Incentives sought for ethanol made from natural gas

Dallas-based chemical company Celanese Corp. has engineered a process to produce ethanol from natural gas and wants the federal government to give it some of the same incentives afforded corn-based fuel.

The company is promoting its technology, called Celanese TCX, as the answer to problems of corn-based ethanol — unpopular subsidies and its competition for a food crop, contributing to rising food prices.

By using the prolific domestic natural gas supply to produce the gasoline additive, the nation can ease demand for corn crops with a petroleum product that doesn’t have to be imported, said Steven Sterin, Celanese chief financial officer and head of advanced fuel technologies.

Pressure on food prices

“It allows us to alleviate some of the pressure on food prices, and we can do it without subsidies, using American-based resources,” Sterin said. “It provides solutions to all those problems that are facing our country.”

On Tuesday the U.S. Senate debated, but rejected, a measure to repeal corn ethanol tax subsidies, a benefit worth billions of dollars annually.

Ethanol also benefits from the Renewable Fuel Standard, a federal mandate requiring a national increase in the level of renewable energy blended into the transportation fuel supply from about 14 billion gallons this year to 36 billion gallons by 2022. It calls for increased use of ethanol and other biofuels produced from renewable sources like wood, landfill gas, animal waste and other organic materials.

Celanese executives want to see natural gas-based ethanol on the list of gasoline additives allowed under the Renewable Fuels Standard. The product is chemically identical to corn-based ethanol and has the same low-emission properties.

Celanese executives want to see natural gas-based ethanol on the list of gasoline additives allowed under the Renewable Fuels Standard. The product is chemically identical to corn-based ethanol and has the same low-emission properties.

The problem is that natural gas isn’t renewable.

“That absolutely is not going to be qualifying as a biofuel under the Renewable Fuel Standard, and there’s no way around that,” said Paul Niznik, biofuels manager for Hart Energy, a consulting and publishing company for the energy industry. “Ethanol that’s not from a renewable source would not have any incentives on it to be used as a transportation fuel.”

Niznik noted that the Celanese technology could have industrial uses. Ethanol is also used in the manufacture of paints, antiseptics and other alcohol-based products.

Sterin said the company is weighing those opportunities. But transportation fuel remains its primary focus.

Cheaper than corn?

He said Celanese has been encouraging legislators to introduce laws that will make natural gas-to-ethanol a preferred additive. He said Celanese can produce it more cheaply than the corn-based version, at the equivalent of $60 a barrel, about $1.50 a gallon. Ethanol futures traded Tuesday at $2.75 a gallon.

The Celanese TCX technology, developed at a facility in Pasadena, puts hydrocarbons through a thermochemical process to produce ethanol. Celanese is building a coal-to-ethanol plant in China to produce ethanol for manufacturing paints, antiseptics and pharmaceuticals. The company expects the technology will eventually be able to produce ethanol from organic materials.

Sterin said the company conducted a poll of 606 likely Texas voters and found 75 percent supported using domestic natural gas as a base for ethanol fuel. And 65 percent supported changing the Renewable Fuels Standard to allow the fossil fuel technology, the poll found.

A mandate

Michael McAdams, president of the Advanced Biofuels Association, called the technology interesting. But whether the market will take to it as a fuel for vehicles is questionable, he said, because it is not supported as an additive by the Renewable Fuels Standard.

“If it’s cheaper, the refiners are going to use it. But the problem they are going to have is the refiners have a mandate in place” to use renewable fuel, McAdams said. “You can’t just use natural gas and receive any consideration under RFS. It is excluded by definition.”

simone.sebastian@chron.com

6 Comments

  1. [...] Plan to Begin Ethanol Production in China by Mid-2013 …Business Wire (press release)Incentives sought for ethanol made from natural gasFuelFix (blog)Hydrocarbon Processingall 22 news [...]

    #1
  2. ntangle

    If they can really synthesize ethanol so cheaply from NG, they shouldn’t even need incentives (at current prices) in order to compete directly with gasoline. $60/bbl < 2/3 the price of crude oil . Ethanol has about 2/3 the btu/gal of gasoline.

    It would be interesting to learn the energy efficiency of this process. IOW, how many btu worth of ethanol are output versus the btu input (the NG feedstock)?

    #2
  3. [...] increased use of ethanol.Of course this post wouldn’t be complete without highlighting how natural gas could help get us out of this mess, minus the subsidies of course. Either things work in the free market or [...]

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  4. Energy Moron

    “It would be interesting to learn the energy efficiency of this process. IOW, how many btu worth of ethanol are output versus the btu input (the NG feedstock)?”

    Precisely, ntangle.

    Let’s see, the number of hydrogens goes from 4 to 3 per carbon atom so this is certainly not “green” and is not good for the environment.

    Assuming carbon isn’t destroyed (only hydrogen)–you know for “green” reasons save the carbon of course!–only 77% of the energy remains, so of course this also wastes energy.

    Another glaring example of why the future belongs to China… a corporate welfare queen begging for government handouts to waste energy and destroy the environment, and the local voters approve.

    This is disgusting.

    #4
  5. CelaneseCorporation

    Celanese does not seek or want financial incentives or subsidies from the government.
    We are seeking the ability for the US consumer to have access to natural gas based ethanol.
    For more information, visit Celanesetcx.com.

    #5
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