Agrium seeking DEC permit to discharge from Nikiski plant

Editor’s note: This story has been changed to include further information from Agrium’s Government Affairs Manager Adam Diamond.

The Alberta-based fertilizer producer Agrium has applied for an Alaska Department of Environmental Conservation permit for waste discharge from its Kenai Nitrogen Operations facility in Nikiski, a plant that closed in 2007 due to a dwindling local supply of the natural gas it uses as raw material.

According to a draft information sheet, the permit would be necessary for the plant to reopen. The fact sheet considers a scenario in which the plant reopens in 2018. Agrium’s draft permit is being held for a 10-day DEC review period, after which it will be subject to a 30-day public comment period before the permit can be granted or denied.

Agrium’s Manager of Government Affairs, Adam Diamond, said the permit application is advance contingency planning rather than a committed preparation to resume operations.

“The restart has not been firmly decided,” Diamond said. “These permit applications take a long time to process. … We’re planning for if there’s a decision to restart.”

Diamond wrote in an email that the decision to restart the plant “will depend on several components including the availability and cost of a long-term gas supply, the costs associated with re-starting the facility and commodity prices and outlook for fertilizer moving forward.” The permit is needed for maintainence at the plant, Diamond wrote, but was also designed to include the restart possibility. 

“A (pollutant discharge elimination system) permit is required to maintain the current maintenance operations at the Kenai Nitrogen Plant; however, a potential opportunity to restart production was incorporated into the proposed permit at Agrium’s request,” Diamond wrote. “Without a renewal of the permit, plant re-start or continuing maintenance activities would not be possible. In other words, the issuance of this permit does not ensure the plant will be re-started; however, failure to obtain the permit would effectively prevent future operation of this facility.”

If granted, the permit will be good for five years. It would allow operation of one of the plant’s two ammonia fertilizer production lines and one of its two urea production lines. According to the draft information sheet, these two lines would employ 140 people. If enough natural gas is available, the other two production lines could be restarted later, employing 240 people total and doubling production.

The permit would establish limits for the Agrium Plant’s discharge into Cook Inlet, allowing an average daily discharge of 870,000 gallons. Chemicals DEC would monitor under the permit include ammonia, nitrogen, oil and grease, arsenic, copper, zinc, manganese, nickel, hydrocarbons and residual chlorine, which is used as an equipment disinfectant. Water temperature and pH will be monitored as well.

Since the closure, Agrium has previously been granted other permits required to operate the Nikiski plant. DEC granted the company an air-quality permit in January 2015 and a permit for runoff pollution in August 2015.

While operating, Agrium’s Nikiski plant produced up to 5 percent of the Kenai Peninsula Borough’s property tax revenue and some of the peninsula’s highest paying jobs, with an average annual salary of about $80,000, according to previous Clarion reporting.

The plant, Alaska’s only nitrogen products facility, was the subject of a recent state tax credit for nitrogen and urea producers. Introduced by Rep. Mike Chenault (R-Nikiski), the bill was signed into law by Gov. Bill Walker Sept. 12. The credit will go into effect July 2017 and expire in Jan. 1, 2027.

In previous Clarion interviews, Diamond has said Agrium’s decision of whether or not to restart the Nikiski plant will be weighed against other investments available to the multinational company.

Agrium presently operates seven nitrogen products plants around the world. On Sept. 12, Agrium announced a $26 billion merger with another Canadian agriculture products giant, Sasketchewan-based Potash Corporation. According to a Bloomberg Business magazine article, the combined company would control more than 30 percent of nitrogen and phosphate production in North America.

 

Reach Ben Boettger at ben.boettger@peninsulaclarion.com.

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