Substituting for Crude Oil: Bio-Feedstocks to Petrochemicals

One of the main themes of the Al Fin Energy blog is the development of substitute and alternative feedstocks to use in place of crude oil, in the production of fuels, high value chemicals, polymers, lubricants, fertilisers, and more.

For example, RheTech Inc. is developing a new high volume composite material derived from sugar cane feedstock, which will replace oil derived materials in automobiles, construction, and consumer products:

RheTech, Inc. has developed a new grade of biocomposite using sugarcane-based, high-density polyethylene supplied by Braskem, the largest thermoplastic resins producer in the Americas and a leader in biopolymers. The new grade adds to RheTech’s line of RheVision biocomposites for application in the automotive, consumer and construction industries.

... Braskem is the Americas’ top thermoplastic resins producer. With 35 industrial plants spread across Brazil, United States and Germany, the company produces more than 35 billion pounds of thermoplastic resins and other petrochemicals per year. Braskem is also the world’s leading biopolymers producer with its 440 million pound Green PE plant that produces polyethylene from sugarcane-based ethanol.

RheTech, Inc. is a leading producer of filled and reinforced polypropylenes and color concentrates and additives for the automotive, truck, electronics, construction, and consumer markets. RheVision is a line of bio-reinforced polyolefins that currently uses wood, rice hull, flax, agave and coconut shell waste as reinforcement. _GCC

Substitution of alternative materials in place of crude oil, frees up more crude oil for global oil markets. Another example from the US DOE's NREL:

Scientists at the US Department of Energy’s National Renewable Energy Laboratory (NREL) have developed a new photo-biological process for the sustained production of ethylene from CO2. The NREL team introduced a modified gene sequence encoding an ethylene-forming enzyme from Pseudomonas syringae pv. into a cyanobacterium—Synechocystis sp. PCC 6803—and demonstrated that the organism remained stable through at least four generations, producing ethylene gas that could be easily captured. Research results were published in the RSC journal Energy & Environmental Science.

Ethylene—a valuable commodity two-carbon chemical that can be oligomerized into transportation fuels—is the most widely produced petrochemical feedstock globally. The organism produced ethylene at a high rate and is still being improved. The laboratory demonstrated rate of 171 milligrams of ethylene per liter per day is greater than the rates reported for the photosynthetic production by microorganisms of ethanol, butanol or other algae biofuels. _GCC

Most crude oil being used today was originally created by micro-organisms, over geologic time scales. Humans are merely attempting to optimise microbes for much quicker, high volume production of fuels, high value chemicals, and other materials, so as to turn hydrocarbons into renewable chemicals and fuels, rather than "fossil fuels."

Substitutes for Crude Oil in the $3 Trillion Global Chemicals Market

We have been assured by resource scarcity doomers that there is no substitute for crude oil. Believing that there is no substitute for crude oil is what makes it so easy for peak oil doomers to predict the collapse of civilisation, and the subsequent great human dieoff.orgy.

But what if human ingenuity were able to come up with better, cheaper, cleaner, safer substitutes for crude oil? Not only for transportation, but -- more lucratively -- for high value chemicals, polymers, lubricants, fertilisers, etc. that help make up the $3 trillion a year global chemical markets?

The global chemicals market is worth about $3 trillion annually, according to the American Chemistry Council. Its products can be found in 95 percent of all manufacturing processes. Much of it involves petrochemicals, which account for about 24 percent of the crude oil used in the U.S.

"A lot of brand owners, particularly those that rely heavily on packaging, are interested in protecting their long-term costs," said Douglas Smock, an analyst who wrote a report for market-research firm BCC Research that predicted a boom in plant-based bioplastics. "They want more predictable cost structures going forward. The high price of oil is responsible for the rapid emergence in interest in bioplastics."

...Ford Motor is using soybean foam in its upholstery. McDonald's is testing paper cups for hot drinks in place of polystyrene, which starts out as petroleum. Coca-Cola and PepsiCo are becoming bioplastic bottlers. A California cleaning-products manufacturer has set out to eliminate diesel from its fleet.

.... Ford said it has eliminated 5 million pounds of petroleum annually by using soybean-based cushions in all of its North American vehicles. The company said it got rid of an additional 300,000 pounds of oil-based resins a year by making door bolsters out of kenaf, a tropical plant in the cotton family.

_DenverPost

One of the coming revolutions which will help create alternatives for crude oil in several mega $billion industries, is the coming of cheap, abundant, high quality process heat from non-fossil fuel sources such as HTGRs (high temperature gas cooled nuclear reactors). Look closely at the following images in order to discover some of the possible dividends of high quality industrial process heat from non-fossil fuel sources.



While many of the high value substitutes for crude oil can easily come from biomass and biomaterials such as biolipids, in the early stages far more will come from natural gas, coal, oil shale, etc. Methane hydrates will likewise be used on a large scale to substitute for crude oil.

The idea that there is no substitute for crude oil is doomer drivel. But don't tell the doomers that. They do, after all, have just as much a need for a purpose in life as anyone else. Even if that "purpose" is relatively vacuous.

More here

Gas to Petrochemicals Puts Downward Pressure on Oil Demand

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Crude oil is used for a wide range of purposes.  As economical substitutes are found to replace crude oil in its various uses, demand for oil tends to decrease. This is exactly what is beginning to happen for the industrial uses of oil, including the huge global petrochemicals and plastics industry.

In the US, ethane taken from "wet gas" will soon be "cracked" to the lucrative plastics precursor ethylene. Both Aither and Shell are racing to build expensive new ethane crackers in the US natural gas regions.

An ethane cracker converts natural gas into the bedrock elements of plastic, such as ethane, ethylene and polyethylene, and opens two doors to a global market: selling ethane-related products to existing plastic manufacturers, and attracting ethane-based manufacturers.

"Look at any (ethane) cracker in the world and you'll see at least one plastic manufacturing plant next to it," said Paul Badger, professor of chemistry at Robert Morris University.
The world of plastic is an intriguing market to enter.

"Ethylene is the No. 1 petrochemical in the world and is in fairly high demand ... The market fluctuates at times, but the demand for plastic will always be there," Badger said. _TimesOnline

In the Persian Gulf region, gas-rich Qatar is increasing its petrochemical production from natural gas to take advantage of new demands and improved technologies.

Qatar can capitalise on a number of competitive advantages in the chemicals sector, most importantly the availability of the world's third-largest gas reserves, which provide low-cost domestic energy and feedstock, as well as smaller, but significant, crude oil resources.

These have led to the development of the petrochemicals and fertiliser industries in particular. When natural gas is processed, it generally produces around 90% methane and 10% ethane. Methane is used in the production of ammonia and urea fertilisers, while ethane is a feedstock for many petrochemicals. _Zawya

In fact, Qatar is spending roughly $25 billion to expand its petrochemical production.

We should also mention here that Qatar's operating Pearl gas to liquids (GTL) plant, financed and operated by Shell, is on track to generate $6 billion in profits per year, from the production of diesel from gas, lng, and other petrochemicals.

The Earth's complement of natural gas has barely been tapped. And once safe and economical means of tapping into the enormous gas hydrate resource have been developed, we will see an even more rapid global rush into GTL and petrochemicals from gas.

The substitution of alternative fuels and feedstocks in place of crude oil has just begun. And the economics of $100 a barrel oil -- despite the rapid devaluation of the Obama dollar -- favours an accelerated upward curve in new substitution technologies and applications. This can only put a downward pressure on demand for crude oil.

As Energy Mix Changes, Dependency on Oil Will Decrease

Oil is expected to be the slowest-growing fuel in terms of demand over the next 20 years as biofuels and other renewable energy sources take a larger role in meeting the world's additional energy needs, BP said Wednesday.

...Renewables on their own contribute more to world energy growth than oil, BP said, with the largest single fuel contribution coming from gas, which will meet about at third of the projected growth in global energy demand....Shale gas and coal bed methane will account for almost two thirds of US production by 2030 as the country looks at potential LNG exports. _Platts

BP Energy Outlook 2030
The North American shale oil bonanza will not only feed into the global LNG market, but also into the gas to liquids (GTL) market.

With North American natural gas reserves climbing to more than a century of production, developers are considering the once unthinkable alternative of converting North American natural gas to petroleum fuels and chemicals through Fischer-Tropsch synthesis. Several projects are proposed to use gas from conventional and unconventional production. From the North Slope of Alaska to the marshes of Louisiana, developers are evaluating full-scale GTL. This meeting will review the projects as well as the dynamics behind this shift. _Zeus Houston 7 March 2012

And besides GTL and LNG, other markets will grow to utilise the unconventional gas windfall. Markets for ethylene, other high value chemicals, plastics, and more, exceed $400 billion a year in the US alone. When the price spread for natural gas is so favourable, one cannot expect big chemical companies to ignore potential savings.

All of the estimates displayed above tend to significantly underestimate GTL, and probably CTL as well. Whether biomass to liquids technologies shoot upward as quickly as they could do, depends upon the economics of competing feedstocks such as methane. If breakthrough technologies are developed for harvesting methane hydrates, advanced biofuels to liquids may well either be delayed, or will be combined with both CTL and GTL in a variety of combinations -- depending upon the end product desired.

As the greedy oil dictatorships of the world (Russia, Iran, Venezuela, etc) see more substitution liquid fuels coming on to the market in greater volumes and with greater rapidity, they will discover a sudden need to reinvest in oil & gas field technologies AND the need to begin "playing nice" with international investors.