$2 billion in construction: Projects at Spiritwood
By Keith Norman
“CHS has moved out of the energy park,” she said. “The good news is they are still in Stutsman County.”
The Spiritwood Energy Park Association is a planned industrial park with a rail loop. It is a joint project of Great River Energy and the JSDC.
“There was not enough room in the energy park for two heavy rail users,” Ova said. “It would have restricted growth for themselves (CHS) and everyone else in the park.”
The new location is about a mile east of the SEPA location and adjacent to the rail line. CHS, if it proceeds with its plans, will construct its own rail loop at the new location.
The CHS nitrogen fertilizer project is the largest of five known projects at various levels of planning or construction in Spiritwood Township. It is also the largest private construction project ever planned in North Dakota.
In total, the five projects have a price tag of more than $2 billion and hold the potential for about 400 new primary sector jobs. The projects are CHS nitrogen, GRE Spiritwood Station, Spiritwood Energy Park Association, E-Nugget and Dakota Spirit AgEnergy.
Ova described the jobs as manufacturing jobs that could be held by the primary earner in a family.
“Those types of jobs would definitely be a draw,” she said. “The companies don’t seem to be worried about attracting people for the jobs they will have available.”
Nancy Hodur, research assistant professor at the Department of Agribusiness and Applied Economics at North Dakota State University, said good jobs attract workers.
“Take a look at what happened in western North Dakota,” she said. “Where there are good jobs people came.”
Hodur said there is no magical formula to determine the impact of 400 new jobs on the area population.
“If you assume 400 jobs attract 400 new people with a typical household size of 2.5 people that is another 1,000 people,” she said. “But additional people making purchases creates additional jobs in retail and service sectors.”
Some of the people holding these new jobs may commute from Valley City or other area communities.
In other situations, a current resident may become employed in one of the new jobs, Hodur said. If a new resident doesn’t move to the community to fill his or her old job there is no net change in population.
“There is no ‘back of the envelope’ way to calculate the change in population that can result from a given number of new jobs,” she said. “But there is a lot of stuff going on. There will be all sorts of ripple effects going through Jamestown.”
Ova expects those ripple effects to gain momentum after any announcement from CHS concerning construction of the nitrogen plant.
“It will be a chain reaction,” she said. “Once one shovel goes in the ground, other projects will fall in line.”
In addition to the five known primary projects, two secondary businesses dealing in construction materials have announced plans to locate in the food park adjacent to Cavendish Farms.
Koste Materials purchased land for a concrete ready mix plant and Ambassador Steel has announced plans to purchase land for a business selling rebar and other building materials.
“That has filled the food park,” Ova said. “There is no room now for the slaughter plant that has been a rumor for years.”
Ova said each of the other projects has its own schedule and timeline.
Great River Energy
GRE completed construction on the 99-megawatt coal-fired electric generating plant in August 2011. The $350 million plant has been idle since due to a lack of demand for electricity in Minnesota.
Ova said GRE now plans to bring the plant online in November 2014. The plant will produce electricity for the regional power grid and steam that will be used at the planned Dakota Spirit AgEnergy ethanol plant and at the existing Cargill Malt plant.
“The employees are now doing work on getting the plant ready to be up and running,” said Lyndon Anderson, spokesperson for GRE. “We’re looking forward to getting it up and generating electricity.”
Bringing GRE Spiritwood Station online is estimated to add between 20 and 30 new jobs.
Dakota Spirit AgEnergy
Dakota Spirit AgEnergy is a planned 65-million-gallon per-year ethanol plant. Groundbreaking ceremonies were held on Aug. 9 although construction has not started.
“They are currently raising EB-5 funds in China,” Ova said. “All financing has been committed. The EB-5 funds are raised after the other funding. It’s there, they are just putting it all together.”
EB-5 investors are foreign nationals who acquire visas to enter the U.S. as part of their investment.
Anderson said the EB-5 funding should be complete this fall with construction starting in the fall or winter. The plant still expects to begin operations in the first quarter of 2015 utilizing the 2014 corn crop.
When complete, the $155 million Dakota Spirit AgEnergy plant will employ between 35 and 50 people and be located at the Spiritwood Energy Park.
SEPA is a joint venture between GRE and the JSDC. The project includes the construction of an industrial park and rail loop.
“Construction doesn’t start until the Dakota Spirit AgEnergy plant starts construction,” Ova said.
Total cost of the project is about $7.5 million with half coming from the JSDC.
This was the original planned location of the CHS nitrogen fertilizer plant. With CHS moving its planned plant a mile to the east, the JSDC is currently soliciting other projects for the park.
“Ideally we are hoping to see a heavy steam user and a light rail user come along,” Ova said.
CHS nitrogen plant
The CHS nitrogen plant is the biggest of the Spiritwood projects at an estimated $1.5 billion.
“They are currently doing their FEED study,” Ova said. “We look for an announcement early next year. It is still a possibility it could move. We hope they don’t and we are trying to make things as doable as possible.”
The feed study, or front end engineering and design study, determines if the raw materials for the plant are available and estimates cost of construction and production. A pre-feed study was underway in September 2012 when CHS announced the intent to build the plant.
CHS is currently in negotiations with Spiritwood Township regarding the cost of the building permit for the plant. The township’s current fee structure would result in a $1 million building permit fee.
The CHS nitrogen plant would use natural gas captured at the wellheads of western North Dakota to produce nitrogen fertilizers used in farm production. The plant, if constructed, would employ between 150 and 200 people.
E-Nugget’s business plan utilizes empty coal cars traveling from Minnesota to the coal fields of western North Dakota, Montana and Wyoming to haul iron ore to Spiritwood where it would be smelted into iron pellets or nuggets.
The plant is a project of Carbontec Energy Corp. of Bismarck and will be located at SEPA. Carbontec hopes to break ground in early 2014. Phase one operations would process about 100,000 metric tons of iron each year. One year after the start of operations, Carbontec intends to expand the operation to about 300,000 metric tons.
The plant will use sugar beet residue and hardwood chips rather than coal as a reductant making the plant more environmentally friendly, according to Ova.
Phase one construction costs are estimated at about $60 million, and it would employ about 40 people. Planned expansions could boost the total workforce of the plant to about 75.
Ova said rumors of truck stops, motels and apartment buildings may be confirmed after some of the planned projects make announcements.
At this time no other businesses have formally committed to plans to build or expand in Jamestown.
Sun reporter Keith Norman can be reached at 701-952-8452 or by email at firstname.lastname@example.org