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Jon LeSage

Jon LeSage

Jon LeSage is a California-based journalist covering clean vehicles, alternative energy, and economic and regulatory trends shaping the automotive, transportation, and mobility sectors.

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The Next Big Thing For The Petrochemical Industry

Petrochemicals is a lucrative market sector for countries and oil companies which have been hit hard by falling oil prices. A new Lux Research study points to synthetic biology (synbio) as a breakthrough in speeding up the development of petrochemicals into new and profitable channels. 

Synbio could be getting a lot of interest as investors look to alternatives — but there are other non-oil and gas energy sources to follow as well, including hydrogen. One of these new solutions is creating a profit center out of offering the oil and gas industry a new way to dispose of its hydrogen sulfide.

Lux Research, an intelligence firm tracking emerging technologies, recommends using synbio for the creation of specialty chemicals, where numerous value propositions like cost savings for producers make it even more appealing. The petrochemical sector has seen numerous failures when trying to use fermentation capabilities to produce new products for commodities, Lux cautions. 

Major petrochemical manufacturers like BASF, BP, Chevron Phillips Chemical, Sinopec, DuPont, ExxonMobil, and Dow, have done well in mainstream segments such as ethylene, propylene, butadiene, and benzene. New specialty products are gaining backing. Synbio can cut off years and billions in investments to bring new and viable chemicals to market, according to the study. 

“Synbio will propel companies that understand the right strategy for the distinct value propositions it offers at each step in the production life cycle,” said Lux analyst Gihan Hewage. “Companies with products in the ideation and early development stages will differentiate most from flexible production and the ability to create novel products, whereas products in later stages of development can leverage the environmental and marketing benefits of the technology.”

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Like other energy segments beyond oil and gas, petrochemicals has seen its share of winners and losers. North America, Europe, China, Japan, and India, have been pleased with results in the higher-value petrochemicals sector. Oman, while not an OPEC member, has been supportive of the oil conglomerate in fighting for its share of the global oil market; however, building a solid footing in petrochemicals as an alternative to oil price instability means a lot of upfront spending in advance of profitable returns coming back much later down the line. That’s hurt Oman and other countries. 

 

For now, hydrogen is gaining much backing as an alternative segment with expectations for long-term gains for BP, Chevron, Shell, Sinopec, and Total S.A. Waste management companies are also supporting efforts to diversify their portfolio with alternative energy gaining more support. Turning waste into biogas like renewable natural gas is gaining in popularity for these utilities, as is extracting hydrogen from biogas and biomass. 

Standard Hydrogen Co. is now offering an improvement to the way the oil and gas industry disposes of hydrogen sulfide — and that can turn garbage into hydrogen. 

Hydrogen sulfide is a highly flammable, explosive gas, and can cause possible life-threatening situations if not properly handled, so oil and gas companies have reasons for finding cost-effective methods to extract it. 

Standard Hydrogen is a company that developed and patented technology to economically split hydrogen sulfide into pure hydrogen and sulfur. It’s taking an expensive part of the refinery business into cost-effective and ecologically sound production of high purity hydrogen and sulfur, the company said.

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Plastic, tires, paper, wood, mattresses, rotting food, and even used clothing, are examples of waste that can be turned into hydrogen. Metals and glass would not be used in this process.

The company says that it has recently proven the science behind the new technology by economically producing hydrogen from hydrogen sulfide. More research and development will be conducted through mid-2020, while seeking additional joint venture partners to complete the engineering phase of the technology rollout, Standard Hydrogen said. 

Getting hydrogen sulfide under control has been a big deal for maritime shipping companies in recent years. It’s been a topic of discussion for port authorities and shipping companies for safety issues; and for reducing the amount of sulfur coming from ships. Hydrogen sulfide is a precursor to elemental sulfur. 

The International Maritime Organization (IMO) released its long-anticipated regulation on sulfur emissions on January 1. The ocean shipping industry accounts for 90 percent of global trade, and the IMO’s international mandate to reduce “bunker fuel” sulfur content in marine fuel oil from 3.5 percent to 0.5 percent is expected to have a major economic impact. That will go for maritime shipping and trucking, which is already hard hit by the Covid-19 pandemic.

By Jon LeSage for Oilprice.com

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