Contingency

6 Months Ended

Jun. 30, 2011

Contingency

Contingency

11. Contingency

        In August 2007, a request for information was received from the U.S. Environmental Protection Agency (EPA) pursuant to Section 114 of the Clean Air Act with respect to CF Industries' (formerly Terra's) nitric acid plant at Port Neal, Iowa. Subsequently, a proposal was made to the EPA to resolve a number of potential Clean Air Act violations associated with prior modifications at nine of the nitric acid plants, including our Verdigris facility. After negotiations with the EPA, an agreement was reached in the form of a consent decree to resolve the matter. The consent decree which became effective on June 6, 2011 requires compliance with significantly lower nitrogen oxide emission standards. Compliance with these emission limits will require new or upgraded selective catalytic reduction systems and continuous emission monitors at our facility which have an estimated capital cost of approximately $6.0 million.