Tuesday, October 11, 2011

Coals to Newcastle: Is it Rational to Make Ethanol from Hydrocarbons?

Celanese Corporation has developed a process called "TCX", for producing ethanol from hydrocarbons such as coal and gas. The company produces a range of acetyl products, including acetic acid, and patented a process for converting acetic acid to ethanol. Celanese has plans to build a coal-to-ethanol plant in China, and a gas-to-ethanol plant in Texas.

Everything hinges on the economics, of course. Celanese is focusing on the "industrial ethanol" market rather than the "fuels ethanol" market. The industrial ethanol market is a much smaller niche, and Celanese believes it can use its TCX process profitably if it aims at this smaller market.
The price comparisons in the table above suggest that if the production economics are comparable, it would be smarter to produce gasoline (or diesel) from your less valuable hydrocarbon feedstock -- coal or gas -- than to produce alcohols. But that is if you are targeting the fuels market.

Markets for industrial chemicals work a bit differently, and tend to fall under different sets of regulations. Celanese is already thoroughly involved in the industrial chemicals and materials business on a global scale. Often it is best to stay with what you know best, as long as you can make the numbers work.

Al Fin chemical engineers and industrial economists suggest that we are facing an ethanol glut on a global scale. Ethanol producers who are able to economically convert to butanol production should give such conversion serious consideration. And anyone considering either coal to liquids (CTL) or gas to liquids (GTL) for use as fuels, should probably avoid ethanol as a final product.

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