North American fertilizer production projects totaling $22 billion may be at risk of delay amid increased scrutiny from regulators and communities after last week's explosion at a Texas plant killed 14 people.
CF Industries Holdings Inc., the largest U.S. maker of nitrogen fertilizer, and competitors including Agrium Inc., Mosaic Co. and Koch Industries Inc. are planning more than a dozen new plants.
Among the planned projects is CF's proposed $1.7 billion expansion of its Port Neal plant 8 miles south of Sioux City, Iowa. An explosion of ammonium nitrate at the same Missouri River location in 1994, when it was under different ownership, killed four workers and injured 18.
"You wonder if there is going to be some kind of move against ammonium nitrate," Mark Gulley, a New York-based analyst at BGC Financial, said by phone, referring to the form of nitrogen fertilizer that appears to have been involved in the Texas blast. "There could be some pushback."
The explosion in Texas two weeks ago occurred after a fire at a fertilizer plant owned by closely held Adair Grain Inc. The facility held 270 tons of ammonium nitrate as of Dec. 31, according to state records.
The highly explosive chemical was responsible for some of the most deadly industrial accidents and terrorist attacks. Timothy McVeigh used it in 1995 to destroy Oklahoma City's Alfred P. Murrah Federal Building and kill 168 people. The Irish Republican Army used it to attack London's Canary Wharf in 1996.
State and federal investigators are trying to find the cause of the West, Texas, blast, whose victims include 10 firefighters and emergency medical personnel.
The disaster may lead to more attention being paid to ammonia production and storage safety procedures, said P.J. Juvekar, an analyst at Citigroup Inc. in New York.
