Paper 89D

ALTERNATIVE VISIONS OF THE FUTURE FOR PETROCHEMICAL MANUFACTURING TECHNOLOGY

Dr. Jeffrey S. Plotkin Director, Process Evaluation/Research Planning Program Nexant Chem Systems 44 South Broadway White Plains, NY 10601

Prepared for Presentation at American Institute of Chemical Engineers 2002 Spring National Meeting th 14 Ethylene Producers Conference March 10-14, 2002 New Orleans, LA

UNPUBLISHED AIChE shall not be responsible for statements or opinions in papers or printed in its publications.

Introduction. There is no doubt that the steam cracker is King. However, will this always be the case? The good news, at least for this audience, is that over the next twenty years steam cracking will likely to be still providing the bulk of petrochemical building blocks. Nevertheless, it is a good exercise to take a look at some of the R&D trends and initiatives that have been investigated over the last ten years or so and speculate on their impact on petrochemical process technology of the future. What are the technological drivers that will shape the petrochemical industry over the next 20 years? Several key trends emerged in the 1990s (and even before) and it is likely these trends will continue to influence petrochemical process technologies into the 21st century: Extending the methane value chain Alkane activation technologies chemicals from fuels Biotechnology

Extending the methane value chain. As natural gas resources are being discovered in various remote regions of the world there is a strong desire by local governments to monetize these natural resources by converting the otherwise stranded natural gas into transportable commodities such as methanol, ammonia and possibly liquid fuels. Owing to this commercial impetus, much development work is ongoing in gas conversion technologies. Two process technology developments should enable the methane value chain to be expanded to include production of chemicals now made by conventional petrochemical routes: New reactor technology for natural gas reforming to make precursor synthesis gas (syngas), mixtures of hydrogen and carbon monoxide, promises to reduce both capital and operating costs, resulting in improved economics for ensuing downstream products. Developing natural gas reformer technologies include a joint development by British Petroleum and Kvaerner and a separate effort by ICI (Advanced Gas Heated Reformer). Improved methanol production economics are also expected through commercialization of very large scale single train production units. Typically, world scale methanol plants are currently about 2,500 metric tons per day facilities. Methanol technology licensors, including Toyo Engineering, Lurgi, Kvaerner, and ICI are developing the capability to double the size of single train methanol lines to 5,000 metric tons per day. Thus, cost savings from new syngas reactor technology combined with the large economy of scale derived from very large methanol units will serve to drive down costs of methanol.

Improved syngas and methanol economics will renew interest in the development of C1 based petrochemical process technology. Of course, a C1 based chemical

industry is not a new idea. Two separate dislocations caused the industry to move previously in this direction. The first dislocation was World War II. Germanys lack of access to liquid petroleum feedstock for fuel and chemicals prompted German scientists and engineers to develop alternative means of making liquid fuels and led to the development of the so-called Fischer-Tropsch reaction that converted syngas from coal to liquid fuels. The second dislocation was during the mid -1970s and early 1980s that saw the price of oil skyrocket. The petrochemical industry reacted to this and many companies launched development programs designed to convert syngas from coal directly to chemicals. However, as oil prices collapsed these programs were abandoned. Now, once again we are seeing evidence that the industry is moving towards development of chemicals and fuels from syngas, not derived from coal but from natural gas. Furthermore this interest is being driven, not by a dislocation such as a war or cartel orchestrated supply restrictions, which can disappear as fast as they appear, but by the basic premise of good economics stemming from technological innovation and market expansion into developing countries. For example In the liquid fuels area we see increasing interest in new process chemistry and engineering, not just from traditionally active companies, such as Sasol, Shell, Conoco ,and Exxon, but also from new entrepreneurial companies such as Syntroleum and Rentech. In the chemicals arena UOP/Norsk Hydro and Lurgi have made very good progress in converting methanol-to-olefins (MTO) and methanol-to-propylene (MTP). While these routes are not yet competitive with conventional petroleum-based sources of olefins at the current price of oil, it will not take too much of a rise of oil prices or too much imagination to make MTO or MTP processes attractive in the new millennium. Key derivatives of methanol such as formaldehyde and acetic acid will also benefit from lower methanol costs. In fact it is interesting to speculate that some old chemistry may become economic again. For example, a route to ethylene glycol that was practiced by DuPont until 1968 was based completely on C1 chemistry. This route, owing to anticipated lower costs along the entire methane value chain, may yet find a new lease on life in the 21st century. Acetic acid production via methanol carbonylation technology has seen some recent dramatic cost improvements. The Celanese low water process and the BP Amoco iridium catalyzed Cativa process have each allowed acetic acid plants to double or even triple in capacity with very little additional capital. This has allowed fixed costs per pound to be significantly reduced. Chem Systems has found that acetic acid cash cost by these new world class mega-plants is as low as 7-8 cents per pound. Acetic acid at such low costs makes it an interesting candidate as a feedstock to make other chemicals and thus represents a key material in building up a C1 based chemical industry. A particularly interesting notion is to convert low cost

acetic acid by hydrogenolysis to ethanol, especially with regard to the use of ethanol as a potential replacement for MTBE as an environmentally safe fuel oxygenate. Other potential chemicals that can als0be envisioned as part of the links in the 21st century methane value chain. Alkane activation chemicals from fuels. After World War II many large volume monomers were made using acetylene as the key starting feedstock. Acetylene, having a highly reactive triple bond, provided a ready handle for chemists to grab onto and for designing process chemistry. Chemical engineers were able to translate the high yield reaction chemistry into relatively simple plant designs with limited need for recycle streams or complex separation/purification schemes. Of course the big problems with acetylene based process chemistry were the safety issues involved with handling large volumes of acetylene and its expense. The high reactivity of acetylene does not come cheap. A lot of energy, and hence expense, is needed to put the triple bond into acetylene and this expense was unavoidably passed on to any downstream products made from it. The advent of selective transition metal oxidation catalysts enabled olefins to replace acetylene as the major feedstock and ushered in a new era of petrochemical process technology in the 1960s and 70s and the industry is still reliant on olefins as the key feedstocks for most monomers. While the development of smart olefin oxidation catalysts was the key to moving the industry away from expensive and dangerous acetylene, many engineering developments were required to allow successful large scale commercialization of olefin based processes. These developments included the handling of the high levels of heat from reaction exotherms, difficult separations from the inherently lower selectivities achieved, avoidance of feedstock/oxygen explosion regimes, catalyst fouling issues, and materials of construction concerns from the typically higher temperature operation coupled with corrosive reaction environments. In the first part of the 21st century the next phase in the progression of the chemical industrys drive to utilize cheaper and cheaper feedstocks will be the use of alkanes (e.g. methane, ethane, propane, butane). The direct conversion of alkanes, using transition metal catalysis, into chemicals has been the subject of much research and development efforts starting as long as 30 40 years ago. The technical challenges for the direct conversion of alkanes to chemicals are formidable. Unlike acetylene and olefins there is no ready handle in alkanes for catalyst designers to target. In addition, the engineering challenges will likely be even more challenging than the issues encountered in commercializing olefin based processes. Almost certainly, reaction conversions per pass will be relatively low to try and maintain acceptable selectivities. This will require extensive recycle streams and associated equipment. The potential certainly exists for production of over-oxidation products such as carbon oxides which will cause environmental concerns. In addition, these processes may require fairly exotic materials of construction as reaction temperatures and corrosive catalyst

promoters may be needed. All of these factors will lead to increased capital intensity. It may very well turn out that successful development of alkane acitivation technologies will be the recognition that there will be a trade-off in low cost feedstock for higher capital investment. In other words will the cost advantage of employing low cost alkane feedstock offset the likely additional capital investment needed. Probably the most notable success story in alkane activation technology is the conversion of n-butane to maleic anhydride. This process was first commercialized by Amoco using a Chem Systems process in 1975. It is interesting to note that 25 years later this process is still the only example of a commercially operated transition metal catalyzed alkane oxidation process for a commodity chemical. Perhaps the reason for this is not so much that n-butane is easier to activate than other alkanes, but rather the product, maleic anhydride, is both thermodynamically and confirmationally highly stable. In essence, maleic anhydride is a thermodynamic and kinetic well and it would be perhaps surprising to avoid it formation. A spin-off of the success of the n-butane to maleic anhydride process is technology to further react the maleic anhydride, acid or maleate esters to 1,4butanediol and tetrahydrofuran. These products which find use in spandex fibers, engineering polymers, and specialty solvents and water soluble polymers had for many years been exclusively from acetylene based processes. Now several companies, including Kvaerner, BP Amoco/Lurgi, and Du Pont, have leveraged their success in alkane activation technology and extended their reach downstream into higher value 1,4-buanediol and tetrahydrofuran. What can we look forward to in the early part of the twenty-first century with regard to commercialization of other alkane acitvation processes? Three alkane activation technologies are now very close to commercialization. One process is the European Vinyl Corporations (EVC) ethane to vinyl chloride monomer (VCM) process. EVC has recently announced their intent to build a commercial scale plant. The currently used process for making VCM is a complicated multi-step sequence for converting ethylene to VCM. Many previous attempts to develop an ethane based process had failed as the temperatures required to activate ethane resulted in low selectivities of VCM and severe corrosion problems. The key to the new EVC ethane to VCM process is development of a catalyst that is active at relatively low temperatures avoiding the severe corrosion problems and reaction by-products. A second process that appears very close to commercialization is propane to acrylonitrile. BP Amoco, Asahi, and Mitsubishi Chemical are independently developing this type of process. Chem Systems assessment of the current state of the art of such a process indicates that the economics of the propane based route are only marginally superior to the conventional based propylene route. However, it should be noted that in any economic analysis of alkane activation

technologies, it is necessary to look not just at the prices of the alkanes but to consider the price differential between the alkane and corresponding olefin in the region of the world where the technology is to be employed. The long-range forecast is for high demand for propylene as a result of strong demand for polypropylene. This will lead to higher pricing for propylene and will tend to make the economics of propane based process technology more attractive. The third alkane activation process near commercialization is ethane to acetic acid. Recently SABICs subsidiary, Ibn Rushd, announced their intention to build a 30,000 metric ton per year semi-works plant for converting ethane to acetic acid. SABIC then plans to build a full scale 200,000 metric ton per year plant once the technology is proven out in the smaller unit. Biotechnology is increasingly finding use throughout the fine chemical, pharmaceutical and agrochemical business sectors. Now, innovations in biotechnology are starting to move from the fine and performance chemicals arena to commodity chemicals and even refining. In the past, it has not been common for chemical companies to use molecular biology to engineer a desired biological system for a commercial process. This has usually been viewed as an activity that is beyond the province of chemical companies and best left to small specialist organizations. In addition to the different skill set required for bioengineering, the chemical and mechanical engineering challenges will, in many cases, be very different from the typical processing issues faced in developing conventional petrochemical processes. For example, biotech processes generally must deal with low concentration aqueous solutions of microbes, feedstocks, and end-products. In addition, reaction rates are often low as compared to classical catalytic petrochemical reaction rates. These features will require the know-how for economically managing large volumes of water, including isolation of endproducts from water without incurring huge energy costs due to vaporizing copious quantities of water, exposing sensitive bio-catalysts to harsh conditions, and clean-up of waste water streams for environmentally safe disposal. For commercial technology precedents in operating design and protocols to cope with these challenges, the developing bioprocessing sector may find it helpful to look to other industry segments such as food and beverage processing, pulp and paper, and pharmaceuticals. A very promising technology under development by a number of new start-up companies, such as Diversa and Maxygen, is the incorporation of genetic material from extremophiles for developing temperature resistant bio-catalysts to cope with the harsh conditions needed for commercial chemical or petroleum processing. Extremophiles are naturally occurring organisms prospected and mined from extreme environments such as geysers, hot springs, ocean vents, brine ponds, polar ice caps, and even polluted water bodies. Because these

organisms have naturally evolved to be able to withstand very harsh environments they might be expected to be used directly or used to genetically alter other bio-catalysts lacking the ability to withstand harsh processing conditions. Despite these challenges, many large and historically petrochemical-based corporations are now extending their reach into biotechnology and the life sciences. DuPont, Hoechst, DSM, Rhone-Poulenc, Dow, and others have all declared that biotechnology and the life sciences is a major thrust area for them. These companies are developing the necessary skills and expertise and we are looking to these companies to lead the biotech revolution in the chemical and petroleum areas in the new millenniuim. The combined effect of market demand and technological advances has led to a number of emerging applications of biotechnology based chemical manufacture in different industry segments. These technologies are moving at different paces and have different prospects for commercialization. One exciting development is DuPonts and Genecors joint development effort for making a new monomer, 1,3-propanediol (PDO) from glucose through the use of genetically altered microbes. PDO finds application in high performance polyester fibers. Based on information from DuPont patents, Chem Systems has assessed the economics of a speculative biotech PDO process in comparison to the new ethylene based route recently commercialized by Shell Chemical and the older propylene route used by Degussa (recently acquired by DuPont to ensure short term developmental quantities of PDO until their biotech route is perfected). We find that the biotech route has the potential to be competitive with or even somewhat more cost effective than Shells ethylene based route. If the biotech route reaches full-scale commercialization in the 21st century it will be the first example of a biotech route being competitive with a petrochemical route for a large volume monomer. It should be cautioned, however, that DuPont still faces many scale-up challenges before full scale commercialization can begin. Other biotech opportunities include biomass to ethanol, glucose to acetic acid, propylene glycol from starch, glucose to succinic acid and then onto butanediol, and polyhyrdoxyalkanoates from plants (plants as plants).