Wabash Valley Resources lands $1.6B federal loan commitment for ammonia fertilizer plant
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The U.S. Department of Energy has announced a conditional commitment to provide a loan guarantee of up to nearly $1.6 billion to Wabash Valley Resources LLC to support its anhydrous ammonia fertilizer operation in West Terre Haute.
The funding will be part of a $2.4 billion total investment to retrofit a former Duke Energy plant in the Vigo County town to produce the fertilizer, a project that will also include a carbon sequestration component.
The DOE said Monday that the project has the potential to be the world’s first carbon-negative ammonia production facility.
Wabash Valley Resources Chief Operating Officer Dan Williams told Inside INdiana Business that bringing production to Indiana brings a number of benefits.
“The majority of ammonia that’s actually consumed in the state of Indiana is produced either in the Gulf Coast or internationally and imported into this country,” Williams said. “The cost of logistics for all this…increases the eventual retail price for this anhydrous ammonia in this region.”
Williams noted that in 2022, the cost of anhydrous ammonia skyrocketed after the war in Ukraine began. He said having more domestic production will mean that the U.S. will not be at the “whim of international politics.”
“Not only are we bringing in a cost advantage ammonia, a lower carbon ammonia, we’re also going to be stabilizing the supply chain and providing a little bit more of a more robustness to it in terms of pricing points and guarantee of supply,” he said. “Really, it’s just a good thing for this region.”
When the project is complete in by the end of 2027, the company expects to produce about 500,000 metric tons of anhydrous ammonia fertilizer each year, supporting farmers in the Eastern Corn Belt, which covers most of central Indiana and western Ohio, and part of southern Michigan.
“Creating a large new source of anhydrous ammonia in Indiana would be of enormous benefit to Hoosier farmers. And, manufacturing fertilizer with a low carbon rating is even more powerful,” Don Villwock, former president of Indiana Farm Bureau and a farmer in Edwardsport, Indiana, said in a news release.
Our partners at the IBJ previously reported that the retrofitted facility is expected to provide 135 permanent jobs with an average annual compensation of around $129,000 when completed. That’s in addition to about 500 construction jobs.
“Wabash Valley Resources would be the first domestic producer located in the Corn Belt to produce low-carbon ammonia for local farmers and co-ops in the region,” the DOE said in the release. “This low-carbon ammonia would be cost-competitive compared to existing ammonia imports, helping to drive down costs for local businesses and consumers. In addition to its environmental benefits, the facility would also support hundreds of high-quality union jobs in West Terre Haute.”
The DOE said the conditional commitment indicates an intent to finance the project, and both the DOE and Wabash Valley Resources must satisfy certain technical, legal, environmental, and financial conditions before the loan guarantee is issued.
Williams said the company hopes to close on the loan and begin work on the project within the next six months.
In January, the U.S. Environmental Protection Agency issued two permits to begin construction on two wells in Vermillion and Vigo counties that will be used for the underground storage of carbon dioxide.
The DOE said while the production of ammonia-based fertilizer is crucial to the country’s agricultural system, it is also a significant contributor to climate change, accounting for 1% to 2% of all CO2 emissions.
The company expects about 1.67 million metric tons of CO2 could be injected into the wells each year over a 12-year period.
Greg Zoeller, vice president of external affairs for Wabash Valley Resources and former Indiana attorney general, told IIB the carbon sequestration portion of the project was critical to landing the DOE commitment.
“They’re looking to have these projects show that there’s a way forward in creating manufacturing for ammonia and all the other highly carbon-intense processes. But they’re also worried about, how do we maintain a local supply that isn’t subject to the [international] whims?” he said. “The focus on global environmental issues, this carbon sequestration is the answer to that issue for the foreseeable future when it comes to maintaining our energy supply and our manufacturing as well as agriculture.”
In July, Wabash Valley Resources has signed an agreement with Houston-based energy technology company Baker Hughes to provide support for the carbon sequestration efforts.
The conditional commitment is being offered through the DOE’s Energy Infrastructure Reinvestment program, which was established through the Inflation Reduction Act.