Chemistry & Life Sciences

More Energy, Less Carbon Dioxide: Interview with Sven Royall, Shell Chemicals Vice President Global Intermediates

Chemical Industry Response to Carbon and Feedstock Constraints

15.12.2009 -

Environmental Issues - By 2050, our world will require double the energy we use today. At the same time greenhouse gas emissions need to be brought down to prevent catastrophic climate change. CHEManager Europe talked to Sven Royall, Shell Chemicals Vice President Global Intermediates, about the chemical industry's challenge to extend its feedstock range and further reduce CO2 output.

CHEManager Europe: At the Handelsblatt Chemistry 2009 Conference in Düsseldorf you noted that the industry will need to access and develop a wider range of energy resources and feedstocks to enhance energy efficiency and cut greenhouse gas emissions. What alternative energy resources are you referring to?

S. Royall: The industry is likely to face significant challenges in accessing traditional sources of feedstock, as conventional oil and gas stocks are predicted to decline from 2015 onwards. This means we'll need to access oil and gas reserves that are harder to reach and more expensive to exploit and will also need more coal and nuclear energy.
For the chemical industry this means we have to develop a wider range of feedstock and energy resources. Wind, solar, wave, hydrogen, biofuel and bio-feedstock will play an increasing role in the global energy mix. It's a mixture of all kind of resources, even if forecasts suggest fossil fuels will still account for up to 70 % of global energy consumption by 2050.


You said focusing on the development of new technologies is key to meeting carbon constraint challenges. Can you give examples of new technologies you have in mind?

S. Royall: The chemicals sector has been heavily reliant on oil and gas for feedstock and energy and for base chemicals. The response to the energy challenge will determine the future shape of our industry. One of these responses is coal gasification. Shell has been at the forefront of its development, and we have already licensed our process to several projects to produce syngas for transport fuel. Coal gasification is a very clean technology. However, it generates significant CO2, therefore it will need to have associated carbon capture and storage (CCS) technology if global CO2 emissions are to be reduced.
The industry needs to develop process technology designed to shorten the coal-to-chemicals route, which traditionally sees methanol transformed to syngas and then to ammonia, olefins, aromatics and other intermediates. New methanol-to-olefins technologies can shorten this route and may offer potential cost advantages.
A promising way lies in developing routes from the refinery by-product petroleum coke - or pet-coke - to chemicals. These technologies will be associated with coal-to-chemicals processes. Shell has also pioneered gas-to-liquids (GTL) technology for over 30 years, and we now develop the world's largest GTL plant in Qatar. While GTL will help unlock the potential of the world's gas reserves, primarily for transport fuels, the core process offers many potential routes - via synthesis gas processing - to chemicals ranging from solvents to olefins and aromatics.
Another alternative feedstock option is to produce a range of chemicals from plant-based bio-ethanol, made predominantly from corn or sugar cane, or bio-mass from agricultural and wood waste. Given that bio-fuels are already big business, it is no surprise that a number of companies are heavily investing in bio-feed routes to chemicals including olefins, aromatics and plastics already today.
Apart from manufacturing technologies, the chemical industry has also a role to play and develop the products - from engineering plastics through insulation materials to fuel cells - that are already helping the world reduce energy consumption in power generation, transportation, construction, agriculture, industry and our homes.

What has Shell been doing to improve the competitive efficiency and flexibility of its chemicals production to meet the challenges of feedstock and carbon constraints?

S. Royall: A key element of our strategy has been to achieve a better geographical balance in our global manufacturing network by focusing investments in world-scale, integrated facilities in the Middle East and Asia-Pacific as well as upgrading facilities in Europe and North America. Today, close to 30 % of our chemicals production capacity is in the Middle East and Asia Pacific, which gives us both regional feedstock and market access.
Oil-chemical integration is a key tenet of our strategy. Investing in hydrocarbon integration has also improved our operational flexibility, helping us to maximize returns as feedstock economics shift. We continue to develop and deploy more advanced optimization tools for making day-to-day decisions for maximizing the mutual hydrocarbon value.
Given that easy oil is no longer available, we all need to focus on unlocking alternative hydrocarbon resources and utilizing more unconventional petrochemical feedstock. Shell has already made significant progress in the use of hydrowax and butane in ethylene production, as well as in gas to liquids and coal to liquids production. Using new catalysts developed in our ethylene oxide/glycols technology, for example, enables us to convert up to 90 % of ethylene into ethylene oxide (EO). That is a 10 % improvement over the previous generation of catalysts, and it also reduces costs and lowers carbon emissions.
We have used Shell technology and acquired technology to commercialize and license the world's most efficient process for MEG (Monoethylene Glycol) production. Our latest SMPO (Styrene Monomer/Propylene Oxide) plants use 35 % less energy for every tonne of chemicals produced while emissions to the atmosphere have been cut by 90 %, and liquid and solid waste is almost 100 % recycled.
As for reduction of CO2 emissions, Shell develops carbon capture and storage (CCS) technology, and we are involved in CCS demonstration projects. For instance, at Ketzin, in Eastern Germany, Shell is part of a consortium - including the German government and other industry partners - who began work on a CCS project in 2004 and started CO2 injection and monitoring in June 2008. We believe this is an important step towards developing CO2 capture and storage on a commercial industrial scale.

According to the UN Intergovernmental Panel on Climate Change, carbon capture and storage may contribute up to 55 % of the emission reductions that scientists believe are necessary during this century to address global warming. However, CCS adds substantial costs without revenue. How could it be promoted?

S. Royall: Policy makers should promote CCS in several ways. First, they must put a price on CO2 emissions. They could do so by capping emissions and creating a market where companies can buy and sell emission allowances, as in the European Emissions Trading Scheme (ETS).
Second, CCS needs to be recognized within the Kyoto Protocol's Clean Development Mechanism, through which developed countries can invest in emission-reduction projects in developing countries.
Finally, governments should stimulate the development and commercial demonstration of technologies that hold promise for a low-carbon energy future. The dramatic drop in energy prices in recent months makes it less likely that private investors will use unproven technologies.

What do you expect from the UN Climate Change Conference in Copenhagen at the end of this year?

S. Royall: In our view, Copenhagen should result in the adoption of strong incentives to cut greenhouse-gas emissions as mentioned above, which could promote both investment and economic recovery.
CCS would channel resources toward the most cost-effective CO2 reduction measures, while agreement on efficiency standards for appliances, vehicles and buildings would help companies and individuals use less energy.
Agreement based on such initiatives would ease concern in competitive global industries that strict emission rules in one region would put companies at a disadvantage relative to rivals in countries with less strict policies. Certainly, that has been the concern here across the EU chemical industry with regard to the emission trading system (ETS).