>> Eric: MINNESOTA FARMERS SPEND ABOUT A BILLION DOLLARS A YEAR FOR NITROGEN-BASED FIRST FERTILIZER.

BUT GLOBAL POLITICS AND SUPPLY CHAIN ISSUES ARE INCREASING COSTS.

SOME HOPE TO STABILIZE THE MARKET WITH FERTILIZER MADE HERE I MINNESOTA USING RENEWABLE ENERGY.

REPORTER KAOMI LEE WENT TO FIND OUT MORE ABOUT THIS INNOVATION THAT A FARMER’S COOPERATIVE IS TRYING TO GET TRYING TO GET *INTO TRYING TO GET *INTO* THE GROUND.

>> CANINE COMPANIONS WILL -- EFFICIENT, WORKING MACHINERY, AND A SUCCESSFUL CORN AND SOYBEAN PLANTING SEASON.

>> -- MYSELF I AM THE -- >> FARMERSLIKE KALIS DON'T LIKE UNPREDICTABLE COSTS.

>> FERTILIZER PRICES ARE DEFINITELY ELEVATED.

>> -- COULD COME FROM LOCAL WIND POWER.

>> WE'RE AT THE UNIVERSITY OF MINNESOTA WEST CENTRAL RESEARCH AND OUTREACH CENTER NEAR MORRIS.

>> RESEARCHERS WORKING ON NITROGEN -- FERTILIZER.

>> KIND OF AN IDEAL MODEL WHERE WE CAN -- [ NO AUDIO ] WE CAN HAVE WIND AND SOLAR -- >> TODAY FARMERS USE ANHYDROUS AMMONIA TO PROVIDE NECESSARY NUTRIENTS TO GROW CROPS LIKE CORN AND SOYBEANS.

DEVELOPED BY -- IN THE EARLY 20TH CENTURY, MICHAEL REESE SAYS IT'S ONE OF THE TOP FIVE INNOVATIONS IN THE -- >> THE PROCESS, THE RODNEY DANGERFIELD OF INNOVATION, IT DOESN'T SEEM TO GET A LOT OF RESPECT.

>> BUT IT'S TYPICALLY MADE USING -- LIKE NATURAL -- BUT MARKET OLATILITY AND SHIPPING DISRUPTIONS ARE DOUBLED OR TRIPLED PRICES.

>> >> MANY OF THE NITROGEN FERTILIZER SOURCES WE USE TODAY COMES FROM ACROSS THE WORLD INCLUDING RIGHT NOW STRAIT OF HORMUZ.

>> REESE AND HIS TEAM WANT TO DISRUPT THE MARKET WITH GREEN AMMONIA FERTILIZER.

PRODUCED FROM -- MEGAWATT WIND TURBINES CAPTURE WIND ENERGY.

THAT POWERS THEIR SYSTEM.

>> WE ELECT ROLLIZE WATER TO FORM HYDROGEN.

IN THIS CASE WE ARE BRINGING NITE REJEN I CANNOTS IN BUT IN THE PAST IN OTHER LOCATIONS YOU CAN PRODUCE NITROGEN FROM AIR, THAT'S A PRETTY WELL KNOWN PROCESS.

AND THEN WE COMBINE THE TWO TO FORM ANHYDROUS AMMONIA.

>> I'M STAPPING AT THE SITE OF THE FUTURE BLUE EARTH INDUSTRIAL PARK.

IT'S WHERE KALIS PLANS TO PRODUCE FERTILIZER RIGHT HERE IN MINNESOTA.

>> KALIS AS PARTNERED WITH A SOUTHERN MINNESOTA FARMERS COOPERATIVE AND PLAN TO BUILD A PO MILLION DOLLARS ANHYDROUS AMMONIA FERTILIZER PLANT AND STORAGE FACILITY IN BLUE EARTH, OPERATING BY 2028.

>> .

THE PRICE OF ANHYDROUS AMMONIA HAS BEEN NOTHING SHORT OF GIGANTIC, A DIFFERENCE OF UP TO 300% OME YEARS.

>> -- SAYS THE AGREEMENT LOCKS IN PRICES FOR TEN YEARS, THAT WOULD BENEFIT THE 4500 MEMBERS.

THE KALIS FAMILY, AND -- SAYS THERE ARE WAYS -- SUBS SIDRY ALREADY HAS ONE SYSTEM IN IOWA.

THE COMPANY SAYS ITS SYSTEM RELIES ON CURTAILED WIND ENERGY.

>> WE'RE KIND OF LIKE A SPONGE, WE JUST ABSORB THAT -- WHEN IT'S AVAILABLE AND -- RAMP OUR SYSTEM DOWN.

SO THAT'S HOW WE CONTROL OUR COSTS.

>> THE GROUP SAYS -- THE LEGISLATIVE SESSION THEY WEREN'T SUCCESSFUL IN THEIR REQUEST FOR $8 MILLION FOR MINNESOTA'S RENEWABLE DEVELOPMENT ACCOUNT.

BUT THEY SAY THEY WILL CONTINUE TO SEEK ASSISTANCE FROM THE STATE.

ROB DAVIS REPRESENTS A NON-PROFIT THAT TRACKS RENEWABLE ENERGY USAGE.

ALSO -- ON THE BLUE EARTH PROJECT.

>> THE RATE OF TECHNOLOGY IS SLOW.

WE DO NEED ADVANCES IN TECHNOLOGIES.

>> SOME RURAL AND FARM ADVOCACY GROUPS ARE SUPPORTIVE OF DEVELOPING THE TECHNOLOGY.

>> THERE REALLY AS YOU PROBABLY HEARD FROM OTHER FOLKS ONLY FOUR FERTILIZER COMPANIES WHO CONTROL 82%.

NITROGEN FERTILIZER MARKET IN NORTH AMERICA.

AND SO BECAUSE OF THIS CONTROL, THEY CAN BASICALLY SET THE PRICE AT WHAT THEY THINK FARMERS CAN PAY.

>> YET OTHERS QUESTION WHETHER PUBLIC DOLLARS SHOULD BE INVESTED.

A NON-PROFIT GROUP CALLED THE INSTITUTE FOR AGRICULTURE AND TRADE POLICY HAS BEEN CRITICAL OF TRUMP ADMINISTRATION POLICIES ON TARIFFS.

THE GROUP SAYS, QUOTE, GREEN FERTILIZER PROJECTS DON'T ADDRESS THE NITRATE WATER POLLUTION PROBLEMS THE STATE IS FACING, PARTICULARLY IN SOUTHEAST MINNESOTA.

MUCH OF THAT NITRATE POLLUTION IS ATTRIBUTED TO THE EXCESSIVE APPLICATION OF NITROGEN FERTILIZER TO PRODUCE CORN.

>> THERE'S ALWAYS RISK.

I DO NOT SEE AN IMMENSE AMOUNT OF DOWN SIDES JUST BECAUSE OF THE FACT THAT E'RE GOING TO GO IN, WE'RE GOING TO PERMIT THESE FACILITIES, WE HAVE A LONG HISTORY OF BEING -- TO REGULATE ANHYDROUS AMMONIA.

>> AS FOR THE U OF M'S MICHAEL REESE, HE SAYS POTENTIAL FOR DECARBONIZING AMMONIA PRODUCTION IS GREAT.

>>S IT'S A DIFFICULT BALANCE.

S IT'S ONE OF THOSE GRAND CHALLENGES.

WE HAVE TO FERTILIZE OUR CROPS TO PRODUCE