NextEra fertilizer plant to move forward; second plant withdraws from loan

by Jeff Beach, North Dakota Monitor
March 4, 2024

This story has been corrected to say that Prairie Horizon still intends to move forward with development of a fertilizer project near Dickinson.  

The NextEra hydrogen-based fertilizer production plant will move forward in Stutsman County, getting the full benefit of a $125 million state forgivable loan after a second fertilizer project decided not to accept its share of the loan. 

The North Dakota Industrial Commission in January approved a $50 million loan for NextEra Energy Resources Development for a plant near Spiritwood, east of Jamestown in Stutsman County, and $75 million to Prairie Horizon Energy for a plant near Dickinson. 

Industrial Commission OKs splitting fertilizer loan fund

Prairie Horizon, a partnership of Marathon Petroleum and TC Energy, has declined its share of the loan, meaning the full $125 million forgivable loan will go to NextEra, the Clean Sustainable Energy Authority, a division of the Industrial Commission, announced Monday.  

“The decision on this loan does not affect our current plans which includes continued development of the Prairie Horizon project,” the company said in an email.

Florida-based NextEra has built multiple wind energy projects in North Dakota and will use wind energy for its fertilizer production plant, making it a zero-carbon producer of fertilizer. The plant is projected as a $1.3 billion project. 

“Providing a secure and in-state supply of nitrogen fertilizer would create cost and supply stability in North Dakota, inviting further fertilizer production investment in the state with potentially billions of dollars of total investment in the sector,” NextEra said in its loan application with the state. “This would position North Dakota as not just a national leader in clean energy agriculture, but a global leader.”

Additional fertilizer production has become a priority in North Dakota, which largely imports chemical fertilizers from other countries to boost yields for corn, wheat and other crops. 

Global conflicts have made for volatile fertilizer prices in recent years, making it difficult for farmers to plan. 

NextEra’s application says it plans to begin construction in 2025, finish construction in 2028 and be operational in 2028 or 2029. The project needs to be operational before the loan will be forgiven.

“NextEra is one of the few companies in the industry that has the flexibility to initially fund the development and construction of a project of this size using our balance sheet and do not need to rely on third-party financing,” the company’s application said. 

The company says it would generate hundreds of jobs as the project develops in multiple phases.  

The project would start with ammonia with plans to expand to other nitrogen-based fertilizers, including urea.

The fertilizer loan was authorized by House Bill 1546 during the November 2023 special session. The bill required the production of hydrogen “by the electrolysis of water” in producing fertilizer.

Scores are in on 2 fertilizer plant proposals competing for $125 million

The Clean Sustainable Energy Authority had two independent reviewers score the projects as part of the application process. 

Those scores were ranked into categories of “good,” “fair” and “questionable.”  Both the reviews for the NextEra plant fell into the “questionable” category. One review of Prairie Horizon was high enough to be rated “good,” the other “questionable.”

Members of the authority also gave the Prairie Horizon plant a higher score and recommended the greater share of the funding to Prairie Horizon.  

The Industrial Commission concurred with that recommendation in a Jan. 24 meeting. The companies then had 30 days to accept the funding through the Bank of North Dakota or forfeit its share to the other project. 

Prairie Horizon, in a letter to the Bank of North Dakota and the Industrial Commission said “it is unable to commit to the technology requirements” of the loan and said it would like to see future incentive programs be “technology agnostic.” 

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