SPECIAL SECTION: ENERGY

NATURAL GAS

Chemical Synthesis
John Marano
JM Energy Consulting
James J. Spivey
Louisiana State Univ.
Bryan Morreale
National Energy Technology
Laboratory

Plentiful, low-cost natural gas will invigorate the

chemicals industry over the next decade, as producers
look to increase the role of natural gas as a feedstock
in established processes, as well as develop new
processes to convert methane into chemicals
currently derived from petroleum.

he abundance of domestic, low-cost natural gas has

reinvigorated the U.S. chemicals industry, which uses
natural gas as both a feedstock and a fuel for manufacturing commodity chemicals. The chemicals industry has
expressed renewed interest in expanding the use of natural
gas as a feedstock for the production of other chemical intermediates, as it may provide more stable process economics
than current petroleum-based feedstocks (1). In addition, the
development of alternative pathways for the conversion of
the methane in natural gas to traditional petrochemicals may
be of strategic importance in a future where greenhouse gas
emissions from the combustion of petroleum products are
curtailed, while the demand for a wide range of hydrocarbonbased products continues to grow.
This article discusses natural gas utilization within
the context of current practice in the chemicals industry,
as well as potential opportunities to expand the use of
methane to produce a wider range of petrochemicals in the
future. The article discusses the range of feedstocks that
are used to produce valuable petrochemicals (Figure 1),
including those derived from petroleum as well as natural
gas. It highlights the opportunities provided by a plentiful
and inexpensive supply of natural gas and challenges that
must be overcome to realize these opportunities.

Feedstock economics
The commodity chemicals business is large, complex,
and highly competitive. The U.S. chemicals sector currently
relies almost exclusively on petroleum (Figure 2) and natural
gas (Figure 3) for raw materials, although there is growing
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interest in renewable biomass as an alternative feedstock (2).

Many factors influence the selection of the specific
feedstock to be used in a process, including conversion
chemistry and catalysis, product yield and selectivity, process complexity and severity, and environmental and other
constraints. In cases where more than one feedstock can be
used, selection is often based on relative price.
For example, several feedstocks can be used to produce ethylene, but ethane is typically chosen because
of its higher ethylene yields, and thus lower price per
pound of product, over lower-yielding feedstocks, such as
propane, butane, petroleum naphtha, and gas oils. In addition to higher yields, the historical abundance of ethane
derived from conventional natural gas production, and
more recently from hydraulic fracturing, makes ethane
the preferred feedstock in the U.S. In areas of the world
where ethane is in short supply (e.g., Europe and Asia), and
therefore expensive, other feedstocks are often the most
economic choice.
Crude oil costs impact the price of petroleum-based
feedstocks used to produce petrochemicals such as
ethylene. High oil prices negatively impact the price of
petroleum naphtha and gas oils, which are used for the
production of ethylene, and the price of benzene, toluene,
ethyl benzene, and xylenes (BTEX), which are also major
petrochemical feedstocks.
Over the past decade, the price of crude oil has undergone several dramatic swings. Such instability in the oil
market makes it extremely difficult for chemical manufacturers to plan for the future (i.e., match feedstock availabil-

u Figure 1. Petrochemicals derived from

petroleum and natural gas are building blocks
for a variety of important end products.

ity with future projections of product

demand).
Natural gas prices in the U.S.
over the past decade, on the other
hand, have generally been below the
prevailing price of crude oil and have
experienced somewhat less price
volatility. The U.S. Energy Information Administration (EIA) expects the
abundance and low price of natural
gas to continue over the next several
decades (3). Thus, the U.S. chemicals industrys interest in alternative
pathways for producing other petrochemicals from methane (Figure 4),
the predominant component found in
natural gas, is not surprising. Methane
is a basic chemical building block that
can be used to synthesize virtually
any organic molecule.

Building Blocks
Ammonia

End Uses
Urea-based fertilizers
Phenol formaldehyde-based plastics and adhesives
Cellulose acetate-based fibers

Methanol

Polyvinyl acetate-based paper and textiles

Ethanol solvents, cosmetics, and pharmaceuticals

Ethylene

Etyhlene glycol-based coolants and fibers

Polyvinyl chloride-based plastics

Propylene

Polyethylene-based plastics
Polystyrene-based plastics
Adipic acid-based nylon and fibers

Butylenes

Phenol and acetone

Polypropylene-based plastics and fibers

Butadiene

Isopropanol-based solvents
Polybutylene-based plastics
Polyether polyol-based urethane foams

BTEX

The current landscape

The high hydrogen-to-carbon ratio in natural gas
makes it an increasingly attractive fuel and feedstock in
an increasingly carbon-constrained world. Wellhead gas
is typically 90% methane (C1), with the remainder mostly
ethane (C2), propane (C3), and butanes (C4). Varying, but
typically small, amounts of CO2, H2S, and N2 may also be
present. Gas processing plants remove these impurities and
fractionate gas collected in the field into natural gas that
meets pipeline specifications, as well as natural gas liquids
(NGLs), which are mixtures of propane and butanes containing some ethane. Methane, ethane, propane, isobutane,
and n-butane are all used as raw materials for the manufacture of chemicals. Applications for these compounds are as
follows:
C1 conversion. Today, natural gas is the predominant
feedstock for the production of ammonia, methanol, and
hydrogen within the U.S. chemicals sector. Due to its
chemical stability, methane is currently not converted
directly into petrochemicals.
Instead, industrial processes utilize a two-step conversion process. Methane is decomposed into synthesis gas,
a mixture of carbon monoxide and hydrogen, commonly
through a steam-reforming process, which can then be
used to synthesize a variety of chemicals. The endo
thermic reforming of methane is typically conducted at
very high temperatures (7001,000C) over a nickel-based
catalyst (1):

Styrene butadiene-based tires and synthetic rubber

products

CH 4 + H 2O CO + 3H 2

(1)

Often, reforming is coupled with the lower-temperature

water-gas shift reaction (2) to further modify the H2-to-CO
ratio prior to conversion to the desired product:
CO + H 2O H 2 + CO2

(2)

The largest application of methane within the chemicals

industry is the production of ammonia based on the HaberBosch process. High-purity hydrogen produced by the
reaction shown in Eq. 2 is reacted with high-purity nitrogen
produced by air separation over magnetite-based catalysts
at high pressures (60180 bar) to produce ammonia:
N2 + 3 H 2 2 N H 3

(3)

Methanol is also produced from methane-derived synthesis gas. Methanol is used in several applications, including as an intermediate for the production of formaldehyde
and acetic acid, which are the basis for a variety of products, including plastics, paints, and adhesives. Methanol
synthesis is typically carried out at moderate temperatures
(240C) and pressures (510 MPa) over a multicomponent
catalyst containing copper, zinc, and alumina:
CO + 2 H 2 C H 3OH

(4)

Methane-derived synthesis gas is used in several areas

outside of the U.S. to produce synthetic transportation fuel,
lube oils, and waxes via the Fischer-Tropsch process.
Article continues on next page
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SPECIAL SECTION: ENERGY

Natural-Gas-Based Building Blocks

(Today)

Petroleum-Based Building Blocks

LPG
Naphtha
Gas Oils
Residual
Oils

Hydrogen

BTEX

Ammonia

Ethylene

Syngas

Propylene

Methanol

Methane

Butylenes and
Butadiene

Ethylene

NGL

Propylene

p Figure 2. Streams derived from crude oil refining are used to produce
ethylene, BTEX, propylene, butylenes, and butadiene. As producers switch
from naphtha to NGLs as feedstock to produce ethylene, they must consider
the relative amounts of byproducts produced from each. Steam cracking
of petroleum naphtha, for example, produces a lower yield of ethylene, but
higher yields of valuable propylene, butylenes, and butadiene byproducts,
than NGLs. BTEX and additional propylene, butylenes, and butadiene are produced within refining processes aimed at the production of gasoline. Therefore, refiners can decide, based on market conditions and other factors, to
recover and sell those byproducts, but this will reduce gasoline production.

C2C4 conversion. Ethane, propane, and butanes are

starting materials for the production of many end products,
and the intermediate production of synthesis gas is not
required. Although ethane, propane, and butanes can be converted to several useful products, steam cracking to produce
ethylene is the most significant industrial application. Steam
cracking consists of rapidly heating diluted hydrocarbon
streams with steam to very high temperatures, typically in
excess of 800C. The overall reaction for ethane is:
C2 H6 C2 H 4 + H 2

(5)

The reaction occurs through a free-radical mechanism and produces many byproducts, which can include
methane, acetylene, propylene, butylenes, butadiene, and
pyrolysis gasoline (an olefinic and aromatic naphtha). The
amounts of the various byproducts are very dependent on
the feedstock. Generally, higher-molecular-weight feedstocks such as naphtha produce more byproducts.
The mixed effluent stream is fractionated to purify
ethylene and recover the byproducts, which are valuable
intermediates for producing a variety of chemical products.

Challenges and opportunities

Industry has only recently begun to realize the opportunities presented by the abundance of inexpensive natural gas. Hydraulic fracturing technology is expected to
continue to evolve, opening up more unconventional gas
reserves to production both in the U.S. and worldwide. The
gas processing industry is actively pursuing new markets
for this gas, such as LNG for transportation and power
generation. The expansion of LNG import and export terminals around the globe will also provide greater access to
this resource by overseas chemicals producers.
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Butylenes

p Figure 3. Commercial technologies for the production of hydrogen,

ammonia, and methanol require methane to first be converted into synthesis
gas, which is then converted into methanol. This two-step process is inherently
inefficient. Steam cracking of NGLs produces propylene and butylenes, but not
a sufficient quantity of these materials to meet market demand.
Natural-Gas-Based Building Blocks
(Future)
Hydrogen

am
Ste

ing
orm
Ref

Partial Oxida
Methane

NGL

Syngas

tion

Oxidative Coupling

Catalytic Dehydrogenation

Ammonia

Methanol
Ethylene
Ethylene
Propylene
Butylenes and
Butadiene

p Figure 4. Technologies are being developed and demonstrated that in

the future will allow many basic building blocks of the chemicals industry to
be produced directly and more efficiently from natural gas and NGLs.

Chemicals manufacturers are actively examining an

increased role for natural gas liquids as feedstock in the
short term (510 yr) and for natural gas as feedstock in the
longer term (2025 yr). With these opportunities also come
challenges. The increase in gas supply has caused several
market imbalances regionally in North America and globally that are still being resolved. As we will discuss, these
imbalances will be resolved in the short term.
A significant challenge in both the short term and long
term are uncertainties related to rapidly evolving policies
and regulations aimed at mitigating environmental and
climate-change impacts. These will require industry to
continuously reevaluate existing chemical operations and
future capacity additions.
For example, current climate-change-related regulations being promulgated by the U.S. Environmental Protec-

tion Agency (EPA) incentivize the use of low-carbon fuels,

such as natural gas, for power generation. The chemicals
industry, which has already implemented major energy
efficiency improvements since the 1980s (4), will likely
be called upon to make further improvements to meet the
challenges of climate-change mitigation. However, the
challenges associated with climate-change mitigation and
adaptation also open up new opportunities for chemicals
manufactures to improve existing products and develop
new ones to address these challenges.
Near-term outlook. Low domestic natural gas prices in
recent years have prompted U.S. oil and gas producers to
shift drilling operations away from areas containing dry gas
(i.e., shale gas rich in methane, but with low NGL content)
to areas containing wet gas (i.e., shale gas rich in NGLs) in
order to improve their return on investment. That shift has
altered the balance of feedstock used for the production of
ethylene toward ethane and away from petroleum naphtha.
While low-cost ethane is the preferred feedstock for
ethylene production, using more ethane feedstock in place
of petroleum-based feedstocks has had significant ramifications. Petroleum-derived steam cracker feeds produce
more, and a wider range of, chemical byproducts, such as
C3C4 intermediates (propylene, butenes, and butadiene),
than ethane feedstock. Thus, reducing petroleum-based
ethylene production has created a shortage of these other
raw materials for the chemicals industry. That trend has
resulted in a flurry of activity to substitute alternative feedstocks and conversion pathways for the production of the
C3C4 intermediates. Several U.S. chemicals manufacturers have implemented technologies to directly dehydrogenate propane to propylene (5).
Chemical companies are also investigating technologies to produce butylenes and butadiene directly, some of
which employ natural gas or biomass as the starting material (6). Those development trends are likely to continue
in the short term, until the supply imbalance in C3 and
C4 chemicals is alleviated. Until those technologies are
commercially demonstrated, the U.S. will be increasingly
dependent on imports to fulfill C4 and BTEX demand due
to the shift to lighter feeds in steam crackers.
Recent innovations relating to alternative methane
conversion pathways are just coming to fruition. For
example, Celanese, BP, and Eastman Chemical have
made significant progress in catalyst development aimed
at producing acetic acid, ethanol, and monoethylene
glycol directly from synthesis gas (79). Celanese is in
the process of scaling up and demonstrating its ethanol
technology. Start-up firm Siluria is currently demonstrating the viability of using oxidative coupling of methane
to produce ethylene at the pilot scale (10). In addition, biotech start-up companies are in the early stages of geneti-

Strategic Partnerships

ndustry, academia, and government need to strategically partner for the U.S. to take full advantage of the
opportunities presented by affordable and abundant
shale gas. As identified at a recent AIChE workshop on
natural gas utilization, appropriate technology development roles for each entity are as follows:

Government
Develop technology R&D roadmap and vision
statement.
Provide stewardship for a sustainable, long-term
R&D effort.
Foster scientific innovation.
Facilitate partnerships among industry, academia,
and national laboratories.
Develop a framework that will enable the transfer
of fundamental learning among all partners.
Provide assistance to technology developers so
they can more easily move from early-stage R&D to
large-scale commercial demonstration.

National Laboratories
Develop and scale up potential breakthrough technologies that are in very early stages of development
and financially risky for individual companies to consider
independently.
Apply high-performance analytical and computing equipment and methodologies to gain fundamental
understanding of new technologies.

Academia
Educate future engineers and scientists on energy
and environmental issues of critical importance (e.g.,
climate change, water resources, sustainability).
Ensure students obtain an education that prepares
them for positions in the reemerging petrochemicals
industry.
Provide fundamental understanding and scientific
innovation in the areas of catalysis, reaction engineering,
separation science, and process design.

Industry
Provide facilities, matching funds, and other
resources for technology demonstration projects.
Provide financial support to technology developers transitioning from early-stage R&D to large-scale
demonstration.
Supply industrial experts for government steering
committees to ensure that government R&D investments
are strategic and relevant to the needs of industry.
Develop, assess, and validate novel technologies
that show promise to improve the performance of existing chemical production processes and enable the use of
natural gas as a feedstock for the production of a wider
range of petrochemicals.

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SPECIAL SECTION: ENERGY

cally modifying microorganisms to produce chemical

intermediates directly from methane and/or CO2 (11). A
major challenge will be developing scalable technologies
that can be integrated with current industry assets.
Longer-term outlook. Many opportunities exist for the
development of technologies to expand the utilization of
natural gas as a raw material for the chemicals industry.
The overall drivers for long-term technology development
are feedstock risks, stricter environmental regulations,
climate-change mitigation, and shareholder demands for
sustainable business development. If international negotiations are successful, the latter two factors should come into
better focus before the end of this decade.
In the longer term, technology development efforts
will likely focus on direct routes for converting methane,
including catalytic conversion of C1C2 via non-syngasbased routes, selective methane activation (C-H bond), and
the development of cost-effective high-temperature materials (>1,300C) enabling selective methane pyrolysis.
Due to the critical role of ethylene, propylene, and C4
olefins and their derivatives in the current petrochemicals
market, the development of technologies enabling the
direct conversion of methane to saturated and unsaturated
hydrocarbons could be a game-changer, reducing dependency on feedstocks produced by petroleum refining.
Research and development efforts will also continue
to focus on developing efficient and affordable chem-
ical pathways for the other mainstays of the chemicals
industry, BTEX. Nanotechnology and biotechnology
are likely to become major tools in the toolbox for achieving those advances.
Current manufacturing processes will also undergo
changes. Smaller-scale operations may become more
prevalent, due to the need to reduce the venting and flaring
of natural gas and oil-associated gas at the wellhead a
significant source of greenhouse gas emissions. This will
require R&D focused on process intensification and modularization to make emerging technologies in this area more
reliable and affordable. For example, the development
of integrated catalytic membrane reactors that leverage
a high-temperature hydrogen-selective membrane could
significantly increase the overall efficiencies and yields for
synthesis gas production and hydrogenation processes.
The chemicals industry currently supplies many materials used in applications aimed at improving the energy
efficiency of processes, engines, and buildings. Climatechange mitigation, adaptation, and resiliency measures will
become even more important in coming decades. This will
likely result in even greater demand for energy-efficient
products and services produced from natural gas, and the
industry will be called upon to develop new and improved
materials for these applications.
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Closing thoughts
The U.S. is the beneficiary of abundant natural
resources in particular, conventional and unconventional natural gas. It also has a history of developing new
and novel technologies for exploiting these resources. The
combination of these factors has resulted in a national gas
renaissance. The abundent natural gas resource was realized through technologies developed through collaboration
between government and industry over 20 years ago.
The emergence of shale-based natural gas resources
has provided the U.S. with an unprecedented opportunity
to realize greater energy autonomy, and can be a stepping
stone along the path to a lower-carbon future. In addition
to the conventional uses of natural gas as a fuel for the
production of heat and power, and as a feedstock for the
production hydrogen, ammonia, and methanol, natural gas
could be used as a feedstock for higher-value commodities
traditionally derived from petroleum resources. That could
lead to reduced energy imports and increased opportunities to export low-carbon natural gas as well as naturalgas-derived products.
Collaboration among government, industry, and
academia needs to be rekindled to ensure that our natural
gas resource is used wisely to provide economic benefits
and energy security for all, and serves as bridge to a lowCEP
carbon, sustainable energy future.

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(Mar. 2013).
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5. Dubose, B., Major U.S. Players Bet on Propane Dehydrogenation, Hydrocarbon Processing, 93 (7), p. 35 (July 2014).
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