Turning Point for Chemicals from Coal

An article in the Oil & Gas Journal reported that Nexant officials had concluded that recent increases in oil and gas prices have pushed the chemical industry to a "strategic turning point" for the use of coal to produce chemicals. Nexant stated that four factors were causing this turning point:

• Unprecedented increases in global crude oil prices
• Explosive increases in natural gas prices in North America and Western Europe
• Unprecedented energy demand growth in developing economies, particularly in Asia and for liquid transportation fuels
• Advances in coal utilization processes, such as gasification, and related environmental technologies

In a new study, Nexant analyzed the technologies and economics of using coal to produce major petrochemicals via gasification and other known processes.

"Cost-related issues are a major consideration affecting the growth and success of coal-based chemicals, as costs are intertwined with the competitiveness of coal-based processes compared to mature, conventional process routes and feedstocks," company officials said. "Though proven cost-competitiveness will be a critical hurdle for coal, several other issues must also be considered." These include:

• Continued improvements in gasification and auxiliary system technologies related to environmental concerns.
• Competition from alternate low-cost feedstocks and processes such as remote or stranded gas from the Middle East, Eastern Europe, and Africa.
• Forecasted shortfalls for conventional feedstocks and key chemical products and intermediates in China, potentially offset by China's large coal reserves, coupled with the success and growth of chemicals produced from acetylene.
• Global crude reserves may be entering a diminishing phase, and consuming nations worry about increasing reliance on oil and gas from unstable sources.

"The growth in coal-based production of chemicals will ultimately be dependent on cost competitiveness, both for gasification-based production and for chemicals produced from acetylene, as in the case of the growing vinyl chloride production in China," it said. "The relatively high cost of ethylene from methanol produced from coal cannot compete with ethylene produced from conventional cracker processes in the US."

However, the Nexant report supports the economic competitiveness of a wide range of materials produced from coal, including methanol, ammonia and fertilizers, polyolefins, acetyls, and formaldehyde (all from coal-synthesis gas via gasification), and vinyl acetate and acrylic acid (via the coal-acetylene route).

"Ultimately, it is expected that coal-based chemical production can leverage its advantages into a promising future that successfully addresses environmental issues and encourages energy and feedstock diversity," Nexant said.

This is but another indication that the growing shortage of oil (as indicated by the high price of oil) is causing a wide range of consequences.  It is well that the capacity to produce chemicals from sources other than coal be developed before the shortage becomes critical and far ranging effects in the industries that use these chemicals becomes an even greater problem.  The price of chemicals will rise accordingly and therefore the cost of materials made from these chemicals will increase.  Does anyone doubt that we are near the end of low price oil?  That does not mean that we are running out of all oil, only that we are running out of what is sometimes referred to as "conventional" low cost oil.  We have vast reserves of oil that have hardly been tapped, but it will be very expensive to recover and perhaps at the expense of environmental damage that many are not willing to permit. All the more reason to expedite the production of energy from renewables and to move towards plug-ins and all electric cars.

Nexant sees turning point" for chemicals from coal, Oil & Gas Journal, January 26, 2006

Technorati tags: coal, chemicals, energy, technology

Comments

[Nguyen]

Much of the higher prices in oil currently are due to speculation. Political instability in the middle east. In addition, growing demand in India and China. Investors in gasification projects understand this, and are waiting to see how things settle.

One large recession will dampen demand considerably worldwide, and the overthrow of the mullahs in Iran would settle 90% of the political instability in the Persian Gulf region for at least the next few years. Oil could drop by 60-70%. Investors know these things and take them into account.

[odograph]

What goes around comes around. If I recall correctly, the field of organic chemistry got kicked into high gear by european (German?) breakthroughs in coal-based chemicals and dyes.

[Castor Oil]

While coal-based oil and chemicals could help in the short and medium run (perhaps next 50-100 years), long term, I'd reckon that only bio-based, non-renewable sources of feedstock would be sustainable for both fuels as well as chemicals

Vic, Castor Oil Online

[parin gala]

Hii there,
can anyone help with learning about the prices of coal chemicals - mainly coal tar pitch. i would like to track them on a regular basis. is there any website or a publication from where i can source the info?
Kindly help me..
Regards,
parin.

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