AMERICAN FALLS, Idaho — ConAgra Foods has rescinded its appeal of a clean air permit approved for a proposed Power County nitrogen fertilizer plant, removing a major barrier for the project.
However, the estimated cost of building the facility has inflated from $2.1 billion to about $3 billion, due largely to a rise in U.S. construction costs fueled by strengthening demand, said Ric Sorbo, project manager with Texas-based Magnida.
Magnida had hoped to close on all of the necessary financing for the project by the end of 2014. Sorbo remains optimistic that Magnida will still reach financial close by the end of the first quarter of 2015 and break ground next summer.
ConAgra’s American Falls potato processing plant manager raised concerns during a public meeting last summer about the proximity of the proposed fertilizer plant to his company’s facility. Specifically, he mentioned groundwater issues, emergency preparedness and odors. ConAgra protested the Idaho Department of Environmental Quality’s approval of Magnida’s clean air permit last May, which threatened to delay the company’s timeline, Sorbo said.
“We’ve had conversations with ConAgra starting in late May to see if we could not resolve this without going through the litigation process,” Sorbo said. “We’ve learned an awful lot about them and their operation, and they’ve learned an awful lot about us and our operation, and we’ve come to the conclusion that we can be good neighbors with each other.”
Sorbo said the major issue addressed by the agreement between the company’s pertained to ConAgra’s concerns regarding how the Magnida plant would affect a limited groundwater supply in the area.
“Both parties wanted to make sure we both would have the water needed to have. It was a supply issue, not a quality issue,” Sorbo said, adding the agreement would address ConAgra’s concerns, should they arise.
Sorbo said other concerns were resolved simply through better communication. Both parties agreed to keep details of the agreement confidential.
In a press release, ConAgra President Greg Schlafer thanked Idaho Gov. Butch Otter for becoming personally involved in the matter and helping the companies work out some of the “difficult details” toward finding common ground.
“Our agreement fully addresses each of our prior concerns related to employee safety, emergency preparedness and air emissions,” Schlafer said in the press release. “With the agreement now in place, we’re confident both facilities can safely and successfully coexist as major employers and contributors to the American Falls community.”
Sorbo said Magnida is reviewing its engineering and construction bids.
The plant would use natural gas as a feedstock and produce more than a million combined tons per year of ammonia, urea, UAN and diesel exhaust fluid. It would employ about 175 workers — in addition to the 1,500-2,000 construction workers who would be needed to build the facility — and could be operational by 2017.