TECHNOLOGY
OCR calls for petrochemicals from coal Chemical industry challenged to forget the past and re-examine coal as feedstock
Coal will be king again as feedstock for petrochemicals production. This, at least, is the conclusion reached in a recent Office of Coal Research report entitled "Chemical Byproducts From Coal." The 128-page compilation of data was prepared by Skeist Laboratories, Inc., Livingston, N.J., based on work by OCR contractors and outside engineering and construction firms. Though dealing with processes designed mainly to produce gasoline from coal with chemicals as important coproducts (C&EN, June 12, 1967, page 9 6 ) , the report strikes out boldly on page one. It claims that "The chemical industry should give high priority to coal conversion for the 1970's. Industry must not be inhibited in its plans because of past adverse experiences. Conditions have changed, the report adds, and it cites improvements in design and construction of refinery and petrochemical equipment which have resulted in an FEEDSTOCK. Coal mines, like oil wells, can be sources of chemicals. OCR's report names 14 such chemicals giving production and marketing data for them
actual decline in equipment costs per barrel of gasoline produced daily from $915 in 1952 to $864 in 1966. The productivity index for gasoline rose in the same period from 150 to 265 (1946=100), a 70% increase. Of even greater significance, OCR claims, is the huge increase in demand for petrochemicals calling for production units with capacities far greater than would have been practical 15 years ago. Another important plus for synthetic crude oil from coal claimed by OCR is that it's a much better feedstock for aromatics recovery than typical naphthene-rich petroleum crudes. In addition, there is the possibility of isolating a variety of intermediates not readily available from petroleum and with potential value for new families of plastics, fibers, and chemical specialties. Sulfur, ammonia, cresols, and cresylic acids add further to the potential profitability of the coal refinery." From all this OCR concludes that "It seems certain that [coal] will return to its historical status as the source of most of our organic chemical intermediates." Consistent with this assertion, chapter 10 discusses the "conceptual all-chemical refinery." There is, of course, nothing technically revolutionary about producing gasoline, fuel oil, kerosine, or what have become known as petrochemicals from coal. During World War II the Wehrmacht and Luftwaffe, as well as the English and Japanese war ma-
chines, were run largely on coal-derived gasoline. Furthermore, benzene, naphthalene, anthracene, and phenol have all been produced routinely by coal tar processors. The revolution, if it can be called such, would be one of scale. It has received its impetus from OCR's natural enthusiasm to find new uses for coal, and from the very concrete limitations on the U.S.'s known reserves of petroleum as well as the still huge amounts of coal reserves. Coal, in fact, represents about 80% (or 4600 quadrillion B.t.u.'s) of all known nonnuclear fuel energy reserves in the U.S. There is enough lignite, subbituminous, and bituminous coal to supply the nation's needs for generations. Petroleum supply limitations are much more pressing, though just how pressing continues to be a subject of much debate. When OCR talks of a date in the 1970's for the coming of age of chemicals-fromcoal, it implies that petroleum will be under sufficient strain by that time to make the switch economical. Humble Oil's manager of corporate planning, A. A. Draeger, doesn't agree. There has been concern, he admits, about the fact that during the past few years crude reserves additions have been averaging about 2.8 billion barrels per year, compared with a demand running about 3.5 billion barrels per year. But, he says, there are valid reasons for believing that this recent trend can and will be reversed. Mr. Draeger cites the shift away from
conventional land area exploration sites to more promising deep water and Alaskan locations. Imports, too, play an important (and Mr. Draeger notes, an extremely complex) role. Canadian reserves of petroleum are largely untapped. Recovery of oil from oil shale adds another factor. "Suffice it to say," Mr. Draeger told a joint meeting of the Commercial Chemical Development Association and the Chemical Marketing Research Association last November, "that the current assessment of the domestic industry is that it will prove capable of meeting demand for most if not all of [the 1970's]." With respect to coal liquefaction, Mr. Draeger looks for continued development of the needed technology and believes that "Those concerns which are successful in such endeavors will engage in commercial production on the basis purely of economics measured against market prices for crude oil. It is difficult," he adds, "to visualize synthetics as a major necessity within [the 1970's]." The views of the Humble planner and OCR are not so far apart, however, as the above might indicate. Whereas Mr. Draeger talks solely of oil-from-coal, OCR seems with the publication of its latest report to be increasingly emphasizing the chemical products available from coal liquefaction. Another factor which serves to bring the apparently disparate opinions of coal and petroleum people together is, simply put, that they are increasingly the same people. Charles G. Gulledge, president of Hydrocarbon Research, Inc., which developed the "H-Coal" coal-to-petroleum process, says that major oil companies view the coal conversion process with "intense interest." Evidence of this, he adds, can b e found in the recent
activity of oil producers to acquire coal companies and reserves of coal (C&EN, Aug. 12, 1968, page 19). Humble Oil, for example, has acquired sizable coal reserves and is conducting research in Bay town, Tex., on a coal-to-oil process. Atlantic Richfield worked with Hydrocarbon Research during 1968 in a joint program designed to modify the H-coal process. Consolidation Coal, another OCR coal-to-oil contractor, is owned by Continental Oil, and Pittsburg & Midway Coal Mining Co., still another OCR contractor involved in coal conversion, is a wholly owned subsidiary of Gulf Oil. OCR's emphasis on the chemical products available from coal conversion stems from one basic a d v a n t a g e greater profitability. OCR data show that return on investment improves markedly as an all-fuel operation is converted step by step into an allchemical refinery. Without by-product credits other than sulfur and ammonia, the report notes, an all-fuel operation does not begin to show an attractive return until production levels approach 100,000 barrels per day. At this level, using straight line depreciation, the return is 5.7% with gasoline priced at 12 cents a gallon. An all-chemical refinery looks much more attractive. Such a plant would produce the maximum volume of aromatics and convert a considerable volume of refinery gases to ethylene, propylene, butadiene, and butylene. The plant would produce 14 chemicals (see table) with a total value of about $150 million, compared with fuel valued at $80.6 million from a similar sized operation. The investment, OCR calculates, would be $103 million above the basic naphtha investment of $217 million. The increased investment would yield an increased net return of $18.8 million and a return on investment after taxes of 8%.
Much of petrochemical demand could be supplied by all-chemical coal refinery Current demand MM lbs.
Ethylene
100,000 bbl. plant production MM lbs.
% of demand
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13,000
1,120
Propylene
7,000
280
4
Butadiene
3,000
560
18.6
Title
Benzene
7,000
800
11.6
Company /Institution
Toluene
4,400
1,000
22.7
Street
Xylene
2,300
1,550
67
City
900
250
28
# LABINDUSTRIES
Naphthalene Sulfur
10 MM tons
180,000 tons
Ammonia
12 MM tons
100,000 tons
Tar Acids
155 MM lbs.
164 MM lbs.
Source:
Office of Coal Research
8.5
1.8 .83 100+
Name
State
Zip
The Error Eliminators 1802 V Second Street Berkeley, California 94710 CABLE: GATE-MERC, L.A. JAN. 6, 1969 C&EN
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