HOW MIGHT BIOFUELS IMPACT THE CHEMICAL INDUSTRY?

Considering the range of possibilities and constraints, a major transformation of the chemical industry's current capital structure is unlikely for at least a few decades.

The chemical industry is a critically important contributor to modern society, providing the raw materials for a staggering 70,000 products ranging from the chlorine used to purify water to the lightweight materials that comprise sporting goods (1). As a whole, the industry uses a significant amount of fossil fuel as energy to carry out the desired transformations and separations, and as the source of basic carbon building blocks. Thus, the energy sector and the chemical industry are intimately linked.

As energy demand steadily increases worldwide and the price of oil hovers around the psychologically important level of $100/bbl, the search for economically viable and environmentally benign alternatives - long the domain of the chemical engineering profession - has intensified. Hydrogen, nuclear, wind, solar and biofuels such as ethanol and biodiesel are being pursued as potential alternatives to conventional fossil fuels (2, 3). Although each has positive and negative attributes, the biofuels sector has garnered the most attention and has witnessed incredible growth in recent years.

The net benefit to society of a robust and large biofuels sector is still a matter of debate, however. The United Nations recently issued a policy statement calling for a five-year moratorium on the use of food crops for the production of fuels (4). At the same time, the U.S. Congress passed and President Bush signed into law an energy bill that calls for an increase in the use of biofuels (5). That these respected institutions hold such diverging opinions is evidence that this issue is both critically important and poorly understood.

What would be the potential impact of rising production and use of biofuels on the chemical industry? This question has received scant attention in the literature. Ultimately, the production of chemicals from biologically derived feedstocks must be driven by sound economics and the ability to meet desired technology/performance objectives.

This article provides insight into the potential of alternative feedstocks - with an emphasis on biofuels to serve as the key raw materials for chemical production. It focuses on the production of ethylene from bioderived ethanol, because compared to some alternatives that are being pursued, this is the most viable and straightforward potential feedstock replacement, and constraints discovered for this process will most likely be more severe for other alternatives. The discussion that follows also outlines the nature of the relationship between fuels and chemicals, and details recent changes in biofuels output. It then considers some environmental considerations and basic thermodynamic issues. Finally, this article showcases the key issues around scaleup, capital costs, variable costs, project decision-making, and the prospects for technological innovations that could materially change the analysis. We conclude that - given the prevailing technical, environmental and financial opportunities and constraints - a dramatic realignment of the chemical industry away from traditional feedstocks toward biofuels is highly unlikely to be realized over the next few decades.

Chemicals and fuels

Ethylene and propylene serve as the basic building blocks from which most polymers and chemical intermediates are made today (6). Both of these intermediates are produced by the high-temperature, gas-phase cracking of alkane feedstocks steam is used as a diluent in the steam cracking process, and external heat obtained from the burning of natural gas and process off-gas is applied to furnace tubes.

Typical feedstocks for steam cracking include ethane, propane and naphtha. These are obtained as purified products from natural gas processing and petroleum refining. When not used as chemical feedstocks, these materials find use as fuels.

The proportion of petroleumderived fuels that end up being used as chemical feedstocks accounts for roughly 1% of the total global energy market, or about 3% of the global oil and gas market. The chemical industry is quite efficient with the raw materials it utilizes during production, retaining a large fraction of the purchased feedstock in the end products it produces - typically about half of the energy and three-quarters of the mass.

Conversion enthalpy and separations - which are still dominated by distillation - account for the majority of the energy losses during petrochemical processing. These also represent a significant portion of the investment needed to build a plant. In fact, it is commonly estimated that 40-70% of both the capital and operating costs required during typical petrochemical processing are for separations (7).

The challenging separations required during steam cracking are accomplished by cryogenic distillation. Hydrogen, methane, olefins and other components typically exit the cracking furnaces at temperatures above 700°C, only to be compressed and cooled to cryogenic temperatures to allow the desired fractions to be separated by distillation. Despite this energy inefficiency, one redeeming quality of the cracker/separation train is that it scales exceedingly well. It is this characteristic that has allowed cracker complexes to increase in size in recent years, with the largest now being over 2,000 gigagrams per year (Gg/yr) (8).