BISMARCK, N.D. (AP) — A $1 million grant intended to promote the manufacture of anhydrous ammonia fertilizer was delayed while state officials sought more information about the project.
The state Industrial Commission on Monday asked the project's developer for more information about its financial assumptions and feasibility.
The money would come from a state research fund that is financed by oil and gas taxes. The proposed grant would take a sizable chunk of the $2.7 million available.
"It's a million dollars. That is real cash," Attorney General Wayne Stenehjem said.
Stenehjem, Gov. Jack Dalrymple and Agriculture Commissioner Doug Goehring make up the Industrial Commission, which oversees the disbursements of state research funds for oil and coal projects.
Neil Cohn, founder of the project's developer, N-Flex LLC, said it would test the use of a portable unit to take unprocessed natural gas and use it to make anhydrous ammonia. The unit would be located at the well site.
The technology has been in use for years, Cohn said. However, it needs field testing in North Dakota's harsh climate, and it is unusual to use unprocessed natural gas to make fertilizer, he said.
The process also would separate more valuable natural gas liquids, such as butane, from the gas itself, Cohn said.
The rapid expansion of North Dakota's oil production has caused a corresponding increase in the state's output of natural gas, which is an oil byproduct. More than a third of the state's natural gas production is burned off and wasted because pipelines to bring the fuel to market haven't been built.
The portable plants would offer a supply of fertilizer to farmers while cutting down on gas waste, Cohn said.
"It's a solution for a few different problems at once," he said.
Each portable unit would be capable of making about 1,100 tons of anhydrous ammonia each year, documents outlining the proposal say.
Spencer Wagner, a fertilizer specialist in the North Dakota Department of Agriculture, said North Dakota farmers used about 350,000 tons of anhydrous ammonia in 2011.
Wagner said 1,100 tons of the chemical would be enough to fertilize between 11,000 and 22,000 acres, depending on the type of crop.
"I could see (the project) helping to supply some areas that use a lot of anhydrous," Wagner said.