ChE 487 (F-19)

Conceptual Process (with Product) Design

Chemical Feedstock and Product Pricing
and Estimation

Henry Y. Wang
Andrew Tadd
The University of Michigan
9/13/2019
 Outline
•  Current State and Future Outlook of the Global and
US Chemical Processing Industry
•  Impact of Shale Gas and Tight Oil in US Chemical
Industry
•  Overview of Product Quality and Specification
•  Standard Price Basis for 2018
•  Changing Feedstock Landscape for Chemical and
Energy Production (Mark Barteau, taped lecture)
•  In class assignment: Please identify your product
specification and the key raw materials and their long
term sourcing for your project assignment
Chemical Project Investments Seek A
Sustainable Advantage
Global population and increases in income
per person……..
ChE 487 Chemical Process Design Projects
A. Fuel and basic chemical production traditional oil
and gas feedstocks
B. Drop-in/on-demand chemical production from
traditional/alternative feedstocks
C. Waste recycle and reuses within existing
chemical production processes and/or between
different industries
D. Speicalty/consumer/food chemicals production
E. Cost effective GMP pharmaceutical
manufacturing to combat drug shortage
Each student team should define the overall goal and specific
objectives of your project assignment through discussion within
the team and with your industrial mentor
The (Petro)chemical Industry
Crude Oil as Refinery Feedstock
Sulfur Content of Crude Oils May be Different
Energy supply is boosted by unconventional
oil and gas ...
Natural gas will overtake oil to become North
America's 'single largest energy source' this
year
Oil will be toppled as North America's primary energy
source this year, according to risk management firm DNV
GL, with natural gas and electrification set to reshape the
region's energy future.
The Norway-headquartered firm said Monday
(9/10/2018) that overall energy demand in the U.S. and
Canada would continue to decline over the coming
months, as improving efficiencies in the transport sector
dramatically reduce North America's reliance on oil.
https://www.cnbc.com/2018/09/10/oil-could-be-toppled-as-north-americas-largest-energy-
source-this-year-dnv-gl-ceo-says.html
A. Conversion of NG for Gasoline Production
US gasoline supply for the East Coast has recently been tightened
significantly due to the permanent shutdown of a large, old
Philadelphia refinery that has been put out of commission due a fire
and explosion. Michichem has been contracted by an investment
group to conduct a feasibility study of using shale gas from nearby
Marcellus wells as potential feedstock to produce gasoline and other
products using the Gas to Liquid (GTL) technology. For this study,
your team has been tasked to evaluate the financial feasibility of a
Gas to Liquids plant that produces 2MM gallons of gasoline per day
(plus the other typical product streams from such a plant) to replace
part of the capacity lost with the closure of the old refinery.  The
investment group also wants to better understand the most significant
risks associated with this project. (Business Champion: John Palmer)
http://www.gasprocessingnews.com/features/201606/evaluate-gtl-processes-compared-
with-conventional-refining.aspx
https://en.wikipedia.org/wiki/Gas_to_liquids
US Regular Gasoline Prices ($/gal.)
Standard Price Basis for 2018
Prices are calculated following procedure D-PCS-02 "Forecasting Standard Prices"

Crude Oil s.g. Units Units NG / LNG / MeOH Units USGC NWE ME NEA
Dated Brent 0.835 $/BBL 66.9 $/MT 504 Natural Gas (HHV) $/MMBTU 3.13 5.39 3.00
Louisiana Light Sweet (LLS), St. James 0.835 $/BBL 69.6 $/MT 524 Natural Gas LNG $/MMBTU 11.54
West Texas Intermediate (WTI) Spot, Cushing 0.828 $/BBL 66.4 $/MT 505 LNG (Liquefaction Cost) $/MMBTU 3.25 1.15 5
Mars, FOB Clovelly 0.885 $/BBL 59.2 $/MT 421 Methanol $/MT 309.5 319.4 337.5
Maya, FOB 0.927 $/BBL 53.1 $/MT 360 Methanol (Fuel Value) $/MT 67
Alaska North Slope (ANS), USWC 0.866 $/BBL 63.5 $/MT 462
Western Canadian Select (WCS), Hardisty 0.932 $/BBL 45.5 $/MT 307 Coal for Electric Power, Delivered $/Sh Ton 43.1
Arab Light (Med FOB - Sidi Kerir) 0.862 $/BBL 62.5 $/MT 456 Coal for Electric Power, Delivered (HHV) $/MMBTU 2.2
Iran Heavy (Med FOB - Sidi Kerir) 0.879 $/BBL 60.1 $/MT 430 Fuel Grade Petroleum Coke $/Sh Ton 42.4
Iran Light (Med FOB - Sidi Kerir) 0.858 $/BBL 63.1 $/MT 462 Fuel Grade Petroleum Coke (HHV) $/MMBTU 1.6
Bonny Light 0.852 $/BBL 71.7 $/MT 529
Urals (NWE CIF) 0.865 $/BBL 62.7 $/MT 456 Light Olefins Units USGC NWE NEA
Bakken, Clearbrook (1) 0.818 $/BBL 69.3 $/MT 533 Ethylene $/MT 1,008 1,177 1,098
Propylene-Polymer Grade $/MT 1,299 1,133 1,189
Propylene-Refinery Grade $/MT 1,012
NGLs & MTBE USGC USGC NWE ME NEA SING HDPE $/MT 1,890 1,643 1,253
Units s.g. $/MT $/BBL $/MT $/MT $/MT $/MT LDPE $/MT 1,952 1,669 1,302
Ethane 0.356 285.2 16.2 LLDPE $/MT 1,837 1,619 1,269
Ethane (Fuel Value) 0.356 Polypropylene $/MT 1,998 1,694 1,344
Propane 0.508 431.3 34.8 508.30 521.2 567.01 Crude C4's (Cracker) $/MT
Isobutane 0.563 493.2 44.2 Butadiene $/MT 1,193
Normal Butane 0.584 472.6 43.9 Raffinate-1 $/MT 630
Butanes 0.570 531.85 546.3 592.28 PyGas (Pyrolysis Gasoline) $/MT 213 647 660
MTBE 806.49 797.49 775.53
Aromatics and Derivatives Units USGC NWE NEA SING
Fuel Products Region Units Units Benzene $/MT 927 911
Natural Gasoline 0.66 USGC 59.3 $/BBL 562.3 $/MT Toluene $/MT 789
Premium Unleaded Gasoline 0.75 USGC 89.7 $/BBL 752.1 $/MT Toluene (octane blend value) $/MT 771 722
Mid-grade Unleaded Gasoline 0.75 USGC 85.3 $/BBL 715.1 $/MT p-Xylene $/MT 979
Regular Unleaded Gasoline 0.75 USGC 82.3 $/BBL 690.5 $/MT o-Xylene $/MT 917
Jet/Kerosene 0.786 USGC 87.1 $/BBL 697.2 $/MT Mixed Xylenes $/MT 830 784
Diesel/No. 2 Fuel Oil 0.844 USGC 79.7 $/BBL 594.1 $/MT Terephthalic Acid $/MT 776
0.05% S Diesel 0.844 USGC 88.7 $/BBL 660.7 $/MT PET resin $/MT 1,071
Ultra - Low Sulfur (15 ppm) Diesel 0.844 USGC 89.9 $/BBL 670.3 $/MT Styrene $/MT 1,230
1% Sulfur Residual Fuel Oil ($/Bbl.) 0.968 USGC 56.9 $/BBL 369.4 $/MT Sulfolane raffinate $/MT 641
3% Sulfur Residual Fuel Oil ($/Bbl.) 0.983 USGC 34.7 $/BBL 222.0 $/MT Heavy Aromatics $/MT 649
ULS Kerosene 0.786 USGC 87.3 $/BBL 698.5 $/MT Cumene $/MT 1,056
Full Range Naphtha 0.747 USGC 67.9 $/BBL 572.1 $/MT Phenol $/MT 1,123
Heavy Naphtha 0.7914 USGC 69.6 $/BBL 553.2 $/MT Acetone $/MT 918
Low Sulfur VGO (0.5 wt% S) 0.915 USGC 85.7 $/BBL 588.8 $/MT
Medium Sulfur VGO (1.0 wt% S) 0.92 USGC 82.5 $/BBL 563.7 $/MT Detergents Units USGC NWE NEA SING
High Sulfur VGO (2.0 wt% S) 0.925 USGC 79.3 $/BBL 538.9 $/MT n-paraffin $/MT 993
Linear alkylbenzene $/MT 1443

Naphtha 0.680 NWE 62.1 $/BBL 574.3 $/MT Utilities & H2 Units USGC NWE ME NEA SING
Premium Unleaded Gasoline (2) 0.75 NWE 78.3 $/BBL 656.4 $/MT Electricity $/kWh 0.05 0.08 0.05 0.07 0.08
Jet / Kerosene (3) 0.786 NWE 86.5 $/BBL 691.9 $/MT Subsidized Electricity* $/kWh 0.04 0.04
Diesel EN590 (4) 0.844 NWE 89.6 $/BBL 667.4 $/MT HP Steam $/1000 lb 5.44 10.31 5.22 9.31 9.81
Gasoil (5) 0.844 NWE 87.4 $/BBL 651.0 $/MT MP Steam $/1000 lb 4.52 8.53 4.32 7.71 8.12
Heavy Fuel Oil 1.0% S 0.968 NWE 52.8 $/BBL 343.0 $/MT LP Steam $/1000 lb 4.00 7.58 3.84 6.85 7.22
Heavy Fuel Oil 3.5% S 0.983 NWE 29.5 $/BBL 188.6 $/MT BFW $/1000 lb 0.70 1.30 0.66 1.18 1.24
Condensate $/1000 lb 0.49 0.95 0.48 0.85 0.90
Cooling Water $/1000 gal 0.05 0.08 0.05 0.07 0.07
Naphtha 0.680 SING 65.0 $/BBL 601.0 $/MT Fuel Gas (LHV) $/MMBTU 3.48 3.33
95 RON Gasoline 0.75 SING 81.0 $/BBL 678.9 $/MT Fuel Oil (LHV) $/MMBTU 6.58 5.95 6.26
92 RON Gasoline 0.75 SING 77.8 $/BBL 652.6 $/MT
97 RON Gasoline 0.75 SING 83.4 $/BBL 699.4 $/MT 99.999% H2 (paid off SMR) $/MSCF 1.41 2.62 1.15 2.19 2.30
Jet/kerosene 0.786 SING 86.8 $/BBL 694.4 $/MT 99.999% H2 (new SMR) $/MSCF 2.05 3.27 1.80 2.84 2.95
10 ppm diesel 0.844 SING 89.0 $/BBL 663.3 $/MT
50 ppm diesel 0.844 SING 88.6 $/BBL 660.6 $/MT Utilities & H2 Units USGC NWE ME NEA SING
500 ppm diesel 0.844 SING 87.3 $/BBL 650.4 $/MT Electricity $/kWh 0.05 0.08 0.05 0.07 0.08
Low Sulfur Waxy Residue (LSWR) 0.968 SING 65.7 $/BBL 427.0 $/MT Subsidized Electricity* $/kWh 0.04 0.04
3.5% S fuel oil, 180 cSt 0.983 SING 39.9 $/BBL 255.2 $/MT HP Steam $/MT 11.99 22.72 11.50 20.53 21.62
3.5% S fuel oil, 380 cSt 0.983 SING 37.2 $/BBL 238.1 $/MT MP Steam, $/MT $/MT 9.96 18.81 9.52 16.99 17.90
LP Steam, $/MT $/MT 8.81 16.72 8.46 15.10 15.91
BFW, $/MT $/MT 1.53 2.88 1.46 2.60 2.74
Naphtha 0.680 NEA 64.7 $/BBL 598.7 $/MT Condensate, $/MT $/MT 1.07 2.08 1.05 1.88 1.98
Unleaded Regular Gasoline 0.75 NEA 81.5 $/BBL 683.8 $/MT Cooling Water, $/1000m3 $/1000m3 14.17 19.82 13.93 18.67 19.24
Kerosene 0.786 NEA 87.8 $/BBL 703.0 $/MT Fuel Gas (LHV), $/GJ $/GJ 3.29 3.16
10 ppm S Gas Oil 0.844 NEA 92.5 $/BBL 689.3 $/MT Fuel Oil (LHV), $/GJ $/GJ 6.24 5.64 5.94
3.5% Fuel Oil, IFO 180 0.983 NEA 41.9 $/BBL 268.2 $/MT
99.999% H2 (paid off SMR) $/MT 584 1088 478 908 954
99.999% H2 (new SMR) $/MT 851 1355 745 1175 1221
Naphtha 0.68 ME 61.6 $/BBL 569.6 $/MT * 50% of Fuel Equivalent price
Unl. Gasoline - 95 RON 0.75 ME 81.3 $/BBL 681.5 $/MT
Kerosene 0.786 ME 84.4 $/BBL 675.7 $/MT
500 ppm S Gas Oil 0.844 ME 85.2 $/BBL 634.8 $/MT
3.5% Fuel Oil, IFO 180 0.983 ME 37.9 $/BBL 242.3 $/MT

(Honeywell, 2018)
 Base (Bulk) chemicals (Area B)
•  The technologies for the production of basic chemicals
and intermediates are well established.
•  Development activities usually result in minor process
improvements (example a new catalyst or a more energy
efficient furnace).
•  Still can have a large impact on overall costs due to the
large volumes involved (example, saving dollars per ton
of acetic acid can have a large impact when you produce
500,000 t/a).
•  Major new advances in processes are still worth pursuing
if new feedstocks like shale gas are available.
•  More general drive is Sustainability and Process
Intensification.
 U.S. Chemical Industry Global Cost
Advantage

http://www.americanchemistry.com/Policy/Energy/Shale-Gas/Slides-Shale-Gas-and-New-US-Chemical-
Industry-Investment138-Billion-and-Counting.pdf
Petrochemicals are the other key driver
of oil demand
 Transitioning the Product Mix from
Traditional Fuels to Chemicals

Crude-to-chemicals run plan

https://www.hydrocarbonprocessing.com/magazine/2018/december-2018/columns/viewpoint-the-
opportunity-for-greater-growth-and-value-considerations-for-crude-to-chemicals-projects
Shift towards lighter feedstock has led to renewed
focus on several on-purpose and alternative
technologies for C3, C4 and BTX (Area B)
 GHG Emissions from various industries &
sectors
GHG emissions associated with industry (including energy utilization) represent about
21% of world GHG emissions.
GHG Emissions from various industries GHG Emissions associated with
Industry
CO2 and non
Petroleum, CO2
Petrochemica Emissions
ls & from
Chemicals industrial
Others 23% processes
44% 16%

Direct Fossil
Cement Fuel
18% Indirect CO 2 Consumption
Emissions 49%
from
Iron & Steel electricity &
15% heat
consumption
35%

The Oil & Gas and Chemical industries are among the major emitters of GHGs.

Source: CAIT, IEA, 2004a, Hendriks

Carbon emissions are rising too fast for
comfort
 Carbon Emissions

http://www.cnbc.com/2017/05/31/how-us-carbon-pollution-compares-with-the-rest-of-the-world.html
 What is the Paris agreement?
The Paris Agreement is a deal reached between 195 countries to
gradually reduce emissions that cause climate change in order to
prevent a major increase in the global temperatures that could raise
sea levels, spark major droughts, and lead to more dangerous storms.
The agreement, which was negotiated in 2015 and took effect in
November 2016, was spurred by the overwhelming global scientific
consensus that rising global temperatures over the last several
decades are caused by man-made activity.
Climate change is already impacting the planet, but the specific
goal of the Paris Agreement is to prevent the planet from warming
by more than 2 degrees Celsius (3.6 degrees Fahrenheit), which
scientists warn could have especially damaging consequences.
http://www.cnbc.com/2017/06/01/heres-what-happens-if-trump-leaves-the-paris-climate-
agreement.html
The falling cost of renewables
B. Design of Wind Powered Hydrogen Production
Processes for Reducing Carbon Emissions
Hydrogen is a promising versatile energy carrier that can be compressed, stored,
and transported for use in hydrogen fuel cells. Hydrogen fuel cells have the capability
for long-range transportation and dispatchable electricity generation with no
greenhouse gas emissions, filling essential gaps in the implementation of clean energy.
In addition to energy applications, hydrogen is also necessary in numerous industrial
applications and chemical reactions. Natural gas reforming is the conventional method
for generating hydrogen, which produces large quantities of carbon dioxide. In place
of natural gas reforming, electrolysis produces hydrogen from water using renewable
electricity. Therefore, optimizing the design of a process which utilizes wind turbines,
the most environmentally benign renewable energy source, to power electrolyzers for
hydrogen generation can significantly facilitate the phasing out of traditional natural
gas reforming and the societal transition to the hydrogen economy. Ultimately, to
mitigate society’s dependence on fossil fuels and the environmental repercussions
thereof. Many barriers hinder the economical competitiveness such a process, so the
rational design to overcome these barriers is required for practical application.
(Project Advocate: Alex King)
https://www-sciencedirect-com.proxy.lib.umich.edu/science/article/pii/S0360319916300209
https://www.nrel.gov/hydrogen/wind-to-hydrogen.html
 The Value Chain of Modern Economy
Raw Materials (Area C)

Process Industry:
Chemical, biochemical, and physical
transforma9on and formula9on of raw materials
using con9nuous and batch processes into
Materials with new proper9es and func9onali9es

Discrete Manufacturing:

*Reduce feedstock: enhance

the availability and quality of
existing resources Components
& Products
*Reduce emissions

*Reduce energy and water:
integrated use, new materials
*Reduce, prevent waste
(www.spire2030.eu)
Categorization of Plastics
 Specialty/Consumer Products (Area D)
•  In Specialty Chemicals, drive is toward modified or new
products.
•  Motivated by market demands rather than cost savings
•  Some market demands can include new products, product
quality and safety as well as environmental concerns.
•  Some examples are environmentally friendly paints, varied
detergents, wood composites used in building materials, new
drugs, etc.
•  More effort is required in determining the chemical route of
manufacturing, e.g. when a new drug is approved the
manufacturing route must also be validated and approved.
•  In many cases, the process dictates the product quality.
 Consumer expenditure on FDA regulated
products: 20 cents of every dollar

http://blogs.fda.gov/fdavoice/index.php/2016/11/consumer-expenditure-on-fda-regulated-
products-20-cents-of-every-dollar/
C. Recombinant Soy Hemoglobin Production for
the Plant Based Meat Market

The high rate of beef consumption has been shown to be one of the main
causes of food born greenhouse emissions, as well as increases in land and
water uses in US. Several new companies like Beyond Meat and Impossible
Foods have successfully launched several plant based burger market in US and
plan to expand globally. One key ingredient of many of these plant based
burgers is soy hemoglobin to impact a meat-like flavor to these food products.
One research laboratory at The University of Michigan has successfully
cloned the soy hemoglobin gene into Saccharomyces cerevisae, the food yeast.
Michichem Food Division has been asked to develop and scale up a production
process to produce the soy hemoglobin for the current and future plant based
burger markets globally. Your task is to design a process and scale this process
to meet an appropriate fraction of this market, and any regulatory requirements
associated with various food applications. (note: food applications are more
stringent than industrial applications)
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0189029
https://www.ncbi.nlm.nih.gov/pubmed/29642729
 Generally Recognized As Safe (GRAS)
General recognition of safety based upon scientific
procedures calls for the same quantity and quality of scientific
evidence as would be required to obtain a food additive regulation
for a substance by the US FDA.
• Manufacturer informs US FDA of GRAS action without the need for
rulemaking (additional info available at: http://www.fda.gov/Food/
FoodIngredientsPackaging/Gener allyRecognizedasSafeGRAS/default.htm)
• More Timely and Less Burdensome
• Manufacturers who notify can show customers US FDA’s no
objection letter.
• The US FDA has GRAS Notice Inventory of substances that have undergone a
notification since 1998; available at:
http://www.accessdata.fda.gov/scripts/fcn/fcnNavigation.cfm?rpt=grasListing
• Also, some GRAS substances are listed in the CFR in Part 184 (see http://
www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfCFR/CFRSe arch.cfm?
CFRPart=184&showFR=1&subpartNode=21:3.0.1.1.14.2)
Product Specification: Vitamin C
(Ascorbic Acid). C6H8O6, (MW 176.13)

Specifications: USP – Pharmaceutical, E300 - Food

 Identifying Pricing constraints

–  Demand for the Product Class, Product, and

Brand
–  Newness of the Product: Stage in the Product
Life Cycle
–  Single Product versus a Product Line
–  Cost of Producing and Marketing the Product
–  Cost of Changing Prices & Time Period that
They Apply
–  Types of Competitive Markets - Competitors’
Prices
 Steps in setting consumer product price

Identify objectives & constraints

Estimate demand & revenue

Determine cost, volume and profit

Set an approximate price level

Set List or Quoted price

Make adjustments to list price

Top 10 US Drug Products (2012 vs 2018E)
(Area E)
Standard Price Basis for 2018
Prices are calculated following procedure D-PCS-02 "Forecasting Standard Prices"

Crude Oil s.g. Units Units NG / LNG / MeOH Units USGC NWE ME NEA
Dated Brent 0.835 $/BBL 66.9 $/MT 504 Natural Gas (HHV) $/MMBTU 3.13 5.39 3.00
Louisiana Light Sweet (LLS), St. James 0.835 $/BBL 69.6 $/MT 524 Natural Gas LNG $/MMBTU 11.54
West Texas Intermediate (WTI) Spot, Cushing 0.828 $/BBL 66.4 $/MT 505 LNG (Liquefaction Cost) $/MMBTU 3.25 1.15 5
Mars, FOB Clovelly 0.885 $/BBL 59.2 $/MT 421 Methanol $/MT 309.5 319.4 337.5
Maya, FOB 0.927 $/BBL 53.1 $/MT 360 Methanol (Fuel Value) $/MT 67
Alaska North Slope (ANS), USWC 0.866 $/BBL 63.5 $/MT 462
Western Canadian Select (WCS), Hardisty 0.932 $/BBL 45.5 $/MT 307 Coal for Electric Power, Delivered $/Sh Ton 43.1
Arab Light (Med FOB - Sidi Kerir) 0.862 $/BBL 62.5 $/MT 456 Coal for Electric Power, Delivered (HHV) $/MMBTU 2.2
Iran Heavy (Med FOB - Sidi Kerir) 0.879 $/BBL 60.1 $/MT 430 Fuel Grade Petroleum Coke $/Sh Ton 42.4
Iran Light (Med FOB - Sidi Kerir) 0.858 $/BBL 63.1 $/MT 462 Fuel Grade Petroleum Coke (HHV) $/MMBTU 1.6
Bonny Light 0.852 $/BBL 71.7 $/MT 529
Urals (NWE CIF) 0.865 $/BBL 62.7 $/MT 456 Light Olefins Units USGC NWE NEA
Bakken, Clearbrook (1) 0.818 $/BBL 69.3 $/MT 533 Ethylene $/MT 1,008 1,177 1,098
Propylene-Polymer Grade $/MT 1,299 1,133 1,189
Propylene-Refinery Grade $/MT 1,012
NGLs & MTBE USGC USGC NWE ME NEA SING HDPE $/MT 1,890 1,643 1,253
Units s.g. $/MT $/BBL $/MT $/MT $/MT $/MT LDPE $/MT 1,952 1,669 1,302
Ethane 0.356 285.2 16.2 LLDPE $/MT 1,837 1,619 1,269
Ethane (Fuel Value) 0.356 Polypropylene $/MT 1,998 1,694 1,344
Propane 0.508 431.3 34.8 508.30 521.2 567.01 Crude C4's (Cracker) $/MT
Isobutane 0.563 493.2 44.2 Butadiene $/MT 1,193
Normal Butane 0.584 472.6 43.9 Raffinate-1 $/MT 630
Butanes 0.570 531.85 546.3 592.28 PyGas (Pyrolysis Gasoline) $/MT 213 647 660
MTBE 806.49 797.49 775.53
Aromatics and Derivatives Units USGC NWE NEA SING
Fuel Products Region Units Units Benzene $/MT 927 911
Natural Gasoline 0.66 USGC 59.3 $/BBL 562.3 $/MT Toluene $/MT 789
Premium Unleaded Gasoline 0.75 USGC 89.7 $/BBL 752.1 $/MT Toluene (octane blend value) $/MT 771 722
Mid-grade Unleaded Gasoline 0.75 USGC 85.3 $/BBL 715.1 $/MT p-Xylene $/MT 979
Regular Unleaded Gasoline 0.75 USGC 82.3 $/BBL 690.5 $/MT o-Xylene $/MT 917
Jet/Kerosene 0.786 USGC 87.1 $/BBL 697.2 $/MT Mixed Xylenes $/MT 830 784
Diesel/No. 2 Fuel Oil 0.844 USGC 79.7 $/BBL 594.1 $/MT Terephthalic Acid $/MT 776
0.05% S Diesel 0.844 USGC 88.7 $/BBL 660.7 $/MT PET resin $/MT 1,071
Ultra - Low Sulfur (15 ppm) Diesel 0.844 USGC 89.9 $/BBL 670.3 $/MT Styrene $/MT 1,230
1% Sulfur Residual Fuel Oil ($/Bbl.) 0.968 USGC 56.9 $/BBL 369.4 $/MT Sulfolane raffinate $/MT 641
3% Sulfur Residual Fuel Oil ($/Bbl.) 0.983 USGC 34.7 $/BBL 222.0 $/MT Heavy Aromatics $/MT 649
ULS Kerosene 0.786 USGC 87.3 $/BBL 698.5 $/MT Cumene $/MT 1,056
Full Range Naphtha 0.747 USGC 67.9 $/BBL 572.1 $/MT Phenol $/MT 1,123
Heavy Naphtha 0.7914 USGC 69.6 $/BBL 553.2 $/MT Acetone $/MT 918
Low Sulfur VGO (0.5 wt% S) 0.915 USGC 85.7 $/BBL 588.8 $/MT
Medium Sulfur VGO (1.0 wt% S) 0.92 USGC 82.5 $/BBL 563.7 $/MT Detergents Units USGC NWE NEA SING
High Sulfur VGO (2.0 wt% S) 0.925 USGC 79.3 $/BBL 538.9 $/MT n-paraffin $/MT 993
Linear alkylbenzene $/MT 1443

Naphtha 0.680 NWE 62.1 $/BBL 574.3 $/MT Utilities & H2 Units USGC NWE ME NEA SING
Premium Unleaded Gasoline (2) 0.75 NWE 78.3 $/BBL 656.4 $/MT Electricity $/kWh 0.05 0.08 0.05 0.07 0.08
Jet / Kerosene (3) 0.786 NWE 86.5 $/BBL 691.9 $/MT Subsidized Electricity* $/kWh 0.04 0.04
Diesel EN590 (4) 0.844 NWE 89.6 $/BBL 667.4 $/MT HP Steam $/1000 lb 5.44 10.31 5.22 9.31 9.81
Gasoil (5) 0.844 NWE 87.4 $/BBL 651.0 $/MT MP Steam $/1000 lb 4.52 8.53 4.32 7.71 8.12
Heavy Fuel Oil 1.0% S 0.968 NWE 52.8 $/BBL 343.0 $/MT LP Steam $/1000 lb 4.00 7.58 3.84 6.85 7.22
Heavy Fuel Oil 3.5% S 0.983 NWE 29.5 $/BBL 188.6 $/MT BFW $/1000 lb 0.70 1.30 0.66 1.18 1.24
Condensate $/1000 lb 0.49 0.95 0.48 0.85 0.90
Cooling Water $/1000 gal 0.05 0.08 0.05 0.07 0.07
Naphtha 0.680 SING 65.0 $/BBL 601.0 $/MT Fuel Gas (LHV) $/MMBTU 3.48 3.33
95 RON Gasoline 0.75 SING 81.0 $/BBL 678.9 $/MT Fuel Oil (LHV) $/MMBTU 6.58 5.95 6.26
92 RON Gasoline 0.75 SING 77.8 $/BBL 652.6 $/MT
97 RON Gasoline 0.75 SING 83.4 $/BBL 699.4 $/MT 99.999% H2 (paid off SMR) $/MSCF 1.41 2.62 1.15 2.19 2.30
Jet/kerosene 0.786 SING 86.8 $/BBL 694.4 $/MT 99.999% H2 (new SMR) $/MSCF 2.05 3.27 1.80 2.84 2.95
10 ppm diesel 0.844 SING 89.0 $/BBL 663.3 $/MT
50 ppm diesel 0.844 SING 88.6 $/BBL 660.6 $/MT Utilities & H2 Units USGC NWE ME NEA SING
500 ppm diesel 0.844 SING 87.3 $/BBL 650.4 $/MT Electricity $/kWh 0.05 0.08 0.05 0.07 0.08
Low Sulfur Waxy Residue (LSWR) 0.968 SING 65.7 $/BBL 427.0 $/MT Subsidized Electricity* $/kWh 0.04 0.04
3.5% S fuel oil, 180 cSt 0.983 SING 39.9 $/BBL 255.2 $/MT HP Steam $/MT 11.99 22.72 11.50 20.53 21.62
3.5% S fuel oil, 380 cSt 0.983 SING 37.2 $/BBL 238.1 $/MT MP Steam, $/MT $/MT 9.96 18.81 9.52 16.99 17.90
LP Steam, $/MT $/MT 8.81 16.72 8.46 15.10 15.91
BFW, $/MT $/MT 1.53 2.88 1.46 2.60 2.74
Naphtha 0.680 NEA 64.7 $/BBL 598.7 $/MT Condensate, $/MT $/MT 1.07 2.08 1.05 1.88 1.98
Unleaded Regular Gasoline 0.75 NEA 81.5 $/BBL 683.8 $/MT Cooling Water, $/1000m3 $/1000m3 14.17 19.82 13.93 18.67 19.24
Kerosene 0.786 NEA 87.8 $/BBL 703.0 $/MT Fuel Gas (LHV), $/GJ $/GJ 3.29 3.16
10 ppm S Gas Oil 0.844 NEA 92.5 $/BBL 689.3 $/MT Fuel Oil (LHV), $/GJ $/GJ 6.24 5.64 5.94
3.5% Fuel Oil, IFO 180 0.983 NEA 41.9 $/BBL 268.2 $/MT
99.999% H2 (paid off SMR) $/MT 584 1088 478 908 954
99.999% H2 (new SMR) $/MT 851 1355 745 1175 1221
Naphtha 0.68 ME 61.6 $/BBL 569.6 $/MT * 50% of Fuel Equivalent price
Unl. Gasoline - 95 RON 0.75 ME 81.3 $/BBL 681.5 $/MT
Kerosene 0.786 ME 84.4 $/BBL 675.7 $/MT
500 ppm S Gas Oil 0.844 ME 85.2 $/BBL 634.8 $/MT
3.5% Fuel Oil, IFO 180 0.983 ME 37.9 $/BBL 242.3 $/MT

(Honeywell, 2018)
 Indicative Chemical Prices A-Z
This broad list of chemical prices is taken from the 28 August
2006 issue of Chemical Market Reporter (now rebranded and
incorporated into ICIS Chemical Business). The list consists of static
price indications from that issue. Products marked with an asterisk
(*) have been updated to give indicative prices for 2008; those
marked + were updated to give indicative prices for 2007.

http://www.icis.com/chemicals/channel-info-chemicals-a-z/
Some Sources for Chemical Pricing and
Market Data
•  http://guides.library.tamu.edu/content.php?
pid=216817&sid=1802700 (TAMU)
•  http://guides.lib.berkeley.edu/c.php?
g=4408&p=15601 (UC Berkeley)
•  http://guides.library.cornell.edu/c.php?
g=30870&p=198498 (Cornell)
•  http://libraryguides.missouri.edu/chemicalprices
(Missouri)
•  http://people.clarkson.edu/~wwilcox/Design/
refcosts.htm (Clarkson)
 Comments on Search for Chemical Pricing
•  There is no single, authoritative source of prices for bulk chemicals.
The highest quality market analyses are compiled for industry
subscribers and tend to be quite expensive, and are not available to an
educational audience. Several trade publications offer subscription-
based pricing products to individuals and companies. Otherwise,
students must gather pricing information piecemeal from various
publications and web searches. Some points to remember:
•  Some prices are volatile and change daily; others may be quite stable
over long periods of time. For estimation purposes you should
consider trends over a period of time.
•  Prices for a commodity differ according to manufacturer, location,
quantity, grade, delivery mode, time of year, and other variables.
Long term contract prices are often lower than spot prices.
•  In some cases a direct quote from a supplier will be the only
source of price information.
•  Do not use research-quantity prices for plant estimation purposes.
Changing Feedstock Landscape for
Chemical and Energy Production
Mark A. Barteau

Director, University of Michigan Energy Institute

DTE Energy Professor of Advanced Energy Research
Department of Chemical Engineering
Department of Chemistry
barteau@umich.edu

www.energy.umich.edu
 March 2016

Presentations available at http://dels.nas.edu/Workshop-Summary/Changing-Landscape-

Hydrocarbon-Feedstocks/23555#
 A few basics

• Chemical feedstocks are a “byproduct” of the energy/fuels

industry

• Both chemical and energy industries are capital intensive

• Facilities and processes have long lifetimes (decades)

• These tend to work against abrupt change

4
 Outline

1. What are the relevant time scales in the energy and chemical industries?

2. What hath the US “Shale Gale” wrought?

3. Where are the opportunities for greening the chemical industry?

4. What about biomass?

US Energy: Primary Sources
US Energy: Primary Sources

Roadmap for the Chemical Industry?

8
9
US Chemical Industry is Returning to
Health

Unhealthy

Healthy

IHS Global Insight, “The Economic and Employment Contributions of Shale Gas in the US”, prepared for America’s Natural Gas Alliance, December 2011.

10
 Important consequences of the US “Shale Gale”

• Energy (heat and power): Natural gas displacing coal (oil trivial)

• Chemical industry: US industry based on natural gas enjoying big

advantages over international competitors tied to oil

o US (and Middle East) chemical industry feedstocks dominated by

light hydrocarbons from NG
o Rest of the world uses naphtha from petroleum

• What opportunities does this create for the (US) industry?

• What opportunities are there to reduce energy consumption and

emissions in the chemical industry with these or other feedstocks?
13
14
15
16
What’s Gone Away?

C5

C4

17
Butadiene Price Inflation
1.25 Butadiene Price $/lb, CMAI

1.10

0.95
>500% Increase
0.80

0.65

0.50

0.35

0.20
2001 2003 2005 2007 2009 2011

18
Shale Gas Creates Opportunities for New
Chemistry
Catalysis:
Selective high yield conversion “on purpose”
Propylene – smallest need
C4+
C5 (Cyclopentadiene)
Aromatics
Heteroatoms etc.

Direct conversion of methane to chemicals

Separations
Membranes
Materials – MOF’s, Molecular Sieves

19
Desired
CH3OH
C2+ hydrocarbons

20
2013
22
 Hydrogenation

Cracking

Oxidation C+C bond formation

 Hydrogenation

Cracking

Heat of reaction

Oxidation C+C bond formation

75% of GHG emissions by the chemical industry are from these 18 products
 CO2 from hydrogen generation

CO2 from hydrogen generation

Estimates of GHG footprint of H2 production from NREL report TP-570-27637

Significant Opportunities for Energy & GHG Reduction from
Chemical Processes

Emerging Technologies
1. Olefin production via catalytic cracking could deliver energy savings of 10-20%
(or more for replacement of older cracking units.)
2. Hydrogen Peroxide Propylene Oxide (HPPO) process could reduce energy
consumption of the overall process chain by 10-12%.

Game Changers
1. Use of hydrogen from renewable energy sources to produce ammonia and
methanol
2. Use of biomass as a feedstock

Source: IEA/ICCA/DECHEMA Technology Roadmap (2013)

Source: International Energy Agency
Land requirements for different energy sources

http://news.cnet.com/8301-11128_3-20006361-54.html
36
38
39
 August 2004

http://ascension-publishing.com/BIZ/HD49.pdf
 Red Hot
Red Hot
Red Hot
Warm
Red Hot
Cold
Warm
Cold
Cold
Warm
Cold
Cold

http://www.biofuelsdigest.com/bdigest/2015/04/30/the-does-12-top-biobased-molecules-
what-became-of-them/
 Summary
What are the relevant time scales in the energy and chemical industries?
It depends…

What hath the US “Shale Gale” wrought?

Dramatic advantages for and new investment in the US Chemical Industry
Opportunities for “on purpose” production of C4 and C5 olefins and diolefins

Where are the opportunities for greening the chemical industry?

Carbon-free hydrogen at large scale
Process improvement and optimization driven by a price on carbon

What about biomass?

Not for fuels and commodity chemicals
Opportunities for specialty chemicals for which market already exists