Alternative Routes from Fossil Resources to Chemical Feedstocks

ALTERNATIVE ROUTES FROM FOSSIL RESOURCES TO CHEMICAL FEEDSTOCKS:

The Problem, a Methodological Approach. a n d the Case of Methanol

G. Dobrowolski, M. ~ e b r o w s k i

S y s t e m s R e s e a r c h D e p a r t m e n t of the h s t i t u t e f o r Control a n d S y s t e m s Engineering ( A c a d e m y of Mining a n d Metallurgy) a n d of the Industrial C h e m i s t r y R e s e a r c h I n s t i t u t e , Cracow, Poland

J. Kopytowski

h d u s t r i a l C h e m i s t r y R e s e a r c h I n s t i t u t e , Warsaw, Poland J. Wojtania

P r o s y n c h e m Engineering Co ., Gliwice , Poland

RR-84- 19 September 1984

INTERNATIONAL INSTlTUTE FOR APPLIED SYSIXMS ANALmS Laxenburg. Austria

International Standard Book Number 3-7045-0073-9

Research Reports, which record research conducted a t IIASA, a r e independently reviewed before publication. However, t h e views a n d opinions they express a r e not necessarily those of t h e Institute or t h e National Member Organizations t h a t support i t .

Copyright O 1984

International Institute for Applied Systems Analysis

All rights reserved. No p a r t of t h i s publication may be reproduced or t r a n s m i t t e d in any f o r m o r by any means, electronic o r mechanical, including photocopy, recording, or any informa- tion s t o r a g e o r retrieval s y s t e m , with.out permission in writing from t h e publisher.

Printed by Novographic, Vienna, Austria

The r e s e a r c h described i n t h i s report was initiated in 1981 within t h e framework of collaboration between IIASA a n d t h e Academy of Mining arid Metallurgy in Cracow, Poland. A t IIASA two r e s e a r c h groups were particularly involved i n t h e study: The Resources a n d Environment Area (Mineral and Energy Resources Task), which was concerned with the relationship between t h e n a t u r a l resource base and s t r u c t u r a l change i n different industries, and t h e System a n d Decision Sciences Area, in connection with its work on deci- sion s u p p o r t s y s t e m s .

This r e p o r t is concerned with t h e general issue of industrial s t r u c t u r a l change a n d t h e related resource problems, focusing particularly on the chemical industry and its sources of hydrocarbon feedstocks. Most of t h e hydrocarbons c u r r e n t l y used i n t h e chemical industry a r e obtained by pro- cessing n a t u r a l gas and crude oil, which a r e also of fundamental importance t o t h e energy sector. However, these r e s o u r c e s a r e n o t inexhaustible, and several c o u n t r i e s a r e trying to overcome t h i s problem by exploring the technical arid economic feasibility of using gaseous and liquid hydrocarbons derived frorn coal a s substitutes for n a t u r a l gas a n d crude oil. This r e p o r t considers t h e implications of such changes in t h e resource base for t h e chemical industry. 0~)viously t h e r e can be no easy answers t o a question of t h i s complexity. What t h e r e p o r t a t t e m p t s to do, howevcr, is t o develop a methodology capable of identifying t h e possible ways of r e s t r u c t u r i n g indus- trial production processes in response t o c h a r g e s in t h e resource base. The use of t h e proposed methodology is illustratecl by a n analysis of t h e alterna- tive r o u t e s to t h e production of methanol. The results of t h i s case study show t h a t t h e proposed methodology provides a powerful tool for examination of t h e alternatives available t o industrial planners a n d may also be used t o describe m a n y of t h e i m p a c t s t h a t changes in t h e resource base can have o n individual industries.

A.P. WIERZBlCKI C h a i r m a n

System and Decision Sciences Program

J.KINDLER L e a d e r Institutions and Environmental Policies Program (formerly Resources and E n v i r o n m e n t Area)

SUMMARY

The chemical industry depends very heavily on hydrocarbon feedstocks, which are presently derived almost exclusively from crude oil. Although only about seven p e r c e n t of t h e hydrocarbons suitable for chemical processing are actually used i n this way, i t is already clear t h a t t h e r e is a potential conflict between the needs of the energy sector and those of the chemical industry:

they are competing for increasingly scarce liquid hydrocarbon resources.

The authors suggest t h a t the supply of hydrocarbon feedstocks to the chemical industry could be protected against the effects of changing patterns of energy use by modifying the underlying industrial s t r u c t u r e . They have developed a n approach which takes a variety of production processes (either in use or under development), compares their efficiency, their consumption of different resources, e t c . , and finds the combination of technologies t h a t best satisfies a particular demand while staying within t h e limits imposed by resource availability. This approach uses t h e techniques of interactive deci- sion analysis to incorporate the unquantifiable social and political factors t h a t m u s t influence any development decision. By way of illustration, the method is applied t o one very small part of the problem area: the different routes to the production of methanol.

This report does n o t a t t e m p t t o provide any final answer to the problem of feedstock supply, but r a t h e r t o explain one possible approach to t h e prob- l e m and discuss some intermediate r e s u l t s . I t is addressed not only to researchers, but also, a n d in particular, t o all decision makers and industrial consultants facing problems of this type.

CONTENTS

1 INTRODUCTION

2 PROBLEM IDENTIFICATION

2.1 Substitution of Hydrocarbon Feedstocks

2.2 Working Scenarios and Decomposition of t h e Problem Area 2.3 Measures and Data

3 AN APPROACH TO PROBLEM SOLUTION

3.1 Toward a Formal Representation of t h e Problem Area 3.2 General Model of a PUA

4 THE CASE OF ME'THANOL

4.1 The Methanol Industry and its F u t u r e

4.2 Production of Methanol from Fossil Resources 4.3 Results of Simulation Experiments

5 METHODOLOGY 5.1 Scope

5.2 Concordance as a Multiobjective Problem

5.3 Methodological Implications of t h e General Model 5.4 The Attainable Performance Area and Critical Resource

Area of a PDA

5.5 Steps i n Problem Solution

5.6 Methodological Interpretation of t h e Methanol Experiments 6 CONCLUSIONS

ACKNOWLEDGEMENTS APPENDIX

REFERENCES

The world is c u r r e n t l y passing through a period of g r e a t economic, social, a n d technological change. Recognition of t h i s fact, and of t h e need t o control t h e forces of change, has stimulated international i n t e r e s t i n t h e problems of change a n d m e t h o d s for coping with t h e m . Nowhere is t h e need f o r m a n a g e m e n t of c h a n g e m o r e crucial t h a n in t h e industrial s e c t o r , where many factors can affect t h e growth or decline of individual industries a n d t h e resulting industrial s t r u c t u r e . This paper will c o n c e n t r a t e on t h e chemical industry a n d t h e problems i t faces a s a r e s u l t of global change, particularly a s a r e s u l t of changing p a t t e r n s of energy use.

The importance of t h e chemical industry is o f t e n greatly underes- t i m a t e d . Not only does i t provide soaps, detergents, a n d medicines, b u t also pesticides, fertilizers, s y n t h e t i c rubbers, plastics, synthetic fibers ,... - in f a c t , our m o d e r n technological society could be said to be founded on t h e chemical industry. One of t h e m o s t surprising facts about this i n d u s t r y is t h a t a large proportion of its many products are derived from only a very small n u m b e r of starting m a t e r i a l s , of which hydrocarbons a r e probably t h e m o s t i m p o r t a n t . Hydrocarbons a r e chemical compounds containing only c a r - bon a n d hydrogen; t h e y c a n exist i n complicated ring s t r u c t u r e s as well a s long c h a i n formations; s o m e of t h e m r e a c t easily with o t h e r e l e m e n t s and compounds while o t h e r s a r e extremely i n e r t . Hydrocarbons occur naturally a s components of gas a n d c r u d e oil - most of those used in t h e chemical industry a r e obtained by processing crude oil. Thus it is immediately apparent t h a t t h e r e is a potential conflict between t h e needs of t h e energy s e c t o r a n d those of t h e chemical industry. they a r e competing for an increas- ingly s c a r c e r e s o u r c e

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c r u d e oil.

In view of t h e i m p o r t a n c e of t h e chemical industry, i t is c l e a r t h a t t h e supply of hydrocarbon feedstocks should n o t be allowed t o r u n dry. The m a i n a i m of our r e s e a r c h is t o develop a methodology capable of proposing possible r e s t r u c t u r i n g in various s e c t o r s of industry which would e n s u r e t h a t this type of situation could not arise. The approach chosen takes a variety of i n t e r r e - lated a n d alternative production processes (either in use or u n d e r develop- m e n t ) , c o m p a r e s t h e i r efficiency, their consumption of different resources, etc., a n d finds t h e combination of technologies t h a t best m e e t s a particular need while staying within t h e limits imposed by t h e availability of resources.

If this methodology is successful in solving the problems of feedstock supply, t h e n i t could also be helpful in t h e analysis of synfuel production since it leads t o a b e t t e r understanding of the dynamics of industrial s t r u c t u r a l change.

In r e c e n t years t h e r e h a s been m u c h discussion of f u t u r e levels of liquid fuel consumption, t h e availability of resources, and t h e economic a n d politi- cal factors affecting t h e i r production and consumption. The realization t h a t t h e supply of n a t u r a l hydrocarbons is not infinite, taken in conjunction with t h e production and pricing policies of OPEC and o t h e r producers, h a s led t o a m o r e c a r e f u l investigation of t h e balance of f u t u r e supply a n d d e m a n d . The m a i n r e s u l t of t h e s e considerations h a s been greatly increased r e s e a r c h into

m e t h o d s of producing synthetic hydrocarbons, with especial emphasis on syn- fuels. Many large-scale r e s e a r c h programs have been s e t up t o investigate whether t h e energy c u r r e n t l y obtained from liquid fuels could be replaced by n u c l e a r o r solar energy, biomass-derived energy, coal or lignite. One of t h e m a i n aims in energy-oriented r e s e a r c h is t h e production f r o m coal or lignite of gaseous and liquid hydrocarbons t h a t could be used a s s u b s t i t u t e s for n a t u r a l gas and c r u d e oil; t h e s e "synthetic" hydrocarbons may be loosely t e r m e d synfuels.

I t is difficult to predict where t h e m a j o r i n v e s t m e n t s i n new energy tech- nologies will be m a d e because:

1. Most of t h e technologies a r e a t a n early stage of development, a n d inves- t o r s prefer t o wait for some technological breakthrough before commit- ting their resources.

2. The various technologies (e.g., solar, n u c l e a r , biomass, coal-based) a r e comparable in t e r m s of t h e energy produced for a given capital expendi- t u r e ; therefore, i t is not c l e a r which technology o r combination of t e c h - nologies a given c o u n t r y o r region will choose t o adopt.

Complete substitution of c r u d e oil ( a t c u r r e n t levels of use) by products derived from coal would require 10,000-12,000 million m e t r i c tons of coal per year, assuming t h e p r e s e n t coal liquefaction technology. This m e a n s t h a t i t would be necessary to a t least quadruple t h e c u r r e n t a n n u a l world production of coal. The i n v e s t m e n t required t o process t h e coal is also very high. To pro- cess 10 million m e t r i c tons of c r u d e oil in a f u l l - t r e a t m e n t refinery c o s t s a b o u t $1,500 million. By way of comparison, studies show t h a t to obtain t h e equivalent products from coal i t would be necessary t o build conversion facil- ities capable of handling 40-50 million tons of coal per year, requiring capital i n v e s t m e n t in t h e range $10,000-12.000 million. To completely s u b s t i t u t e c r u d e oil by coal-based products on a global scale would require capital i n v e s t m e n t of t h e order of S(2.0-3.6) x lo1', a n d t h i s is clearly out of t h e question.

These considerations alone lead u s t o t h e conclusion t h a t t h e synthetic fuels industry is n o t likely to develop very rapidly. However, s u c h a situation would pose a t h r e a t to all developed economies because t h e chemical indus- t r y would be forced i n t o dangerous competition for hydrocarbons with t h e gasoline producing s e c t o r , where profit m a r g i n s a r e always very high. This has been recognized by IUPAC a n d was singled o u t in t h e recommendations m a d e by t h e IUPAC Conference held in Toronto i n 1978 (St. Pierre 1978):

"In monetary t e r m s i t h a s been e s t i m a t e d t h a t t h e o u t p u t of t h e organic chemical industry (with t h e c r u d e oil origin feedstock) of t h e world a m o u n t s t o t h r e e h u n d r e d billion US dollars annually. In addition, i t is essential to perhaps a t h i r d of t h e world's gross pro- d u c t . Any major change in t h i s i n d u s t r y will utterly change living p a t t e r n s a s we know t h e m today. Nevertheless, people generally, political leaders, and influential citizens s e e m unaware of t h e s e facts a n d t h e i r significance for t h e f u t u r e quality of life on earth."

This is t h e first report from a research project focusing on t h e problems identified above. The research was sponsored by t h e Polish Government Pro- g r a m on Coal Processing and carried o u t under a collaborative agreement between IIASA and t h e Academy of Mining and Metallurgy (AMM) in Cracow.

Poland;+ most of t h e collaboration o n the IIASA side has involved t h e Resources and Environment group, with partial support from t h e System and Decision Sciences Area. This report does not a t t e m p t to provide answers to t h e problems of feedstock supply, but r a t h e r t o explain one possible approach to t h e problem and discuss some intermediate results. Emphasis is placed on t h e general philosophy behind t h e approach r a t h e r t h a n on t h e technical or mathematical details, which a r e described in full elsewhere (Dobrowolski e t al. 1980a,b, 1982, Kopytowski e t al. 1981, Gorecki e t al. 1982).

The report is addressed not only to researchers but also, and in particu- l a r , to decision makers and industrial experts facing t h e problems outlined above. It is also directed t o funding institutions, in t h e hope t h a t their atten- tion will be drawn to t h e need to allocate resources for research in this very important a r e a .

The report falls into five main parts.

The first p a r t (Section 2) deals with identification of the problem: it begins with a summary of our work on alternative industrial structures, which will perhaps give t h e reader a better understanding of t h e complexity and n a t u r e of t h e system being studied. Various aspects of the production of hydrocarbon feedstocks a r e discussed and t h e connections between this activity and those in other sectors a r e revealed, with especial emphasis on energy resources. We also propose a natural decomposition of this whole area of chemical production into subareas (Production/Distribution Areas, or PDAs, s e e later); this disaggregation c a n be continued right down to areas based on individual chemical products such a s methanol. The importance of data collection is emphasized and t h e type of data used in t h e analysis is dis- cussed.

The second p a r t of this paper (Section 3) describes the approach developed to analyze t h e problem. We first give a generalized description of t h e chemical industry, which provides an introduction to our simple formal representation of t h e industrial s t r u c t u r e . The idea of a Production/

Distribution Area (PDA) is t h e n explained and developed mathematically; this is t h e basis of o u r methodological approach.

Having identified t h e problem area and presented a way of finding feasi- ble feedstock production strategies, Section 4 considers how our approach may be applied t o one very small part of t h e problem area - t h e production of methanol. The reasons behind the choice of methanol a r e elaborated and some general information on production technologies, conversion processes, and possible developments is given. We t h e n use t h e PDA model to carry out a comparative analysis of seven different methanol production processes, and t h e results obtained under various scenarios a r e discussed.

*The a c t u a l group involved is t h e Systems Research Department of t h e Institute for Control and Systems Engineering in t h e AMM and of t h e Industrial Chemistry Research Institute.

Prosynchem Engineering Co. also participated in t h e study.

Section 5 is c o n c e r n e d with t h e methodology developed t o t r e a t t h e fun- d a m e n t a l problem of m a t c h i n g available r e s o u r c e s with technologies ( t h e concept of "concordance"). This methodology is based on t h e principles of interactive multiobjective analysis. Some of t h e r e s u l t s obtained i n t h e pre- vious section a r e t h e n i n t e r p r e t e d i n t h e light of t h i s methodological discus- sion.

Finally, we s u m m a r i z e o u r findings and draw a n u m b e r of conclusions in Section 6.

2 PROBLEM IDENTIFICATION

2.1 Substitution of Hydrocarbon Feedstocks

It is not easy t o obtain precise information on t h e world-wide consump- tion of hydrocarbons by t h e chemical i n d u s t r y , b u t s o m e rough figures a r e available. It has been e s t i m a t e d t h a t only a b o u t t h r e e p e r c e n t of all t h e n a t u r a l gas and c r u d e oil produced annually is used a s feedstocks in t h e c h e m i c a l industry. However, since m o r e t h a n fifty p e r c e n t of t h e refined m a t e r i a l is unsuitable for this purpose, we may say t h a t t h e chemical indus- t r y consumes approximately seven p e r c e n t of t h e hydrocarbons available to i t , m o s t of t h i s coming from light c r u d e oil fractions. Thls figure s e e m s m a r - ginal when compared t o t h e t o t a l production volume, b u t r e p r e s e n t s a n i n p u t of critical i m p o r t a n c e to t h e chemical i n d u s t r y and t o t h e industrial s t r u c - t u r e a s a whole.

Hydrocarbons derived from c r u d e oil a n d used a s feedstocks in t h e c h e m i c a l i n d u s t r y a r e t r a n s f o r m e d by highly sophisticated technological processes into:

1. Compounds of low molecular weight, s u c h a s hydrocarbon m o n o m e r s containing double a n d triple carbon-carbon bonds, aromatics, and alcohols of different chain l e n g t h s .

2. Compounds of high molecular weight:

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plastics s u c h a s polyethylene, polypropylene, polyvinyl chloride, polystyrene, t h e i r copolymers, and a wide range of special plastics.

The t o t a l global production of plastics i s of t h e order of 60 million t o n s / y e a r .

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r u b b e r s s u c h a s styrene-butadiene r u b b e r (SBR), polybutadiene, polyisoprene, e t c . The t o t a l world-wide production of r u b b e r s is approximately 11.5 million tons / y e a r .

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flbers s u c h a s polyarnides, polyesters, polyacrylonitryl, e t c . The t o t a l production of fibers i n t h e world is jn t h e region of 10.5 million t o n s / y e a r .

3. A g r e a t variety of o t h e r compounds which when processed a r e used in t h e production of m a n y different types of goods and commodities.

In o u r preliminary r e p o r t on this s u b j e c t (Kopytowski e t al. 1981) we warned t h a t t h e production of t h e s e m a t e r i a l s could be severely affected by c h a n g e s in t h e level of production of hydrocarbon feedstocks c a u s e d by t h e lack of raw m a t e r i a l s a t acceptable prices. We s t a t e d :

"The crisis in the synthetic fibers m a r k e t has n o t been caused by lack of demand but by t h e losses incurred in t h e production process ... The prospective crisis in t h e synthetic plastics and rubber indus- tries is another illustration of the effects caused by a n unstable hydrocarbon market. Far-sighted industrialists a r e now selling the facilities used to make these products."

The scale of the problems facing the chemical industry has even reached t h e pages of the popular press. Le Monde (June 20, 1982) reports:

"The situation in t h e high-tonnage plastics industry is m u c h worse than we could have anticipated, with t h e total losses incurred by French manufacturers in 1981 exceeding 3 billion francs. This loss is essentially associated with t h e more widely used plastics (which represent 67 percent of total consumption volume), in particular the five thermoplastics (PVC, high and low density polyethylene, polypropylene, and polystyrene). This loss corresponds to 20 per- c e n t of the global sales of t h e industry (15 billion francs) and represents 75 percent of the total losses incurred by the chemical industry as a whole ( 4 billion francs)."

And a few lines later Le Monde gives the view of M . Schun, Chairman of t h e Syndicate of Plastics Manufacturers, t h a t

"the main cause lies in t h e prices, which a r e 25 percent lower than their equilibrium level. A long period of fierce competition between European manufacturers has created a situation of deadlock and has not allowed them to respond t o a fantastic increase in the demand for raw materials derived from crude oil."

Further on we read t h a t :

"The difficulties have caused a general crisis, with even t h e great German trio (Hoechst, BASF, and Bayer) registering a total deficit of 1.5 billion francs. The combined losses of all European plastics manufacturers are estimated a t 8-13 bil1ic)n francs."

A few months later, R e E c o n o m i s t (October 9. 1982) tells us:

"Europe's synthetic fibers industry is braced lor a fresh round of cuts in capacity. Manufacturers plan to sign an agreemerit in late October t o s h u t down 17 percent of the industry's capacity by the end of t h e year."

The article concludes:

"But most basic industries are finding t h a t t h e gains from moving into cleverer, high-profit and low-volume products a r e still offset by losses on their m u c h bigger bulk-commodities businesses."

Just two weeks later The E c o n o m i s t (October 2 3 , 1982) reports some more bad news for the chemical industry:

"The bosses of Europe's petrochemical industry commiserated with e a c h o t h e r a t t h e i r annual beanfeast i n Brussels t h i s week: t h e i r companies a r e losing between t h e m 200 million dollars a m o n t h . "

We could give many m o r e quotes from o t h e r newspapers and periodicals, b u t t h e s e would only serve to emphasize what h a s already b e e n said. When t h i s s o r t of information s t a r t s to appear i n t h e popular press i t m e a n s t h a t t h e t i m e left for finding a solution is running out; t h e temporary drop in oil prices should not be understood t o m e a n t h a t t h e danger h a s disappeared.

The h e a r t of t h e m a t t e r is m u c h m o r e complex a n d only a new s t r u c t u r a l development strategy can help us t o overcome t h e problem.

To move toward a solution of t h e s e problems we have t o consider various ways of designing a n industrial s t r u c t u r e which would robustly fulfill t h e r e q u i r e m e n t s of t h e chemical i n d u s t r y . The aim is t o develop s u c h a n indus- t r i a l s t r u c t u r e a t a low i n v e s t m e n t cost a n d , with t h e cooperation of t h e fuel industry, t o e n s u r e stable feedstock prices and supplies.

I t is clearly impossible to c a r r y out s u c h a n analysis on a global scale.

Rather, we should examine t h e balance between hydrocarbon demand and supply in individual countries or regions, taking into a c c o u n t t h e raw materi- als available and. t h e processes by which they c a n be transformed.

We c a n s u m m a r i z e t h e various steps in problem solution a s follows:

1. Developmerit of s o m e m e a n s of determining t h e d e m a n d vector in t h e consumption s e c t o r - t h i s is a typical scenario type of problem.

2. Development of some m e a n s of identifying a n appropriate industrial s t r u c t u r e ( i . e . , a n appropriate combination of production and conversion processes).

3. Investigation of t h e environmental corlstraints, t h e availability of resources, t h e final distribution of products, e t c .

Hydrocarbons can theoretically be obtained from any s u b s t a n c e contain- ing carbon. The higher t h e hydrogen c o n t e n t , t h e lower t h e cost of i t s transformation to a specific hydrocarbon compound. Ttie aim of our research is t o develop a method which wcluld identify t h e best way of substituting n a t u r a l hydrocarbons derived from crude oil by hydrocarbons from o t h e r m a t e r i a l s containing carbon (i.e., coal, lignite, oil shales, e t c . ) . Unfortunately t h e hydrogen c o n t e n t of these materials is no m o r e t h a n 4-5 percent, com- pared with 10-12 p e r c e n t in t h e n a t u r a l hydrocarbons c u r r e n t l y used a s feedstocks in t h e chemical industry. The technological processes used t o con- v e r t coal to liquid and gaseous hydrocarbons ( a n d coke) a r e s u m m a r i z e d in Table 1 . combinations of t h e s e and conventiollal production possibilities m u s t be analyzed, takirig i n t o a c c o u n t both construction a n d operating costs. To make t h e m e t h o d more universal a n d less susceptible t o c h a n g e s in relative prices, we e s t i m a t e "costs" in t e r m s of basic n a t u r a l resources, i.e., water, energy, land, materials, and manpower ( t h e WELMM approach) a s suggested by Grenon and Lapillone (1976) and Hafele e t al. (1982). When a final decision h a s been m a d e , t h e costs c a n also be evaluated. in monetary t e r m s under t h e

TABLE 1 Technological processes for coal conversion and t h e resulting products Process

- P r o d u c t

- - Extraction of coal a n d lignite by

g a s e s u n d e r supercritlcal conditions Mixture of light a n d heavy oils (syncrude) Extraction of coal by liquid solvents )

Hydrogenation of coal e x t r a c t s

Mixture of light a n d heavy oils (syncrude) H y d r o t r e a t m e n t of coal suspensions

Flash pyrolysis of coal a n d heavy oil m i x t u r e s

Flash pyrolysis of coal

I

Syncrude and coke

Coking Tars a n d coke

Carbide production Acetylene

Gasification of coal (oxidation) Synthesis gas

p a r t i c u l a r conditions prevailing a t t h e t i m e . Two cases a r e shown i n Figure 1 - t h e p r e s e n t s i t u a t i o n (a) a n d t h e m o s t r o b u s t solution possible in t h e f u t u r e (b).

We begin o u r search for a suitable m e t h o d by investigating s o m e of t h e options. Figure 2 illustrates one possibility based on t h e a s s u m p t i o n t h a t hydrocarbons a r e divided between t h e e n e r g y s e c t o r a n d t h e c h e m i c a l s e c t o r according t o priority of d e m a n d . In t h i s s i t u a t i o n , t h e r e f o r e , a t e m p o r a r y lack of feedstocks m a y occur a n d lead t o disruption in t h e production of plas- t i c s , r u b b e r s , a n d fibers.

The option m o s t popularly believed t o r e p r e s e n t a possible solution is i l l u s t r a t e d in Figure 3. It i s based on t h e supposition t h a t a lack of liquid fuels would provide a n incentive for large-scale i n v e s t m e n t in t h e e x t r a c t i o n of hydrocarbons f r o m solid fossil r e s o u r c e s , a n d t h a t t h i s would lead to a n a t u r a l division. of available resources between c h e m i c a l a n d e n e r g y s e c t o r s . This implies t h a t t h e production of feedstocks for t h e c h e m i c a l industry would become totally dependent on t h e equilibrium in t h e fuel s e c t o r , and could also lead. t o a situation i n which t h e hydrocarbons supplied t o t h e c h e m i c a l i n d u s t r y would n o t be i n t h e m o s t thermodynamically efficient form f o r c h e m i c a l processing.

Figure 4 shows a n o t h e r approach t o t h e problem. In t h i s case i t is a s s u m e d t h a t t h e r e i s a s e t of specific technological processes which could provide t h e basis for a n industry whose only furlction i s t o p r o d u c e feedstocks for t h e c h e m i c a l industry. This industry would cooperate with t h e fuel s e c t o r , buying p r o d u c t s obtained. by t h e processing of fossil r e s o u r c e s a n d selling c e r t a i n byproducts which could. be used i n t h e fuel s e c t o r . The supply of feedstocks to t h e c h e m i c a l industry would t h u s be a s s u r e d by o p t i m a l invest- m e n t s t r a t e g i e s for specific processes, which would be t:ime a n d m a r k e t d e p e n d e n t . Feedstocks would be produced efficiently a n d , a l t h o u g h t h e r e would be certai:n links with t h e fuel s e c t o r , feedstock production would c e r - tainly not be controlled by it.

FlGURE 1 Two possible routes from resources to fuels and feedstocks: (a) t h e present situation; (b) the most robust solution possible in t h e future.

FUELS Energy uses, e.g.,

transportation electricity heat

FEEDSTOCKS Commodities, e.g.,

plastics rubbers fibers c

r Refined products

FUELS Energy uses, e.g.,

transportation electricity heat

FEEDSTOCKS Commodities, e.g., c

b

b w

plastics rubbers .fibers

SYNFUELS Energy uses, e.g.,

transportation electricity

.

^heat

b

Refined products

b

Energy uses, e.g., -electricity

.

^heat

(b)

r plastics stocks r rubbers

fibers

FIGURE 2 Route from resources t o fuels a n d feedstocks based on t h e assumption t h a t hydrocarbons a r e divided between t h e energy s e c t o r a n d t h e c h e m i c a l s e c t o r according t o priority of demand.

Energy uses, e.g.,

r transportation electricity r heat

b

I

I

A I

1 Fuels

Other sources of energy

b

el

Commodities, e.g.,

Energy uses, e.g., r transportation r electricity

heat

Feed- r plastics

stocks r rubbers

FIGURE 3 R0ut.e m o s t popularly believed t o r e p r e s e n t a solution t o t h e problem of fuel/feedstock allocation of hydrocarbons.

A 4

FIGURE 4 Route from resources to fuels and feedstocks suggested by t h e authors.

2.2 Working Scenarios a n d 1)ecomposition of t h e Problem Area Energy uses, e.g., transportation electricity heat

b

Our approach to t h e problem outlined above is based upon a n analysis of t h e different ways of producing chemical feedstocks and synfuels. We con- sider various technological possibilities, and scenarios such a s :

Fuels

-

present and f u t u r e demand will be m e t by hydrocarbons derived from c r u d e oil only (an extreme case);

- hydrocarbons derived from c r u d e oil will be used to m e e t t h e p r e s e n t level of demand; any increase in demand must be covered by hydrocar- bons derived from hard coals and lignite.

A

Different assumptions concerning the level of f u t u r e demand and the availability of resources a r e examined to see how these factors influence the s t r u c t u r e of production. I t is also necessary to consider t h e various methods of energy production in this and other sectors, not only to compare the efficiency of energy use, but also to establish possible tradeoffs between the different industrial sectors.

Since t h e a r e a covered by the problem is so large and complex and requires such a vast a m o u n t of data, i t is virtually impossible (and could be misleading) to t r e a t it a s a single system. We therefore break i t down into a number of smaller areas (called Production/Distribution Areas or PDAs), each concerned with a particular closely related group of products. One such PDA could be defined a s follows:

A

t\

Other sources ^{v w}

of energy

Feed- • plastics

stocks rubbers

PDA 1: gasoline, jet fuels, diesel oil, fuel oil, simple monomers, simple aromatics, fuel gas ( n a t u r a l gas or SNG), methanol and t h e higher alcohols, n a p h t h a , a n d ammonia.

This could be broken down still f u r t h e r t o form a smaller PDA:

PDA 2: simple monomers, simple aromatics, m e t h a n e (SNG), methanol, naphtha, and a m m o n i a .

The way in which t h e s e PDAs can be constructed is t r e a t e d in some detail l a t e r in t h e r e p o r t .

One very i m p o r t a n t advantage of t h i s decomposition is t h a t various methodological approaches m a y be developed and tested using t h e smaller a r e a s before applying t h e m t o t h e problem as a whole. Another is t h a t t h e smaller t h e a r e a considered, t h e easier i t is t o examine t h e influence of changes in technology o r r e s o u r c e use - cause and effect relationships c a n be identified m o r e clearly in simple systems. Finally, decomposition also allows u s t o obtain t h e solution to a particular complex problem in several simpler stages; we c a n t r e a t t h e case of methanol (see Section 4) as one of t h e s e steps.

Returning t o t h e overall problem once again, i t is clear t h a t t h e r e can- n o t be a single solution which holds for all countries and economic regions.

Different countries have different demand vectors and access t o different fos- sil resources. The transformation of coal, lignite, e t c . into hydrocarbons would therefore require a different industrial s t r u c t u r e in different countries a n d / o r regions.

In parallel with t h e generation of different industrial s t r u c t u r e s , we c a r r y o u t a n analysis of t h e various alternatives to determine which of t h e m minimizes t h e c o n s u m ~ ~ t i o n of basic n a t u r a l resources. Since t h e analysis involves several c r i t e r i a , we use a multiobjective optimization technique (see Section 5 ) .

Tliere a r e two m a i n approaches t o our problem:

1. Simulation of a n u m t ~ e r (usually in t h e range 20-30) of different produc- tion processes composed of different technological units; t h e s e simula- tions should consider t h e transformation of all possible grades of fossil resources. The simulations are compared arid t h e best feasible solution is identified in a n interactive fashjon.

2. Simulation of all possible combinations of technologies; t h e optimization procedure selects several close-to-optimal solutions (in t e r m s of r e s o u r c e use), which a r e then analyzed by a multiobjective optimization mod el.

The first approach requires more work preceding computerized analysis, but can b e applied t o t h e problem under all sorts of different coriditions. This m e t h o d will be discussed in m o r e detail l a t e r in the report.

An a u t o m a t e d s y s t e m s u c h as t h a t required by t h e second approach would involve prior development of a large number of different technological models, some of which may t u r n out t o be useless or irrelevant i n t h e final

analysis. This type of approach should therefore be limited to r a t h e r narrow areas, s u c h as the methanol study mentioned earlier.

In practice, the method adopted will be a compromise between (1) and (2) which will depend on the particular case under consideration: the more complex the industrial structure, the closer the approach will be to (1).

2.3 Measures and Data

In order to construct a model it is necessary to establish some means of identifying not only the variables and parameters of the model, but also its constraints and objective function.

Three distinct types of values have been chosen to characterize a specific technological process or group of processes: natural resource requirements, technological parameters, and secondary parameters.

The first group reflects the requirements of a process for natural resources such as water, energy, land, materials, and manpower, t h e availa- bility of which determines whether a given process is feasible in a particular environment. These factors have an important effect on t h e economic efficiency of the process.

Water

Industrial plant ready for operation

CONSTRUCTION

Primary and secondary input

Water Energy

Land NORMAL

Industrial plant

Materials OPE RATION

Manpower

Primary and secondary output

FIGURE 5 Resources required in the construction and normal operation of a n indus- trial plant.

Figure 5 shows t h a t resource requirements can be estimated for two dis- tinct phases of plant activity: t h e construction (or implementation) phase and normal operation. The various factors conside1,ed in each phase are explained in more detail below.

C o n s t r u c t i o n p h a s e

Materials: Equipment, pipes, valves, steel structures, concrete, steel rein- forcements, and other material necessary on site.

Manpower: Numbers of manhours required for construction (can also be expressed a s a number of m e n working for a specified length of time).

Land: Amount of land necessary for siting plant and facilities.

Energy: Electrical, mechanical (fuels), and t h e r m a l energy necessary to carry out t h e construction work.

Water: Water required for sanitary and construction purposes.

N o r m a l o p e r a t i o n

Materials: This includes the primary and secondary materials consumed in t h e process and t h e materials used in normal operation (replace- m e n t valves, lubricating oils, etc.). The former a r e mostly either primary energy carriers (crude oil, coal, n a t u r a l gas) or secon- dary energy carriers (synthesis gas, naphtha), and could also be considered a s specific forms of energy (see below).

Manpower: Labor directly employed a t t h e plant.

Land: Amount of land occupied by plant, buildings, and facilities.

Energy: Electrical energy for driving machinery, heating, and lighting;

t h e r m a l energy (steam) for heating and driving machinery, and fuels used in industrial furnaces.

Water: This includes t h e water used in the process, t h e water used for cooling, and the water used for sanitation. I t is sometimes also important to specify t h e quantity of water lost, i.e., consumed in t h e process or lost to t h e atmosphere through evaporation.

This is basically t h e approach developed by t h e WELMM group to analyze energy strategies and options (Grenon and Lapillone 1976) and also has simi- larities t o the Bechtel model (Gallagher and Zimmermar.1 1978). We worked closely with t h e Resources and Environment group a t IIASA on our application of the WEI,MM approach, although we structured our data in a slightly different way so t h a t i t would be more flexible for practical purposes and com- patible with our model (see Sections 3 a:nd 4). However, this restructuring did not in any way r e s t r i c t t h e range of application of -the data base.

The second group of values used to characterize t h e process are the technological parameters. 'These include the total consumption of raw materials, t h e level of output of final products, capacities, and the kinetic or thermodynamic parameters of t h e production process.

The last group of values are what we call the secondary parameters of the process, a n d c a n be determi-ned only by combining and manipulating the information in t h e data base. These are coefficients such as the consumption

of materials a n d energy p e r u n i t o u t p u t , t h e productivity of labor ( m a n h o u r s per u n i t o u t p u t ) , operational demands, i n v e s t m e n t per u n i t output, and efficiency. The e x p e r i m e n t s considered h e r e a r e mostly described in t e r m s of this t h i r d group of p a r a m e t e r s , which makes i t possible t o consider e l e m e n t s from classical economics, such a s t h e r e t u r n on i n v e s t m e n t or t h e n e t p r e s e n t value of t h e chosen project alternative.

Data collection and evaluation a r e obviously very i m p o r t a n t p a r t s of t h e study. In t h e particular case of methanol, t h e information came largely f r o m opnrating data and t h e l i t e r a t u r e , b u t special technical studies also had t o be carried out to m a k e t h e data consistent and t o fill in gaps in t h e p a r a m e t e r e s t i m a t e s . The s a m e d a t a base was used t o derive all t h r e e groups of parame- t e r s ; t h e first two groups c a n be extracted directly b u t t h e t h i r d requires some initial manipulation of t h e d a t a .

3 AN APPROACH TO PROBLEM SOLUTION

3.1 Toward a Formal Representation of the Problem Area

Our aim is t o c o n s t r u c t a model describing t h e production s t r u c t u r e of t h e chemical industry which could t h e n be used t o g e n e r a t e various develop- m e n t alternatives. In o r d e r t o do t h i s we have t o look a t t h e i n d u s t r y as a whole and identify t h e crucial featu.res t h a t m u s t be included in t h e model.

There h a s been m u c h r e s e a r c h on this topic. Our own r e s e a r c h goes back several years (see Borek e t al. 1978, 1979) a n d is still in progress (Dobrowolski e t al. 1982). Another approach t h a t leads t o very interesting r e s u l t s is described by S t a d t h e r r and Rudd (1976) a n d Sophos e t al. (1980). The book by Kendrick a n d Stoutjestijk (1978) also proposes an interesting alternative process-type model.

Chemical production c a n b e viewed basically a s a sequence of processes t h a t change certain s t a r t i n g m a t e r i a l s into end products t h a t a r e quantita- tively a n d qualitatively (physico-chemically) very different f r o m t h e i n p u t material. The flow of m a t e r i a l t h r o u g h t h e production process c a n be con- sidered continuous, even in t h e case of period.ic reactions. There a r e usually a n u m b e r of ways of producing a given compound, nlost of which involve n o t one reaction but. a whole chain of t h e m . The s a m e compound may be used in a n u m b e r of reactions i n any gjven production chain and may also be used in other chains; t h e s e chains therefore form a network. Compounds going into o r produced by reactions i n t h e middle of chains a r e called semiproducts or i n t e r m e d i a t e s , and t h e r e is a very large m a r k e t for t h e s e m a t e r i a l s within t h e chemical industry itself. However, i t m u s t be said t h a t t h i s m a r k e t depends greatly on t h e s t r e n g t h of t h e d e m a n d for final products.

Thus t h e industry, by its very n a t u r e , is composed of a g r e a t n u m b e r of e l e m e n t s t h a t a r e very strongly interdependent, both technologically and economically.

Consider Figure 6, which shows how t h e r e s o u r c e vector X may be mapped o n t o th.e d e m a n d vector Y in a given economic environment. The d e m a n d vector m a y e i t h e r be based on observed d a t a or modeled according t o some scenario. Using t h i s demand vector a n d assumiilg t h a t i t excludes

Processinq of hydrocarbons

FIGURE 6 The problem: to map resource vector X onto demand vector Y in a given economic environment.

Method(s1 of conversion

wasteful consumption, i t is possible to d e t e r m i n e t h e production s t r u c t u r e for commodities t h a t m e e t s this demand. Then, working backwards, and using information on t h e chemical precursors of each commodity, it is possible t o determine t h e chemical production s t r u c t u r e t h a t underlies t h e production of this, combination of commodities.

It i s i m p o r t a n t to realize a t t h i s point t h a t we should not expect su'bstan- tial changes in large, investment-intensive a r e a s of t h e industrial s t r u c t u r e in t h e n e x t 10-15 years - industry simply c a n n o t afford i t , financially o r technically. Too many resources a n d too m u c h technical know-how a r e tied up in existing plants and processes t o allow massive reorganization. On t h e o t h e r hand, we have t h e fossil resources and m u s t decide how best to utilize t h e m .

We may therefore formulate t h e problem as follows (see Figure 6): given t h e demand vector Y and some vector X of available resources, we have t o find t h e combination of fossil resource ⁺ hydrocarbon conversion processes t h a t represents t h e optimal transformation, bearing in mind t h e existing industrial s t r u c t u r e , t h e associated environmental impacts, a n d so on. This is done using t h e previously described d a t a ^01.1 t h e various production processes a n d technologies in conjunction with t h e procedures described in Section 5.

However, we have already pointed o u t t h a t t.he a r e a of chemical produc- tion is m u c h too large a n d complex to be t r e a t e d a s a whole; i t m u s t be divided irito more manageable a r e a s based on a small n u m b e r of closely related products and processes. We call t h e s e sm.aller areas Production/

Distribution Areas (PDAs) because t h e y a r e largely concerned with the pro- duction and distribution of a particular chemical or group of chemicals.

There m u s t be a certain a m o u n t of freedom in selecting o r marking the PDA boundaries, although t h e relative density of technological connection is perhaps one of t h e most important factors to be considered h e r e . Others include organizational factors a ~ d ~ n a r k e t , labor, maintenance, transport, and supply conditions.

In f a c t , PDAs often corresponti roughly t o t h e a r e a s of production covered by t h e individual large chemical companies; it makes sense for each company t o deal with a particular closely related group of chemicals because they c a n t h e n coordinate t h e flow of intermediates, feedstocks, etc. through a s e t of linked processes with t h e m i n i m u m of dependence on external sup- pliers. These companies wish t o maximize t h e i r profits by developing t h e

Hydrocarbons

(to be found)

0 s

Demand vector

Resource vector Y

most efficient production s t r u c t u r e for a given economic/social/political environment; b u t , since t h i s environment is constantly changing, the produc- tion s t r u c t u r e m u s t evolve t o keep pace with it. The companies t r y t o adapt t o t h e new conditions by selling old plant, investing in new plant, and reallocat- ing resources, b u t generally t h e change in production s t r u c t u r e lags behind t h e changes in operating conditions, leading t o a loss of efficiency and hence of profits. The scale of the problem is illustrated very clearly by t h e quotes from t h e press given in Section 2. One very i m p o r t a n t application of our PDA model could therefore be t o help in determining t h e best production s t r u c - t u r e for a n individual company under various operating conditions. In addi- tion, by adjusting the boundaries of t h e PDA i t is possible to determine how individual companies could broaden t h e i r range of activities m o s t effectively.

Of course, the s a m e s o r t of results c a n also be obtained for PDAs t h a t cross these company boundaries and involve activities intersecting with those of several established production groups.

It should be emphasized t h a t t h e simplified model of the PDA described in t h e n e x t section includes only t h e easily quantifiable physical elements of t h e system; i t does n o t a t t e m p t t o take into account t h e sometimes very i m p o r t a n t but unquantifiable social and political factors t h a t will affect any development decision. The relative importance of t h e s e factors c a n only be assessed by t h e decision m a k e r ; this is why i t is i m p o r t a n t to use a n i n t e r a c -

t i v e decision support system (see Section 5 ) in conjunction with this model.

3.2 General Model of a PDA

We regard t h e chemical industry as being divided into a n u m b e r of sub- sectors, e a c h dealing with a group of closely related chemicals. These subsec- t o r s a r e called Production/Distribution Areas (PDAs) because they basically comprise a network of productioil processes and distribution flows for a very specific group of chemicals. The PDAs a r e linked t o each o t h e r and t o o t h e r industrial sectors through t h e buying and selling of chemicals. Our general model of a PDA m u s t therefore take i n t o account:

-

t h e processing and flow of chemicals within t h e PUA;

-

t h e flow of chemicals i n t o and o u t of o t h e r areas o r industries, representing t h e marketing or business activity of t h e PDA;

-

t h e flow of investment, revenue, and o t h e r resources s u c h as energy, manpower, e t c .

The model is given below in i t s basic form so t h a t i t s s t r u c t u r e may be more easily understood; however, t h e comp1.exity of t h e full computer imple- mentation should n o t be u n d e r e s t i m a t e d . We first define t h e links of t h e PDA with its environment (see Figure 7).

From Figure 7, we c a n write t h e following equation describing t h e outflow of any chemical j:

yms

+

Production1 Distribution

ymp j Area (PDA)

FIGURE: 7 The links between a Production/Distribution Area (PDA) and its environ- ment.

where

yjms

-

m a r k e t sale of chemical j yjmP ^- m a r k e t purchase of chemical j y? - coordinated sale of chemical j yFP - coordinated purchase of chemical j

J

-

s e t of indices representing t h e chemicals u n d e r consideration.

Here we introduce t h e concept of a coordinated flow, i.e., agreed buying and selling of chemicals among PDAs. This makes i t possible to achieve some f o r m of inter-PDA coordination.

Note t h a t we cannot usually describe this coordination by t h e formal decomposition of a larger problem containing a n u m b e r of areas. This c a n be illustrated by t h e situation t h a t arises when t h e source of an intermediate is a different PDA: t h e second PDA may not be willing t o reveal t o t h e first all of t h e d a t a t h a t would be necessary for optimization over all t h e PDAs involved.

Resources other t h a n chemicals required for network activities a r e denoted in Figure 7 by q , and include inputs s u c h as energy, labor, a n d water.

The particular formulation of t h e performance functions depends on t h e strategy and policy adopted by t h e industry and does not influence our con- siderations until we are ready t o solve t h e optimization problem.

Now let u s briefly look a t t h e form of t h e production/distribution net- work within t h e PDA. The network is formed by two types of elements:

-

process elements, which represent chemical processing;

-

balance nodes, which r e p r e s e n t t h e total flow of a n y chemical j .

We shall denote by J * t h e s e t of indices describing chemical processes taking place in t h e PDA under consideration.

I

Process Element PEk production level zk a production capacity jk

. . . . .

FIGURE 8 Process element PEk and the associated variables and parameters.

The way in which the network i s c o n s t r u c t e d ensures t h a t all of t h e con- ditions concerning links to and from t h e environment are t a k e n into account, regardless of t h e number of process e l e m e n t s a n d balance nodes.

Let u s consider a process e l e m e n t P E k , k E J* (see Figure 8). The vari- ables used in Figure 8 may be defined a s follows:

zk

-

production level of PEk zk A

-

production capacity of PEk

a j k z k - quantity of chemical j consumed by PEk b j k z k

-

quantity of chemical j produced by PEk qk ( z k )

-

necessary resources.

For t h e balance nodes we inay write a n equation of t h e following type:

y . =z+-2:

3 3 3 (2)

for each chemical j , where y j - total outflow of j z - total production of j zj 3-

-

total consumption of j.

The network is coilstructed from process e l e m e n t s and balance nodes in a way t h a t reflects all of t h e technological corlnections p r e s e n t i n t h e system.

Of course, a process element may be connected to other process elements only through balance nodes.

Having defined t h e network, we rnay formulate t h e following equations:

Total production of chemical j :

Total consumption of chemical j

Substitution of (3) a n d (4) i n t o ( Z ) , a n d combination of t h e r e s u l t with (1) l e a d s t o

To complete this somewhat simplified description of t h e i n t e r n a l PDA net- work, we have t o add t h e c o n s t r a i n t s imposed by production capacity. The form of t h e s e constraints will depend on t h e type of c h e m i c a l process con- c e r n e d , a n d m a y , for example, include a n u m b e r of alternative technologies.

The idea of new technologies is fundamental t o t h i s approach since i t opens t h e way t o technological change in t h e s t r u c t u r e of t h e a r e a . (Data on all r e l e v a n t new technologies a r e included i n t h e p a r a m e t e r s e t discussed i n Sec- tion 2.)

Note t h a t t h e version of t h e model implemented describes all possible modes of production, including alternative r a n g e s of products made a t a given installation, recycling of semiproducts, a n d coupled production of a n u m b e r of chemicals a t o n e plant.

This model provides u s with a basis for formulating decision problems c o n c e r n e d with t h e generation of efficient development alternatives for a PDA. I t is obviously necessary to add a s e t of c r i t e r i a a n d some additional con- s t r a i n t s reflecting t h e preferences or goals of t h e decision maker a s well a s physical l i m i t s on resource availability, a n d this generally leads t o t h e formu- lation of a multiobjective optimization problem.

4 THE CASE O F METHANOL

4 . 1 The Methanol Industry and its Future

In t h i s section we focus on a particular PDA - t h a t dealing with t h e pro- duction and distribution of methanol. We chose m e t h a n o l n o t only because of i t s i n d u s t r i a l i m p o r t a n c e

-

i t is m a n u f a c t u r e d i n g r e a t q u a n t i t i e s a n d used extensively i n t h e chemical a n d energy s e c t o r s - b u t also because d a t a o n t h e various production t.echnologies a r e relatively easy t o obtain. There a r e also good methodological reasons for choosing t h e methanol PDA: i t is a rela- tively simple s y s t e m whose behavior can easily be analyzed by conventional t e c h n i q u e s , thereby providing a m e a n s of testing and improving new m e t h o - dology. In f a c t , our mettiodology was developed precisely by studying simple s y s t e m s s u c h a s t h i s a n d t h e pesticides PIIA (Dobrowolski e t al. 1982). We begin with a brief o v e r v i t : ~ of t h e historical development of methanol produc- tion a n d c o n s u m p t i o n , a n d t h e n consider t h e prospects for t h e future.

World p:roduction of methanol h a s grown very rapidly over t h e l a s t 30 y e a r s or so (see Table 2). A crucial increase i n investmerit over t h e period 1967-1970 m a y be a t t r i b u t e d t o t h e introduction of a new low-pressure pro- cess, which is c h e a p e r , more efficient, and consequenlly more economically desirable t h a n t h e high-pressure process previously i n u s e . F u r t h e r improve- m e n t s in methanol production technology a r e still being sought.

A t p r e s e n t , t h e world produces about 10.5 million m e t r i c tons of m e t h a n o l p e r year, 3 million m e t r i c t o n s of i t in western Europe (Nowak 1982). Experts predict t h a t world production of m e t h a n o l will rise t o a b o u t

TABLE 2 Levels of m e t h a n o l production in various c o u n t r i e s .

Country Methanol production (lo3 t / y e a r )

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1950 1955 1960 1965 1970 1975 1980

IJSA 409

J a p a n

FRG 74

Italy 8

F r a n c e Soviet Union

GDR 38

Czechoslovakia 14

Poland 1

aData from 1978.

Source: Nowak (1982)

17.6 million m e t r i c tons in 1985, with only about 4 million m e t r i c tons of this coming from western Europe. This growth in global production is expected to result from new plants in t h e Soviet Union, Canada, and Mexico, i . e . , nations which are rich in t h e traditional raw material base - natural gas and crude oil. Western Europe, Japan, and even t h e USA will probably be n e t importers of methanol in t h e 1990s, with t h e r e s u l t t h a t methanol trade will assume much g r e a t e r importance.

TABLE 3 Levels of m e t h a n o l consumption i n various c o u n t r i e s a n d e c o n o m i c r e - gions, a n d i n t h e world a s a whole.

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Country o r Methanol consumptiona (lo3 t / y e a r ) economic

region 1950 1955 1960 1965 1970 1979 1985 1990

USA 236 510 804 1217 2108 3362

J a p a n 404 864

FRG 74 151 348 605 827

Italy 0 2 1 60 119 330

F r a n c e 17 31 74 114 231

Western Europe 3259 4345b 5 6 ~ 5 ~

World 609 1022 2064 3566 5700 13000 17000~ 23000~

aOnly traditional uses of methanol are considered b ~ o r e c a s t e d values.

Source: Nowak (1982).

The development of methanol consumption in a n u m b e r of different countries and in t h e world a s a whole is summarized in Table 3. The differences between t h e amounts of methanol produced a n d consumed (see Tables 2 and 3) also give a n indication of t h e volume of t r a d e The present s t r u c t u r e of methanol consumption i n western Europe is outlined i n Table 4, together with some forecasts of how this may change in t h e f u t u r e .

TABLE 4 S t r u c t u r e of m e t h a n o l d e m a n d i n western Europe.

End u s e s of m e t h a n o l 1979 lo9 t / y e a r % 7'raditional u s e s

Production of:

Formaldehyde 1590 48.8

Dimethyl t e r e p h t h a l a t e (DMT) 160 4.9 Methyl m e t h a c r y l a t e (MMA) 110 3.4

Methyl halides 110 3.4

Methyl a m i n e s 155 4.8

Miscellaneous 807 24.7

S u b t o t a l 2932 90.0

New u s e s Production of:

Methyl t e r t i a r y butyl e t h e r (MTBE) 70 2.2 180 4.1 240 4.2

MTBE blending c o m p o n e n t 30 0.9 75 1.7 100 1.8

Gasoline blending 200 6.1 200 4.6 200 3.6

Acetic acid 25 0.8 260 6.0 550 9.7

Single-cell protein (SCP) 2 0.1 160 3.7 550 9.8

Subtotal 327 10.0 875 20.1 1640 29.1

Total 3259 100.0 4345 100.0 5625 100.0

SOurce: Sherwin (1981).