🏭 It's a petrochemical paradise

Good morning. Looks like that Inflation Reduction Act might be yielding its first results. Or maybe Oxy was going to move forward with direct air capture either way—guess we'll never know.

From the condenser:

· Oxy's updated DAC plans

· Ineos' phenol acquisition

· POTD: rubbing alcohol

Oxy is moving forward with DAC

Occidental Petroleum (Oxy) subsidiary, 1PointFive, has announced that they will start the construction of their first large-scale direct air capture (DAC) plant in west Texas using Carbon Engineering's technology in 2024.

Some context:

DAC refers to capturing already-emitted-CO2 from ambient air (like a robot tree). Critics of DAC preach that the low concentration of CO2 in air, roughly 0.04%, implies that more energy (aka money) will be required to do the separation than if you chose to do the separation at an emissions source (which contain 10-60% CO2). So, if your goal is to capture as much CO2 as possible, you will get the best bang for your buck at an emission source.

Okay, so why bother?

People talk about DAC because even if we put an end to CO2 emissions, we'll still be left with whatever had accumulated in the atmosphere. So we're talking about post-net-zero plans that are worth developing sooner than later (especially since the most ambitious DAC cost estimate, courtesy of Carbon Engineering, is coming out at $100 per ton).

Zooming out:

A couple of weeks ago the Inflation Reduction Act (IRA) was signed into law. That act provided hefty credits for DAC—offering $180 per ton if the CO2 is sequestered, and $130 per ton if it is used. It's probably not a coincidence that Oxy wrapped up its FEED study and committed to next steps a week later, but if it works it might actually be profitable (assuming Carbon Engineering's estimate is reasonable and the laws don't change).

Ineos is now selling phenols in Asia

British chemical company, Ineos, decided to acquire Mitsui Chemicals' phenols business located on Jurong Island, Singapore for $330 million.

A little background:

If you've never of Jurong Island, you're in for a treat—basically, over the last four decades, Singapore has slowly merged 7 tiny islands into one big petrochemical paradise. Plenty of familiar names (like ExxonMobil, DuPont, BASF, Shell, and of course, Mitsui Chemicals) operate plants there. Mitsui's plant, which is the topic for today, uses benzene and propylene to make cumene, and then partially oxidizes that cumene to make phenol and acetone. Then that phenol and acetone are combined to make bisphenol A (BPA), which is primarily used to make polycarbonates and epoxies.

Something to think about:

When you make phenol and acetone from cumene, you get two phenol molecules for every one acetone molecule. But when you make BPA, you need three phenol molecules for every one acetone molecule. That means these plants end up with excess acetone unless they limit BPA production to whatever acetone is available (and use the excess phenol to make other stuff, like phenolic resins or the precursor to nylon 6,6 and nylon 6). It seems like this site limits BPA production and sells the phenol.

Okay, so what's the deal?

Acquiring this site will bring Ineos' global phenol capacity up from 1.8 million tons per year to 2.1 million tons per year (more than three times greater than the world's second largest producer). While that incremental volume is significant, what's more significant is that this will be Ineos' first phenol site in Asia (they currently operate phenol sites in Europe and the US). The push into Asia is in-line with the company's growth plans and $7 billion joint venture they just formed with China's Sinopec.

Some more headlines:

• IndianOil decided to aim for net-zero by 2046 (instead of 2050, haha)

• Freeport LNG gave an update on it's restart timeline following that fire in June

• Ineos is using the mass-balance approach to supplyCovestro with bio-based BPA

• BASF and Sulzer Chemtech plan to collaborate on their sustainable technologies

• Dow Chemical is cutting its polyethylene production by 15%

Product of The Day:

Today, we're breaking down rubbing alcohol.

Most people tend to think of rubbing alcohol as being synonymous with isopropyl alcohol (IPA), but that's only sort of true—technically "rubbing alcohol" refers to a water-based solution containing at least 70% ethanol or IPA.

That being said, the ethanol variety has to be denatured with hard-to-remove molecules like methanol and pyridine. That complicates pricing, supply chains, and actually makes for a more toxic rubbing alcohol. As a result, pretty much all of the rubbing alcohol you'll find in stores today is IPA-based (which, by the way, is made by hydrating propylene, which we get from steam crackers).

In case you're interested:

• Article: Check out this cost analysis on which chemicals can feasibly be made with biobased feedstocks.

• Tip: Check out CoinSnacks, a once-per-week newsletter designed to keep you up to date on crypto.*

• Book: You need to understand the forces behind the oil industry to understand the chemical industry. Daniel Yergin's The New Map does a great job breaking it down.*

• Safety Moment: With winter coming, freezes at chemical plants are inevitable. Learn about how improper winterization can lead to process safety events.

The bottoms:

All views represent those of the author not their employer.