Anhydrous Ammonia Supply Chain - Executive Summary Anhydrous Ammonia Cprect Use Chemical Precursor Chemical nh3 (liquified gas) Inputs to Manufacturing Process: Hydrogen Nitrogen ^ Derivative Water Treatment Chemicals: « Ammonium Hydroxide Carbon Dioxide % of Total Domestic Consumption Attributed to Water Sector: Less than 2% Understanding Chemical Supply Chains Map of Suppliers & Manufacturers Product Family: Fossil Fuels CAS No.: 7664-41-7 H Shelf Life: 24 Months — RISK OF SUPPLY DISRUPTION (Assessed in 2022) RISK RATING: Low i nu/ RISK DRIVERS Anhydrous ammonia is the princi- pal source of nitrogen in fertilizer and though it is widely manufac- tured, the majority is intended for use as fertilizer. The primary input is natural gas, which may fluctuate in availability and price. The production process is highly energy-intensive. RISK PARAMETERS Criticality: High. Essential for dis- infection and production of water treatment chemicals. Likelihood: Low. The water sector has not experienced an anhydrous ammonia supply dis- ruption between 2000 and 2022. Vulnerability: Low. Widely dis- tributed domestic manufacturing and supply. MANUFACTURING PROCESS Water Treatment Applications Hydrogen Nitrogen Anhydrous Ammonia • Disinfection • Water treatment chemical production Other Applications Input End Use • Fertilizer • Chemical production • Explosives • Pharmaceuticals DOMESTIC PRODUCTION AND CONSUMPTION, AND INTERNATIONAL TRADE Domestic Manufacturing Locations (2015): 35, distributed throughout the U.S. ® International Trade (2019) Primary Trading Partner (Imports): Trinidad & Tobago Primary Trading Partner (Exports): Chile, Mexico Domestic Consumption (2019): 15,182 M kg ¦ Domestic Production (13,500 M kg) ¦ Imports for Consumption (2,020 M kg) ¦ Export of Domestic Production (338 M kg) &EPA ------- Anhydrous Ammonia Supply Chain - Full Profile Product Description Anhydrous ammonia (NH3), an inorganic chemical and toxic gas, is widely used in conjunction with chlorine for secondary disinfection. It is the primary source of nitrogen in fertilizer, commercially produced as a byproduct of the steam methane reforming process. The majority of anhydrous ammonia manufactured in the U.S. is used in fertilizer production. Use in Water Treatment Anhydrous ammonia is directly used in conjunction with chlorine to produce chloramines for secondary disinfection (AWWA, 2015). Use as a Precursor to Other Water Treatment Chemicals Anhydrous ammonia is used to manufacture ammonium hydroxide and is an important source of carbon dioxide which is produced as a byproduct in the manufacturing process. Other Applications Anhydrous ammonia is used widely and in large quantities for fertilizer production, either applied directly below the soil surface or as part of a fertilizer formulation. It is also used in the production of chemicals such as nitric acid, household cleaners, refrigerant gas, paper and fibers, plastics, pharmaceuticals, and explosives (NCBI, 2020; USGS 2021a). Primary Industrial Consumers In 2018, approximately 88% of the anhydrous ammonia produced and imported into the U.S. was used as the primary nitrogen source for fertilizer. Production of nitric acid and polyamides such as nylon are estimated to each account for approximately 5% of domestic consumption, while the remaining 2% is used for explosives, pharmaceuticals, and various other chemical products (Boerner, 2019; NCBI, 2020; USGS 2021a). Manufacturing, Transport, & Storage Manufacturing Process Anhydrous ammonia can be produced by reacting hydrogen and nitrogen at elevated temperature and pressure in the presence of an iron catalyst (EPA, 2020; Kramer, 2004). Approximately 75-80% worldwide commercial anhydrous ammonia is produced as a by-product in the steam methane reforming process. In the Unites States, natural gas is the primary source for most commercial plants (Kramer, 2004). The first step in this process involves removal of sulfur compounds from the natural gas stream. The desulfurized gas stream is then fed into two reforming steps, where steam (water source) and air (nitrogen source) are reacted with methane (hydrogen source) in the natural gas feedstock to form hydrogen and nitrogen, and other gases. The process stream is then compressed and passed over a catalyst where nitrogen and hydrogen react to form anhydrous ammonia, as presented in Figure 1. The anhydrous ammonia is recovered as a steam, and as the gas is cooled it is stored under pressure as a liquified gas. Unreacted nitrogen and hydrogen are separated and recycled to further enhance the quality of the ammonia product prior to storage and shipping. Nitrogen + Hydrogen Catalyst Anhydrous Ammonia N2 + 3H2 -> 2NH3 Figure 1. Chemical Equation for the Reaction to Manufacture Anhydrous Ammonia EPA 817-F-22-013 | December 2022 s>EPA ------- Anhydrous Ammonia Supply Chain - Full Profile Product Transport Anhydrous ammonia is very corrosive and causes severe health effects which dictate how it can be transported. Liquified anhydrous ammonia is sold in bulk quantities and primarily delivered by pipeline or specialized railcars to suppliers who may repackage and see the product directly to consumers. Transport of anhydrous ammonia must adhere to the appropriate methods and regulations related to its status as a toxic substance, and transit routes designated for anhydrous ammonia must go through an approval process. Bulk transport by rail is very significant. There are limited number of domestic producers, and long-haul shipment of anhydrous ammonia is often accomplished via rail (Branscomb et al., 2010). Storage and Shelf Life Anhydrous ammonia can be pressurized and cooled to a liquified gas and stored in pressure vessels. Small, pressurized cylinders may be used by smaller water systems, while larger systems may require bulk deliveries. Pressurized storage vessels should be stored in a cool place away from direct sunlight. When stored properly, anhydrous ammonia can have a shelf life of 24 months, depending on purity and size of storage container (CF, 2016). Domestic Production & Consumption Domestic Production Production data was collected from the U.S. Geological Survey (USGS), while trade data was collected from the U.S. International Trade Commission (USITC) Dataweb, as shown in Table 1. Both production and trade data are specific to anhydrous ammonia. Table 1. Anhydrous Ammonia Production and Trade Data Sources Production and Trade Data Category Data Source Identifier Description Domestic Production U.S. Geological Survey CAS No.: 7664-41-7 Anhydrous Ammonia Imports and Exports U.S. International Trade Commission HS Code: 2814.10 Anhydrous Ammonia Total U.S. domestic production of anhydrous ammonia was approximately 13,500 million kilograms (M kg) in 2019 (USGS, 2021b). Domestic commercial manufacture of anhydrous ammonia takes place in 17 states throughout the country. This is largely based on proximity to large reserves of natural gas. The largest domestic producer of anhydrous ammonia by quantity is CF Industries, with 5 production facilities in Louisiana, Oklahoma, Mississippi, and Iowa (USGS 2021a). The number of domestic manufacturing locations shown in Figure 2 represents operating facilities as of 2015. Supply of NSF/ANSI Standard 60 certified anhydrous ammonia for use in drinking water treatment is distributed throughout the U.S. (NSF International, 2021). For a more current listing of manufacturing locations and supplier locations, visit the U.S. Environmental Protection Agency's (EPA's) Chemical Locator Tool (EPA. 2022a). 2 f/EPA ------- Anhydrous Ammonia Supply Chain - Full Profile i ~«gr t. O •* •- • % o O.. ^ . % * .*> fp «Lf • ¦ *0 ,iJ o - • • (• • ! • - o # O'0 • . -¦ m O o «P -- • • • ~ 'jr o BpiM-T- J \ & r, o K Domestic Supply and Manufacturing of Anhydrous Ammonia O 36 NSF/ANSI Standard 60 Certified Suppliers (NSF International, 2021) 9 35 Domestic Manufacturing Locations (EPA Chemical Data Reporting, 2016) Figure 2. Domestic Supply and Manufacturing of Anhydrous Ammonia Domestic Consumption U.S. consumption of anhydrous ammonia in 2019 is estimated at 15,182 M kg. This estimate includes production of 13,500 M kg, import of 2,020 M kg, minus export of 338 M kg (USGS, 2021b), as shown in Figure 3. Domestic Consumption (2019): 15,182 M kg (13,500 M kg) ¦ Imports for Consumption (2,020 M kg) U Export of Domestic Production (338 M kg) Figure 3. Domestic Production and Consumption of Anhydrous Ammonia in 2019 Trade & Tariffs Worldwide Trade Worldwide import and export data for anhydrous ammonia are reported through the World Bank's World Integrated Trade Solutions (WITS) software, as a category specific to anhydrous ammonia. In 2021, the U.S. 3 oEPA ------- Anhydrous Ammonia Supply Chain - Full Profile ranked first worldwide in total imports of anhydrous ammonia. In 2021, the Russian Federation ranked first worldwide in total exports while the U.S. ranked 11th (WITS, 2022), as shown in Table 2. Table 2. WITS Worldwide Export and Import of Anhydrous Ammonia in 2021 2021 Worldwide Trade Anhydrous Ammonia (HS Code 2814.10) Top 5 Worldwide Exporters Top 5 Worldwide Importers Russian Federation 4,400 M kg United States 2,500 M kg Trinidad and Tobago 3,200 M kg India 2,400 M kg Saudi Arabia 2,900 M kg Morocco 1,700 M kg Indonesia 1,800 M kg Belgium 1,000 M kg Canada 1,200 M kg Turkey 839 M kg Domestic Imports and Exports Domestic imports and export data are reported by USITC in categories specific to anhydrous ammonia. Figure 4 summarizes imports for consumption1 and domestic exports2 of anhydrous ammonia between 2015 and 2020. During this period, the overall quantity of exports remained relatively steady, and the overall quantity of imports gradually decreased, with imports for consumption exceeding domestic exports. Over this five-year period, Chile and Mexico were the primary recipient of domestic exports while Trinidad and Tobago was the primary source of imports (USITC, 2021). 6000 5000 "52 — 4000 cn c O = 3000 2000 1000 Domestic Trade of Anhydrous Ammonia HS Code 2814.10 I I I I I. E t t t t t t t E t oo oo oo oo oo oo Q.Q. Q.Q. O.Q. Q.Q. Q.Q. Q.Q. c x c x c x cx ex cx t t t t tr t o o o o o o Q. Q. CL CL CL CL E rn E £ E & t? t t t o o o o CL CL CL Q. E uj E uj o o CL Q. F x _ LU 2015 2016 2017 2018 2019 2 020 ¦ Imports from Trinidad & Tobago ¦ Exports to Chile ¦ Imports from Canada ¦ Exports to Mexico ¦ Imports from Other Countries Exports to Other Countries Figure 4. USITC Domestic Import and Export of Anhydrous Ammonia between 2015 and 2020 1 Imports for consumption are a subset of general imports, representing the total amount cleared through customs and entering consumption channels, not anticipated to be reshipped to foreign points, but may include some reexports. 2 Domestic exports are a subset of total exports, representing export of domestic merchandise which are produced or manufactured in the U.S. and commodities of foreign origin which have been changed in the U.S. 4 f/EPA ------- Anhydrous Ammonia Supply Chain - Full Profile Tariffs There is no general duty for import of anhydrous ammonia, however there is an additional 25% duty on imports from China (WITS, 2022), as summarized in Table 3. Table 3. 2022 Domestic Tariff Schedule for Anhydrous Ammonia HS Code General Duty Additional Duty - China (Section 301 Tariff List) Special Duty 2814.10 None 25% None Market History & Risk Assessment History of Shortages Anhydrous ammonia is the primary source of nitrogen in fertilizer, and use in fertilizer dominates domestic consumption. Additionally, the process to manufacture anhydrous ammonia, primarily from natural gas, is energy intensive (Boerner, 2019). Regardless of potential risks, no notable shortages of anhydrous ammonia were identified between 2000 and 2022. Risk Evaluation The complete risk evaluation methodology is described in Understanding Water Treatment Chemical Supply Chains and the Risk of Disruptions (EPA, 2022b). The risk rating is calculated as the product of the following three risk parameters: Risk = Criticality x Likelihood x Vulnerability Criticality Measure of the importance of a chemical to the water sector Likelihood Measure of the probability that the chemical will experience a supply disruption in the future, which is estimated based on past occurrence of supply disruptions Vulnerability Measure of the market dynamics that make a chemical market more or less resilient to supply disruptions The individual parameter rating is based on evaluation of one or more attributes of the chemical or its supply chain. The ratings and drivers for these three risk parameters are shown below in Table 4. 5 f/EPA ------- Anhydrous Ammonia Supply Chain - Full Profile Table 4. Supply Chain Risk Evaluation for Anhydrous Ammonia Risk Parameter Ratings and Drivers i 1 Criticality High 1 1 Likelihood Low 1 Vulnerability Low 1 Anhydrous ammonia is essential and has widespread application in drinking water treatment for secondary disinfection. The water sector has not experienced anhydrous ammonia supply chain disruptions between 2000 and 2022. Though the majority of anhydrous ammonia is intended for use in fertilizer manufacturing, strong domestic manufacturing capabilities and a distributed manufacturing base provide some resilience to supply disruptions. Risk Rating: Low ° I 1 ve-Low Modern S/> t ^ U -P 0> L O i OQ References American Waterworks Association (AWWA), 2015. B305 Anhydrous Ammonia. Denver, CO: American Water Works Association. Branscomb, L., Fagan, M., Auerswald, P.E., Ellis, R. and Barcham, R., 2010. Rail Transportation of Toxic Inhalation Flazards: Policy Responses to the Safety and Security Externality. Flarvard Kennedy School of Government, retrieved from https://www.hks.harvard.edu/sites/default/files/centers/taubman/files/Fagan UTC20 working paper 2010.pdf Boerner, L.K., 2019. Industrial ammonia production emits more C02 than any other chemical-making reaction. Chemists want to change that. Chemical & Engineering News, June 15, 2019, retrieved from https://cen.acs.org/environment/green-chemistrv/lndustrial-ammonia-production-emits-CQ2/97/i24 CF Industries (CF), 2016. Safety Data Sheet for Anhydrous Ammonia, June 10, 2016, retrieved from https://www.cfindustries.com/globalassets/cf-industries/media/documents/safetv-data- sheets/ammonia—north-america/anhvdrous ammonia sds na v3.pdf EPA, 2020. Inventory of U.S. Greenhouse Gas Emissions and Sinks, 1990-2018, retrieved from https://www.epa.gov/sites/production/files/2020-04/documents/us-ghg-inventorv-202Q-main-text.pdf EPA, 2022a. Chemical Suppliers and Manufacturers Locator Tool, retrieved from https://www.epa.gov/waterutilitvresponse/chemical-suppliers-and-manufacturers-locator-tool EPA, 2022b. Understanding Water Treatment Chemical Supply Chains and the Risk of Disruptions, retrieved from https://www.epa.gov/waterutilityresponse/risk-disruptions-supplv-water-treatment-chemicals Kramer. D.A., 2004. Mineral Commodity Profiles, Nitrogen, U.S. Department of the Interior, U.S. Geological Survey, Open File Report 2004-1290, retrieved from https://pubs.usgs.gov/of/2004/1290/20Q4- 6 f/EPA ------- Anhydrous Ammonia Supply Chain - Full Profile 1290.pdf National Center for Biotechnology Information (NCBI), 2020. PubChem Compound Summary for CID 222, Ammonia, retrieved from https://pubchem.ncbi.nlm.nih.gov/compound/ammonia NSF International, 2021. Search for NSF Certified Drinking Water Treatment Chemicals, retrieved from https://info.nsf.org/Certified/PwsChemicals/ U.S. Geological Survey (USGS), 2021a. 2018 Minerals Yearbook, retrieved from https://d9-wret.s3.us-west- 2.amazonaws.com/assets/palladium/production/s3fs-public/atoms/files/mybl-2018-nitro.pdf U.S. Geological Survey (USGS), 2021b. Mineral Commodities Summary: Nitrogen (Fixed) - Ammonia, retrieved from https://pubs.usgs.gov/periodicals/mcs2021/mcs2021-nitrogen.pdf U.S. International Trade Commission (USITC), 2021. USITC DataWeb, retrieved from https://dataweb.usitc.gov/ U.S. International Trade Commission (USITC), 2022. Harmonized Tariff Schedule (HTS) Search, retrieved from https://hts.usitc.gov/ World Integrated Trade Solutions (WITS), 2022. Trade Statistics by Product (HS 6-digit), retrieved from https://wits.worldbank.org/trade/countrv-bvhs6product.aspx?lang=en#void 7 f/EPA ------- |