In 2012, when US Nitrogen broke ground on its new plant in Tennessee, the resurgence of the North American nitrogen industry was just beginning. Ammonia sold at high prices but, thanks to the shale gas revolution, the natural gas feedstock was cheap. As a result, profit margins were high and forecasts were rosy.
Now, it's different. Ammonia and its derivatives don't command high prices, which makes it a poor time to begin operating an expensive new plant - but those same low prices might make this a good time to begin construction.
Recent news regarding both completed and future projects illustrate the sometimes painful relationship between product pricing in a cyclical industry and the timing of investment decisions.
Five years after breaking ground, and almost three years behind schedule, US Nitrogen's ammonium nitrate plant in Tennessee has finally reached "full production capacity."
This project has been so fraught with problems - permitting, compliance, engineering design, construction, community acceptance, health and safety - that it wasn't always obvious whether the plant would ever be fully operational. Even now, a raft of legal challenges remain unresolved.
The grand SNAFU named US Nitrogen appears to have come to a temporary pause.
Despite starting up all the units over the last few months - nitric acid, ammonium nitrate, ammonia - the regulatory teams at state and federal levels overseeing US Nitrogen now appear to have come in and closed the site down, until they can enforce environmental and safety standards.
US Nitrogen hasn't publicly announced that its new ANSOL plant is operational, yet, but it has advised regulators that the plants have started up. Its reps are telling the local press that it will be operational by "the end of summer."
In the meantime, the team is rectifying a newly-identified spate of permit violations and deficiencies - which is a little awkward, because regulators are presently considering its permit renewals, which met with great resistance from the local community during the public comment period.
Austin Powder's new $225+ million ammonium nitrate plant was supposed to begin operations in March 2014. Now, more than two years late, the US Nitrogen plant at Greeneville, TN, is still in start-up mode.
Yes, there has been a lot of local opposition. Yes, permit revisions and all the appeals have slowed progress. But there were also technical, engineering causes for the ongoing delays.
US Nitrogen has just made some of these problems public.
SUMMARY STATUS: Operational
US Nitrogen broke ground in February 2012, when it expected its new plant to start up in March 2014, but the project was fraught with problems. Permits were revised and reissued repeatedly, and the site had major issues with compliance, which appear to continue even today. Construction and design issues led to major delays and lawsuits. The start-up process eventually began in May 2015 but the ammonia plant didn't start up until June 2016. Within a couple months, the site was temporarily shut down under federal and state investigation of permit compliance; more emission mishaps occurred in April 2017. The company announced that the plant was fully operational in January 2017 but, since then, it's not clear whether plant has been producing much product.