On a recent trip through North Dakota in early Dec 2024, as we switched between Winnipeg and the rural radio stations, we started to hear news about two interesting projects. Both projects that were raised are significant and will shape that region’s economic future while contributing to the region’s efforts in mitigating Climate Change.
Green Ammonia
The first project was a nitrogen production project for North Dakota. In this case, the State offered a cash incentive of $125 million to the successful bidder (or bidders) to devise a plan to produce green ammonia. “Green,” in this case, refers to a process that does not release carbon dioxide or other gases, such as nitrous oxide, into the atmosphere.
While climate change discussions and plans have many inflections, the State of North Dakota has accurately focused its response and plans on input materials. Controlling greenhouse gases becomes very challenging when the farmer is already rolling across the field and has made his/her plans for the day. The best point of control is to manage the input materials and technologies where they are already aggregated, such as at the manufacturing site.
The radio news and later scanning of the web showed that two projects were in contention for this state award. Both projects seemed to take a different approach in “getting to green!” The State did specify that to receive the cash award, the ammonia producers had to use electrolysis. This effectively forces new wind and solar energy generation. However, both projects had their views on how to achieve this.
Next Era
The NextEra proposal will use renewable energy from (new!) windmills to support the electrolysis stage, which will create hydrogen. Atmospheric nitrogen will then be introduced in a follow-on process to create the final product—ammonia.
Prairie Horizon
The Prairie Horizon proponent would use a mix of solar and grid energy for their electrolysis component. As this proponent takes energy off the grid, some of this energy has a carbon cost – because North Dakota uses natural gas and coal to a considerable extent to generate its electricity.
Following the electrolysis stage, the ammonia generation stage follows. Due to the energy mix, this project is considered more of a “blue” ammonia project. To mitigate the carbon cost of this carbon-derived electricity, they propose to partner with another group that is setting up a CO2 pipeline to collect those gases from as many as 57 ethanol plants throughout five Northern and Midwest states. This pipeline will ultimately terminate at an underground storage site in North Dakota. In effect, Prairie Horizon would now participate in a Carbon Capture and Sequestration project (CCS), thereby mitigating the balance of carbon emissions from the grid-sourced electricity. This is essentially their squaring the circle and going from having a “blue” ammonia project to a “green” one.
Context for both projects
Both projects are significant in economic scale and range in estimates from $1.3 to $2.2 billion. The State incentive, in comparison, is about 10% of the project. One can foresee that the economic recovery of the State investment will be back to their treasury by the end of the estimated 3-year construction period. The general scale of such a plant can be seen in Figure 3.
Figure 3: A US-based Ammonia Plant
This is an example of an ammonia plant. The Donaldsonville Complex’s Ammonia 6 plant is the largest ammonia plant in the world and came online in 2016.
The call for US-based ammonia production is based on broad economic opportunity, supply management challenges, and the achievement of meaningful gains in greenhouse gas mitigation. For comparison purposes, the USA produces only 10% of the world’s ammonia (1), while China produces 70%. On the other hand, the USA produces about 9% of its electricity from coal (2), while China generates over 50% of its energy from coal (3). In the scheme of things, one relatively small project will not move the needle on greenhouse gas emissions, but the continuation of a sequence of moves will impact and cause others to participate.
Sustainable Aviation Fuel (SAF)
As our trip continued, an SAF project in Minnesota came to light.
Sustainable Aviation Fuel is essential to the future of the aerospace industry, as it offers the opportunity to continue to build that industry with relatively few changes required in their entire regime – which one would have to agree is indeed very complex. The key difference here is that SAF fuel generally no longer comes from the petroleum industry but rather from the biomass industry. SAF fuel offers the opportunity to achieve Net-Zero carbon emissions by 2050. And all this would be accomplished in a world with ever-increasing demand for air travel!
Figure 4: MSP Airport
In this second case of new, interesting and green projects, it was learned that Moorhead had recently been selected as the site for a significant Sustainable Aviation Fuel (SAF) project.
The capital investment required for this project is in the order of $5 billion for a facility that would be scaled to produce some 193 million gallons of AV gas annually. This amount of fuel would represent nearly half of the fuel currently used at the MSP (Minneapolis-Paul) International Airport (see Figure 4).
A coalition called the Minnesota SAF Hub is leading this project. Bank of America, Delta Air Lines, Ecolab, and Xcel Energy are project anchors. Other leading organizations, such as the State of Minnesota, the Metropolitan Airports Commission (i.e., MSP Airport), the University of Minnesota, and many others, also participate.
Figure 5 shows a brief overview of SAF Production for this project.
However, SAF comes with a high price—sometimes two to eight times the cost of conventional aviation fuel. The proponents are keenly aware of this fact and have created this consortium, which will support and purchase SAF while staying abreast of project developments, economics, and related public policy. As a first example, Delta has committed to purchasing SAF from some nearby sources commencing in 2026.
The consortium has set an initial milestone of delivering 100 million gallons of sustainable aviation fuel to MSP International Airport by 2030, which will increment further over time. As a reference point, Delta uses 250 million gallons annually, while the aviation industry uses 30 billion gallons.
While there are many drivers for this project, one is the recent federal government’s renewable energy legislation—dubbed the Inflation Reduction Act—which provided tax credits for SAF production and other renewable energy subsidies. At the State level, the Minnesota Legislature in 2024 approved two tax credits for sustainable aviation fuel to make the state more competitive in this nascent industry.
This investment will create 650 jobs and have an economic impact of some $50 billion across the state, including modest increases in on-farm income.
Figure 6: Farm Biomass being collected
The proposed SAF manufacturing process uses cellulosic biomass in the form of lower-value agricultural by-products such as corn stover (see Figures 5 and 6) and timber waste as its carbon feedstock. It also incorporates various forms of clean hydrogen feedstock to produce near-zero carbon fuel. In these cases, hydrogen (produced at the earlier electrolysis stage!) is used to “crack” cellulosic materials and convert them from long-chain molecules to shorter/smaller ones, consistent with AV Gas specifications.
The plant operator will be DG Fuels, and they expect to commence SAF production in 2030.
Concluding Remarks
This trip provided a new perspective on how our American neighbours approach Climate Change challenges. They are forming business consortiums, making significant investments in conjunction with their legislatures, and risking substantial capital.
Indeed, becoming aware of these two projects was a pleasant surprise. It shows how important it is to look periodically across that (metaphoric) white picket fence that separates the USA from Canada and see how the other side is acting on important issues that affect us all.
- https://www.statista.com/statistics/1065865/ammonia-production-capacity-globally/
- https://www.eia.gov/energyexplained/us-energy-facts/
- https://www.statista.com/statistics/302233/china-power-generation-by-source/