Siluria Is Looking Pretty Sharp
Mar31

Siluria Is Looking Pretty Sharp

For the first time, IHS put on a Technology Seminar as part of its World Petrochemical Conference activities last week. Don Bari and Jeff Plotkin, both formerly with Nexant, organized the gathering. At more than 100, the attendance was pretty good, especially for an inaugural event that is part of a larger conference. The first speaker was Guido Radaelli, vice president of engineering at Siluria Technologies, which is working on the oxidative coupling of methane (OCM) into ethylene. The term Holy Grail is thrown about often in the chemical industry. But it is no exaggeration for this technology. If perfected, such a technology would bestride the chemical world like a colossus. One leg would be that methane is a cheaper and more plentiful raw material than ethane. The other leg would be the considerable energy savings over ethane steam cracking because methane conversion would be exothermic. With such rewards, many have tried before and failed,notably Arco and Union Carbide, which  both had serious programs along these lines in the 80s. Things are going fairly well for Siluria. The company is partnering with Braskem to build a demonstration plant in Texas. It also unveiled an ethlylene-to-liquids technology that would convert ethylene into aromatics and transportation fuels. They’ll need some pretty cheap ethylene to make that work. Which brings us back to Siluria’s progress on OCM. Radaelli said that the company has made more headway than any company ever has in methane conversion into ethylene. The activity of the catalyst is higher, he said. The operating conditions are “many hundreds of degrees lower”. (I think this is one of the main factors that killed previous efforts.) The Siluria catalysts last years, not days, unlike previous efforts. Conversion and selectivity are thus far the same as they had been in the past. I was a little surprised to find out what actually happens in the process, as there is some ethane cracking occurring. It is powered by the heat of the conversion of methane into ethylene. I have included Siluria’s slide of the block diagram as well as one describing feedstock use. Radaelli claims economic advantages over (conventional?) steam cracking. He said that, hypothetically, if a company were to build a 1,000,000 metric ton ethylene cracker and a 1,000,00 metric ton plant using Siluria’s technology, Siluria’s technology would have been more profitable to run in each of the four years beginning in 2009. Similarly, if a company would have built a 75,000-metric-ton plant using the Siluria technology in 2014, it would have by now saved more than $100 million in ethylene purchases. (The stand alone back-integration scenario seems to be a target...

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Dow To Europe: Drop Dead!

I don’t want it to seem like I am picking on Dow this week. This was the first day of IHS’s World Petrochemical Conference in Houston. This is my 15th annual conference. So far, this conference is better than average. The place is packed with more than 1,300 people. Dow executive vice president Jim Fitterling gave an address on the beneficial economic effects of shale. We have been hearing a lot of this kind of thing in recent years. However, Fitterling went way beyond the usual touting of big numbers related to shale petrochemical investment. He said that shale will help lead to a renaissance in American manufacturing in general and is even stimulating greater R&D spending in the U.S. as manufacturers invest in technological research to support their operations. He pointed to Dow’s own planned R&D facility in Lake Jackson, Texas, near its Freeport operations, as an example. Very exciting stuff and very positive. About that headline. He also took the opportunity to complain about all the liquified natural gas export capacity being planned in the U.S. So called “unfettered” exports would drive up natural gas prices and ruin everything for everybody, companies like Dow say. “No it won’t,” oil companies usually retort. Now if you have been following this issue, you might have heard the suggestion that U.S. exports of natural gas to Europe would loosen the energy stranglehold Vladimir Putin has on Europe. “Don’t even go there,” Fitterling said. No, he didn’t say that. Actually he said this: Now we are pointing to the Ukraine and arguing that we must fast track LNG exports to help our allies in Europe. Even our own energy secretary says that’s a weak argument, especially given the long lead time and financing to build these terminals. And let’s not forget, Europe has the resources and the capability to provide for its own energy [consumption]. Just because they have rejected nuclear energy and horizontal drilling, and left themselves at the mercy of others, shouldn’t create an obligation for us to bail them out by shipping our advantage to them. If Europe really wants to be energy competitive and energy secure, it cannot walk away from nuclear and they must embrace horizontal drilling and exploration. The same policies that made America competitive are available to Europe today. The real question we should ask is a simple one: what is our foreign policy, especially when it comes to our valuable energy resources? Shouldn’t we know that with some certainty before we just launch ahead blindly? I heard at least one person attempt to start a round of applause while he was still talking....

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What Might Be Tagged At Dow’s Yardsale?

As you have may have heard, Dow Chemical plans to sell more businesses. Back in December, the company said it would get rid of its epoxy resins and chlorine-related business, which would make the bulk of $3.0 to $4.0 billion worth of divestitures. Mind you, these numbers here are a little funky. They refer to the pre-tax proceeds to Dow from transactions that aren’t necessarily even being negotiated yet. However, the company tends to get strong valuations when it sells businesses, so I would expect that the proceeds from deals would be within the range and even towards the top of it. Last week, at an investor event in Saudi Arabia, the company announced it would put an additional $1.5 to $2.0 billion in businesses up for sale. CEO Andrew N. Liveris wouldn’t say what the businesses are, but he would certainly characterize them. They would be nice businesses, likely coming out of its Performance and Functional Materials units, and perhaps reasonably profitable. But they would be more meaningful to potential buyers than they currently are to Dow. They would be, Liveris promised,  “Lots of small, little businesses that you never even track, that you never follow, and that you never even knew we had.” He was addressing analysts, thus casting a wide net. They are only acquainted with the solid form of ethylene known as polyethylene and Dow AgroSciences. The Chemical Notebook takes Liveris’ remarks as a challenge. What are the most obscure Dow businesses? Two that jumped out at me are are Dow Plastics Plastics Additives And Dow Oil & Gas. Dow put the plastics additives unit up for sale last year and then withdrew it from the market. Oil and Gas is tiny, about $270 million in annual sales. It is a market facing unit that sells chemicals for oil and gas exploration and extraction. This is a very marketable business, with companies such as Solvay and Ecolab plunging further in this area. My only reservation about Dow selling this business is that the chemistry on offer in oil and gas overlaps with other Dow businesses. Additionally, I combed through Dow’s Product Safety Assessment Finder, which by the way, is a great source of information for many chemicals. I asked question “what are the real oddball businesses?” Here are few (Don’t take this as a list of possible sales, though. Some, as you will see, are likely keepers.): Silicones and Feel Modifiers: These sound dirty. They’re not. They are used in leather finishing. They also sound like something Dow Corning would sell. With a tradename like ROSILK, I’ll guess these came from Rohm and Haas. ADSORBIA...

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The U.S. Cracker Leader Board

Back in March 2011, I jotted down on my notebook a ranking of companies most likely to build a U.S. ethylene cracker. It was to be a post for this very blog. But before I got around to posting it, Chevron Phillips announced a cracker project, stealing my thunder. I didn’t end up putting it up. And thank goodness for that. It was a pretty cruddy list. I can’t find it now, but I am pretty sure that Shintech, SABIC, and LyondellBasell were on top. None of these has formally announced a project. That said, now that we are approaching the construction phase for the projects that have been announced over the last three (three!) years, it might be worthwhile to compile a ranking of how likely it is that the projects will be built (at something resembling their appointed schedules and without major modifications). Welcome Plastics News readers! And thanks, Don, for the kind words. 1) Chevron Phillips: The company is building a cracker in Baytown, Texas, and a pair of polyethylene plants in Sweeny (Old Ocean), Texas. Probability: nearly 100%. Only meteors or aliens could stop this one. I just interviewed Ron Corn, who has been in charge of these projects for the last couple of years. The sites have been prepared. The equipment, and even the structural steel and pipe, have been ordered. The contracts and the air permits are in hand. Construction is set to begin in earnest within months. 2) Dow Chemical: The company is building a cracker in Freeport, the keystone of a program that is also seeing the company build a propane dehydrogenation plant and reopening a cracker in Louisiana. The dehydrogenation plant is already under construction. Probability: 90%. Like Chevron Phillips, it seems that equipment and contracts are in place. A draft permit from EPA came for the facility this month. That said, Dow has an unrivaled capacity to change its mind on capital expenditure decisions. (Remember the crackers in Oman, Russia, and India? The Michigan battery plant? Ethanol-based polyethylene in Brazil? The Canadian wheat straw composites plant?) However, what Dow is doing on the Gulf Coast is much less risky than any of those things. The company did originally promise a second PDH plant, which I would say is a little less probable than its other builds in the region. 3) ExxonMobil: The company is building a cracker in Baytown and polyethylene capacity in Mont Belvieu. Probability: 85% There have been challenges to the environmental permitting here. I doubt that would be enough to sideline the project.  4) Formosa Chemicals and Plastics: A medium-sized ethylene cracker and propane dehydrogenation unit...

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BASF’s Climate Change Schizophrenia
Mar10

BASF’s Climate Change Schizophrenia

Today, The Chemical Notebook features a guest post by Alex Scott, C&EN’s London-Based senior editor. Contradictory behavior relating to climate change was on show recently at BASF’s annual financial press briefing in Ludwigshafen, Germany. BASF’s Chairman Kurt Bock, an advocate of shale gas exploitation in Europe, swatted aside questions about the climate change impact of shale gas on the basis that most people in the world still get their energy predominantly from fossil fuels so it should be okay for BASF, too. And this, just minutes after holding up a car part made from BASF’s engineered plastic and exclaiming that it is lighter than the metal it was designed to replace and so would improve fuel efficiency and hence the environmental performance of vehicles. Given that there is broad scientific consensus on anthropogenic climate change, it shows how leading chemical companies such as BASF – one of the world’s most innovative companies – is potentially both part of the solution and still part of the problem. And that’s a business model set to attract greater scrutiny as scientific understanding about anthropogenic climate change sharpens. The struggle for companies like BASF remains one of doing better for people and planet while also making money for shareholders. Right now the s hareholders appear to be winning. The shift to truly sustainable technologies seemingly is too expensive or too difficult – or both. Yes new technologies are being developed, but by and large the pace of change is incremental. And being less bad for the environment doesn’t qualify as sustainable. As Bock mentioned in Ludwigshafen, truly sustainable processes such as those that consume carbon dioxide remain the “holy grail” of the chemical industry. But as Bock also noted it was too early for him to be able to provide details about BASF’s activities in this field because they haven’t been sufficiently developed. On the one hand BASF and many other chemical companies could be blamed for this state of affairs: They make a profit and only pay the current value for their raw materials, such as fossil fuels. The next generation will pick up the full (and hidden) costs, including those resulting from climate change. On the other hand, all chemical companies are working in the best way that they can within the current regulations and that means staying as profitable as they can, otherwise they might not survive at all. A potential solution for breaking this deadlock is to markedly accelerate innovation in sustainable processes by creating closer ties between academia, industry and government. Government should step up its role of funding R&D for sustainable processes, and additionally provide tax breaks...

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