The U.S. could soon be home to a lot more ammonia factories -- not a comforting thought after a deadly explosion at an ammonia fertilizer plant in Texas on Wednesday evening. You can blame the fracking boom.
Ammonia is used to produce fertilizer, industrial explosives (like those used in mining), plastics, and other products. It's becoming cheaper to produce in the U.S. because one of its main feedstocks is natural gas, and natural gas, in case you haven't heard, is being fracked here at a breakneck pace and sold for bargain-basement prices.
Australian company Incitec Pivot this week announced [PDF] that it will be building a hulking new $850 million ammonia facility in Waggaman, La., just outside New Orleans. Construction could begin within six weeks, with the plant expected to come online in 2016. The announcement is being characterized by Australia’s media as a blow for the manufacturing sector Down Under, but Incitec Pivot can't resist the siren song of cheap American natural gas.