=chemistry =energy =economics
Is methanol to olefins an economically viable process in the USA? The answer is complicated.
I previously
suggested that the USA should
have invested in a large amount of methanol production from natural gas. I
received some criticism by email of that by an engineer at a large
petrochemical company, and I wanted to make some clarifications, lest I seem
uninformed to such people.
The main use I envisioned for greatly
expanded methanol production is as a substrate for fermentation using
synthetic methylotrophy. That's definitely "new technology" so it's not a
justification for including methanol production in a list of things
specifically using existing technology, but maybe it clarifies my
perspective.
I'm absolutely not saying that companies like Exxon and
Shell should have invested in methanol-to-olefins plants instead of ethane
dehydrogenation. As long as there's more natural gas to extract ethane from,
that's cheaper. As for propylene, ethylene dimerization to butene and olefin
metathesis for propylene is still a cheaper route than using methanol. The
problem is, if you imagine US usage of ethylene or propylene increasing
severalfold, there's simply not enough ethane. Already, there's simply not
enough propane in natural gas for propane dehydrogenation to be the best
route to propylene, and a large % of ethane in US natural gas is converted
to ethylene. If usage of natural gas for heating decreases due to better
insulation and heat pumps, and demand for olefins increases, then that
changes things.
Polypropylene usage has been growing faster than the
overall economy, which means that people have been finding ways to replace
other things with polypropylene. If companies were smarter, that would
happen faster. Is such substitution considered "new technology"? I'm not
sure. Also, construction of new housing could use a large amount of
polypropylene, and the USA should be building more housing. So, I think it
was justified to put methanol production on that list without considering
potential new technology. But despite how cheaply they can be made, I don't
consider polypropylene or polyethylene to be very good uses for ethylene or
methanol. They're low-performance materials. It's possible to do better, and
the better you can do with them, the more it becomes desirable to replace
steel, concrete, and wood. Yes, replacing any of the current commodity
polymers was given up as a tar pit decades ago, but now we have the modern
internet and far more papers. Also, more expensive materials are sometimes a
substitute for labor, so their value can depend on labor costs.
Of
course, "new technology" is an ambiguous division. If you put together all
the little improvements in the literature that are actually good, it should
be possible to make methanol for $200/ton at 10% IRR using natural gas at
$2.50/MMBtu, but that would amount to a rather novel plant design. All
invention can be considered a combination of existing components; "new" vs
"existing" technology is an arbitrary line based on the complexity and
novelty of such combination. While methanol prices have temporarily been
lower than that, investments weren't being recouped, and Methanex would probably consider even that much cost reduction for such a
mature technology to be unrealistic; all I can say is that I do understand
basic stuff like the capital costs and exergy destruction sources for
something like steam methane reforming.
Methanol-to-olefins is mainly
used in China, with syngas production from coal. Using coal for that
produces a lot of CO2, and isn't economically competitive. The Chinese
government has been (opaquely) subsidizing construction of plants for that,
for strategic geopolitical reasons that should probably worry you.
If
you wanted to make renewable polypropylene, gasification of biomass and
methanol production is the best current route. But that's obviously
considerably more expensive than current methods, I don't see the USA
replacing natural gas usage with biomass; cheap natural gas is a strategic
advantage that the USA won't be conceding.
Currently, ethylene and
propylene prices are high, >2x their prices 1 year ago. Naphtha steam cracking plants are being run at
full capacity, despite that being a considerably more expensive route than
ethane dehydrogenation. I could have written about underinvestment in ethane
dehydrogenation rather than methanol, but until recently US ethylene prices
have been quite low, and some improvements in ethylene dimerization are
relatively recent. (I'm expecting an increase in ethylene dimerization for
propylene production in the USA.) There's been a lack of coordination, and
the result is the large price swings happening now. These price swings are
significantly larger than even the relative cost increase from using biomass
instead of natural gas.