Oil Companies Placing Big Bets On Pyrolysis Oil
The future of circular plastics?
I’m traveling for work right now (you know, my day job) and it’s somehow harder to write in my hotel room than it is while at home. I suspect it’s got something to do with the access to ad support television in the hotel room with the gigantic TV. Were commercials always this compelling? There were some big announcements recently around circular plastics that I want to cover before I board this flight to go back home. First, a big thank you to the sponsor of this newsletter Task Force Talent.
Large Bets On Volume
Dow | The Materials Science Company (see how they switched from chemicals to materials science?) is betting on sustainable crackers There is a planned investment into revamping their Fort Saskatchewan site in Alberta, Canada to be a net zero carbon emissions facility while also tripling production for their ethylene cracker.
What is an ethylene cracker you ask? Well it’s essentially how we can convert ethane, a petroleum distillate, to ethylene. There are predominantly two types of cracking: catalytic and steam. Catalytic cracking gives us fuels while steam cracking gives us things like ethylene and propylene, steam cracking produces enes. Essentially, two hydrogen atoms are removed. Polymerization of ethylene is how we make polyethylene and I cover the basics of that here.
It appears that if Dow is successful here they will likely roll it out to all of their other crackers. It appears as if the Net Zero portion comes from capturing the hydrogen produced as a “clean fuel’ technology and then capturing and storing the carbon dioxide offsite. I think it would be better if they could transform their own carbon dioxide into something useful, but perhaps in the future.
ExxonMobil is betting big on the chemical recycling of plastics in Baytown, Texas. According the ExxonMobil’s press release they are already producing commercial volumes of circular plastics from their pilot facility. Exxon plans to start-up their Baytown site by the end of 2022 and want to have 500,000 tons of capacity available by the end of 2026.
I suspect that ExxonMobil is going to be making polyethylene here as it looks like their pilot facility was using low density polyethylene bags (the ones you get a gas stations and grocery stores) to make a chemical intermediate similar to oil distillates and then steam cracking that back into I’m guessing ethylene, but it could be propylene.
There could be additional opportunities here for Exxon to use their plastic waste intermediate to make high value fuels such as aviation fuels if they have access to a catalytic cracker, but it depends on oil prices. Whenever oil prices get really high (and it appears they might) ExxonMobil might want the ability to “swing” their production from plastic to fuel to capture a potentially higher margin product. Typically production facilities in chemicals are designed to do one type of process and the term swing is used to denote the capability of reactors or production lines to switch to something else. This flexibility can be a real asset to companies when market dynamics shift. I don’t think there are swing crackers, but it could be as easy as having these production assets close enough to each other to run some pipes and put some valves in place.
I don’t know a lot about chemical engineering, but I do know that working with great chemical engineers is really rewarding. A chemist can only go so far on their own and the same is true of a chemical engineer. If you need to hire a chemist, a chemical engineer, or just someone technical with very specific skill sets you should contact this month’s sponsor Task Force Talent. Currently, with the great resignation and people re-evaluating their jobs it’s tough to fill open roles, especially ones that are location dependent.
Shell and Pryme have come to an agreement on pyrolysis oil. This agreement is for 2022, but it’s part of how Shell is going to try and meet their goal of recycling a million tons of plastic waste by 2025. The pyrolysis oil plant will be operated by Pryme, but will have a capacity to an estimated 350,000 tons by the end of 2024 and the capacity of the plant if it is full represents about a third of Shell’s goal. They just need two more plants capable of these volumes by 2025 to be running. Shell plans on using the pyrolysis oil in their steam crackers in Moerdijk (The Netherlands) and Rheinland (Germany). Glad you know what a steam cracker is now right?
Shell will still need to make significant investments in their own capacity to make their ambition goal of a million tons of plastic recycled by 2025. It will be interesting to see what types of plastic they choose to try and recycle. My guess is they will want to do Polyethylene, Polystyrene, and Polypropylene. I’m not sure anyone will want to recycle polyvinyl chloride.
What Does This All Mean?
These are all big moves by big chemical giants, but to me it indicates that this is a really serious business with billions of dollars being invested to make it happen. I suspect that plastic waste will become more and more valuable as there becomes a market for it and if Exxon, Shell, and Dow are good at one thing it is selling out their plants from a volume perspective.
This problem that has persisted for decades might be solved relatively quickly if the economics of the business works. I think there is an untapped market here too for Dow, Exxon, Shell, and their competitors to do curbside hauling or partnerships with municipalities to sort and move the plastic waste. In theory they could be “paid” to collect their raw materials and can then sell their new products to the market. A potential economic win-win or doing well by doing good. Should be an exciting few years to watch this unfold.
For those of you who are working in this space and have questions about the product stewardship of these intermediates and new chemicals from pyrolysis and/or gasification check out Bergenson and Campbell’s podcast All Things Chemical. This episode is about circular economy conversion.
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