The Next Revolution in Specialty Chemicals?
There is constant debate about when and how quickly we will run out of oil, but there is no doubt that, at some point, we will. The term “peak oil” has passed into the popular lexicon to describe the point at which oil production reaches its highest historical level, a point beyond which, literally and figuratively, it is downhill for oil producers. Recent analysis by “The Oil Drum” illustrates various predictions of when and at what point, global oil and natural gas liquid production reaches its peak. Most predictions are grouped around “about now” as the time that the peak is reached.
The issue of peak oil has implications, of course for transportation and other essential areas like heating. Not as widely discussed, at least in the mainstream media is its implications for the chemical industry and surfactants in particular. Crude oil based products end up as alcohol sulfates, ether sulfates, linear alkylbenzene sulfonates, alcohol ethoxylates, nonylphenol ethoxylates, softener, conditioner and antimicrobial quats and amphoterics. That is, in essentially every major surfactant class used in every class of detergent, personal care and industrial cleaning product. Try maintaining basic personal, household and institutional hygiene for a day without oil.
Our blog post on surfactant economics discussed current issues with feedstock pricing and volatility but really did not address the long term issue of what happens when these feedstocks run out. Some companies however, are building a business around addressing this question and their activities are starting to have a direct impact on the future of the chemical industry and the surfactant and oleochemical industries in particular.
These companies are focusing on chemicals made from naturally occurring bio resources (or biomass) like vegetable oils, switchgrass, non-food and food crops, algae and other sources of triglycerides and carbohydrates. The current wave of activity grew out of the bio-fuels initiatives around ethanol (from Corn (maize) in the US, Sugar in Brazil) and biodiesel (from soybean oil in the US, palm and Canola in other parts of the world). Bio-fuels grew in response to the abovementioned “peak oil” scenario. While many companies started chasing the brass ring of a gasoline substitute, a number realized that an easier, quicker, higher margin way to get to market is to use bio resources, instead of oil, natural gas or crops, to make chemicals for use in diverse markets like cosmetics, lubricants, coatings, detergents, polymers and many other niche applications.
Today, there a number of these bio-chemical companies that are working with some innovative and potentially game-changing technology for chemicals production. A popular business model revolves around biorefineries, which take biomass (as noted above) and produce existing chemicals more cost effectively than the traditional routes from oil, natural gas or traditional crop vegetable oil (like palm oil) splitting. A secondary market opportunity is to produce new, custom tailored chemicals that are not available via the traditional routes.
An outstanding resource for understanding and tracking this emerging segment is the ICIS Green Chemicals Blog, to which your author credits his initial realization that this field will bring about the next revolution in specialty chemicals and related markets.
In fact, the author of the ICIS Green Chemicals Blog will be moderating, with me, a panel luncheon discussion hosted by the NY ACS, Chemical Marketing and Economics Group on March 3rd in New York. Further details here.
The following table lists some companies active in this growing field. The first two listed, Martek and Novomer will be panelists at our March 3rd CM&E meeting.
|
Company |
Key Technology / Products/ Markets
|
Comment |
| Martek (www.martek.com ) | DHA for infant formula | Co. just acquired in $1Bn deal by DSM |
| Novomer (www.novomer.com ) | Catalytic absorption of CO andCO2 to make polymers | VC funded including stake by DSM |
| Rivertop Renewables | Glucaric acid for detergent builder market | Detergent market initial focus |
| GlycosBio | Microbial fermentation of biomass -> solvents | Initial focus on converting glycerine to higher value products. Building plant in Malaysia. |
| Solazyme | Algae as catalyst to convert biomass to esters and specialty oils | Targeting the surfactant and oleochemicals markets. Partnered with Unilever (Detergents and PC) to develop applications. |
| Elevance | Modified oils and waxes for surfactants, oleo applications | Recently signed JV with Wilmar, one of largest palm plantation cos in world. Also signed agreement with Stepan for surfactant applications. |
| Origin Oil | Converts algae into oleochems for cosmetics and other applications | Partnered with Ballestra for commercial plant construction |
| LS-9
(ls9.com) |
Microbial fermentation of biomass to fuels and chemicals | Partnered with P&G for consumer chemicals in detergents and personal care |