Reenergizing The Backbone of The Chemical Industry: A TechnoEconomic Analysis of Basic Petrochemical

1

Competition between bio-based, coal and
gas-based production of olefins

WUN lecture series Green Chemistry Videoseminar,
29 June 2006 Tao Ren, Martin Patel Utrecht
University, Department of Science, Technology and
Society (STS) / Copernicus Institute, Utrecht,
Netherlands Tel. [phone] (Ren), 31 30
253-7634 (Patel) t.ren_at_chem.uu.nl,
m.patel_at_chem.uu.nl
2
Content

• Introduction
• Energy Analysis
• Economic Analysis
• Scenarios
• Conclusion (for more details see the slides
  posted on the WUN website)

3
Background

• Crude oil and petroleum gas-based olefin
  production (most important ethylene and
  propylene) via steam cracking is the backbone of
  the chemical industry
• The most energy consuming production route in the
  entire chemical industry
• Over 40 years old
• 3 EJ (1018) fuels burned
• 200 million tons CO2 emitted
• 10 billion (109) dollars of process energy costs
  paid (2004 figures)

4

Alternatives to oil and petroleum gas-based routes

• Biomass-based routes via bio-ethanol,
  bio-methanol and bio-naphtha
• Coal and methane-based routes via C1 chemistry
  mainly via naphtha and methanol

5
Conventional and Alternative Routes(based on
oil, gas, coal and biomass-derived naphtha)
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Conventional and Alternative Routes(based on
gas, coal and biomass-derived methanol)
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Energy Analysis
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Are Innovative Routes More Energy Efficient (fuel
use)? Absolutely Not!
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Why such differences among coal and biomass-based
routes?

• Electricity cogeneration (and to a less extent,
  tail gas recycling)!
• So, how was energy loss allocated?

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Energy Allocation (How to Allocate The Total
Energy Loss)

• Economic way (in error bars)
• Since the prices of electricity and chemicals in
  /GJ are the same (10-20/GJ), why not see them
  as chemical-equivalent?
• Convert electricity Ee into the mass of
  chemical-equivalent Ee/LHVchemicals Me
• Add the mass weight of chemicals and Me together
  to get the total mass of chemical-equivalent
• Allocate the total energy loss to the total mass
  of chemical-equivalent as energy use for
  producing chemicals

• Conventional way
• Assuming electricity (Ee) is produced in a
  self-standing natural gas-fired power plant and
  needs Ee/55 Eprimary
• Subtract Eprimary and energy content of chemicals
  from the total energy input and the rest is
  allocated to the mass weight of chemicals as
  energy use for producing chemicals

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CO2 Emissions? Mixed!
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Negative CO2 emissions?

• Gasification of biomass can be combined with
  electricity generation. If done so, then fossil
  energy use and CO2 emissions for electricity
  generation is avoided.

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Economic Analysis
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Are Innovative Routes Cheaper? Hmm
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Costs of oil, gas, coal, biomass, electricity can
change simultaneously. Too many breakeven
points...

• So, which one is the REAL winner?

16
Monte-Carlo-Like Analysis (to see the
distribution of production costs)

• Feasibility bench marking against market prices
  (below 500/t, 500-600/t, 600-700/t, etc.
  900-1,000/t and finally above 1000/t high value
  chemicals)

• Competitiveness bench marking against each other
  (the lowest cost, the 2nd lowest cost, the 3rd
  lowest cost, etc. finally 24th lowest cost)

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Defining Correlations of Energy Costs(randomly
5,000 times 2 standard error of mean)
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Competitiveness
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So, some of the coal and bio-based routes look
good, but why such differences among them?

• Again, electricity sales! To a smaller extent,
  CO2 costs (or credit sales).

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Those that have low energy costs (coal/biomass)
and generate huge amount of electricity (and CO2
credits) are winners!

• Lignocellulose-ethanol-dehydration (22 GJe/t
  HVCs)
• Lignocellulose--FT naphtha-steam cracking (50
  GJe/t HVCs)
• Coal-FT naphtha-steam cracking (48 GJe/t HVCs)
• Sugar cane-ethanol-dehydration (16 GJe/t HVCs)

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Scenario Analysis
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Does the cost advantage mean coal and biomass
will replace oil and gas as primary energy
sources in our futures olefin production?
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History told us that potential low production
cost alone (e.g. The Middle East) is no guarantee
for market domination.

• Meeting the market demand in 2004 requires enough
  feedstock supply to produce 350 million tons of
  basic petrochemicals!

24
Maximum Share of Coal and Bio-based Routes in
2025-2050 (Market Growth 3, Peak Oil in 2025,
Rest-land or Abandoned Land)
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So, can coal or biomass replace oil and gas for
olefin production?

• It depends on
• Peak oil/gas, primary energy costs and
  electricity prices (which depends on)
• Feedstock supply (which depends on electricity,
  transportation fuel and steel sectors)
• Climate change policies (CO2 costs via CCS or
  emissions trading) and land use (for biomass!)
• Market demand for chemicals (which depends on
  global economy)

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Conclusions Re-energizing the Backbone of the
Chemical industry

• Techno-Economic analysis
• Compared with energy use in improved oil-based
  conventional routes, gas-based routes use twice
  as much energy while coal and biomass-based
  routes use six times as much energy
• Coal and biomass-based are both feasible and
  competitive in comparison with oil and gas-based
  routes, but their realistic market potential will
  be limited with 30 in 2025-2050

• Recommendations
• CO2 cost is no magic bullet it does not help
  biomass-based routes or punish oil/gas-based
  routes as much as it punishes coal-based routes
• Promoting Clean Use of Fossil Energy Resources
  (e.g. CCS?)
• Encouraging Supply of Biomass-based Feedstock
  (i.e. land use issues)

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Thank you for your attention!
One of the founders of FT synthesis F. Fischer
in 1918