Bad Chemistry: Coal Emerges as Chemical Feedstock

High oil prices have driven investments into biofuels and alternatives to petroleum-based product options. Even though some of the efforts appear misguided from an environmental perspective, the influx of cash has allowed a variety of new ideas to receive funding. But dirty solutions to the price of oil are beginning to ramp up. A troubling new article in the chemical industry trade mag, Chemical and Engineering News, reports that coal is making in-roads as a feedstock for bulk chemical production.

“If the price of oil stays above $50 or $60, I think that within 10 years, using coal as a chemical feedstock will be a very big industry in China,” says Zhang Yuzhuo, a Shenhua Group vice president and chairman of China Shenhua Coal Liquefaction.

Running directly counter to “green chemistry” companies like one funded in November Novomer, some in the chemical industry are exploring gasifying coal into methanol, which is a step away from the building blocks of bulk chemicals, ethylene and propylene. The economics seem to indicate that crude oil over $50 a barrel will make coal an economical option.

The problem with the process is that it generates a lot of CO2. While the article doesn’t go in-depth on coal-to-liquids technology, environmental groups, and the National Resources Defense Council, are convinced that CTL is a disaster, if the point is to reduce greenhouse gas emissions.

It’s too bad, too, as the chemical industry has actually been one of the better industries from an emissions perspective. While US businesses have essentially held their absolute CO2 emissions steady since 1990, they are still pumping around 77 million metric tons (PDF) of CO2 into the atmosphere. (For comparison, California’s total emission are about 500 million metric tons of CO2 equivalent.) Not bad for an enormous industry that in the US alone produces more than $600 billion a year worth of products that appear in 96% of manufactured goods, according to a chemical industry presentation (PDF).

What this highlights for me is that even with green technology steadily gaining ground and funding, we still need to make emitting carbon dioxide more expensive through regulation. Right now, the risk of CO2 regulation is all that is keeping some of these dirty responses to the rising cost of oil from becoming established.

As Dave Witte, executive vice president of strategy consulting for the Houston-based consulting firm Chemical Market Associates Inc, told C&EN, “One of the big disadvantages of coal is that you make CO2… Even if it isn’t a hit today, it could be at some point in the future if carbon taxes are enacted.”

Still, the distress of the chemical industry could be a big opportunity for a biogas company. Methane is a major feedstock, and isolating it, say from agricultural waste streams, could be an immediate business if it can gain the scale needed by such a huge industry.

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