July 2015. The air permit caps emissions at 215,044 stpy of greenhouse gases (CO2e) and 95.26 stpy of nitrogen oxides (NOx).
US Nitrogen’s permits incorporate the Yara and CO2 plants because “from a regulatory standpoint, they are likely considered a single ‘stationary source.'” The addition of the Yara plant increased site-wide emissions somewhat but the CO2 plant causes “a reduction of approximately 80%” of the (previously approved) CO2 emissions from the ammonia plant. Ammonia and VOC emission increased, compared to the previous permit, “due to increased use of natural gas plus … new information from the catalyst manufacturer and the design engineer.” US Nitrogen gave no reason why these fundamental design details were changed so far into the construction phase, nor any indication that they won’t request still more changes in due course.
Regarding possible future modifications of the permits, the shortfall between permitted ammonia capacity and permitted ANSOL capacity is noteworthy. The site can not produce enough ammonia to run both the CAN plant and the ANSOL plant at full, permitted capacity, so it would not surprise me if another air permit modification was coming around the corner: a ~75% expansion of the ammonia lines, to roughly 127,000 stpy, would do the trick (see the math below).
US Nitrogen’s end product, ANSOL, a concentrated solution of ammonium nitrate in water, will be shipped to Austin Powder’s “manufacturing sites in Ohio and elsewhere,” where it will be used to manufacture blasting agents for the industrial explosives market. ANSOL is stored and shipped in “specially designed trucks” as a hot liquid. Depending on the strength of the solution, “hot” means a temperature of (for example) more than 225°F or 135 to 140°C. The company estimates that “30-40 truckloads per day will leave the plant.”
MATH: US Nitrogen’s ammonia (NH3) feedstock consumption
One ton ANSOL requires 0.80 tons NA and 0.22 tons NH3.
One ton NA requires 0.29 tons NH3.
ANSOL production: 260,000 stpy
NA required for ANSOL (x0.80) = 208,000 stpy
… and NH3 required for NA (x0.29) = 60,320 stpy
NH3 required for ANSOL (x0.22 ) = 57,200 stpy
… so total NH3 required for ANSOL = 117,520 stpy (60,320 + 57,200)
CAN production: 72,000 stpy
NA input rate given as 7,006 pounds per hour = 30,686 stpy
… and NH3 required for NA (x0.29) = 8,899 stpy
Total site NH3 requirement (US Nitrogen + Yara) = 126,419 stpy (117,520 + 8,899)
Permitted site NH3 capacity = 73,000 stpy
A ~75% expansion of the ammonia lines would therefore be required for all on-site plants to operate at permitted capacity. However, even this might underestimate the installed ANSOL capacity, as the 840 short tons per day capacity plant is permitted for 260,000 short tons per year. Operating for 365 days per year, an 840 stpd plant would produce 306,600 stpy, a ~20% expansion above the currently permitted ANSOL capacity and a ~100% expansion above the currently permitted ammonia capacity.
View larger map with all ammonia plants.
ADDRESS: 471 Pottertown Road, Midway, TN 37809, United States