How could your old t-shirt save the energy industry?
November 29, 2019
November 29, 2019
In my last blog, I set the scene around the impact of one of the most important pressures facing the oil and gas industry today—the circular economy. Despite our research discovering a nearly twofold decline in growth, it’s not all bad news. For instance, there are many ways of handling waste in developed regions.
The European Union, which restricts the landfilling of organic waste, burns almost 42 percent of its waste; the United States burns 12.5 percent.[1] Plastics have a high Btu[2] content, some higher than coal or wood. One plastic bottle can provide electricity for a computer for almost half an hour. Such facts are music to the ears of energy companies—a simple solution with a high value.
But while it doesn’t beat landfill at the bottom of the list for handling plastics, burning is among the lowest values. Using Polyethylene terephthalate (PET) as an example, landfill costs about 3 cents per pound (CPP), while the burn value is calculated to be a positive 3 CPP. The value in a repurposed, composite material is 12 CPP.
The greatest value of PET waste is as mechanical recycle, which is nearest the virgin polymer price, since consumer product companies like to claim “recycled content” on products or packaging. The products of chemical recycling[3] can yield more valuable products, which, as technology is developed, represent significant revenue and margin opportunities (Figure 1).
Source: Accenture Research calculations and analysis; Plastics News; USITC trade statistics, Fuel value based on electric power delivered gas costs ($/Btu) and plastics Btu content; reuse is composite value, per discussion with producers; recyclingmarkets.net
Squaring the circular economy
So how can producers tackle their future?
A matter of scale
One of the biggest hurdles is the supply chain and the large area needed to store and process plastics waste. For example, based on a simple calculation, to feed a 500 kmtpy polymer plant with chemically recycled waste plastic would need about 100 trucks a day. The trucks could deliver bales of waste plastic as well as acreage for storing and sorting. But, large scale refinery-petrochemical complexes also typically have water access and can instead accept plastics waste by barge. In this way, congested port areas could be freed up, alongside brownfield sites where space is at a premium.
For the energy industry, collaboration among refiners, petrochemical and polymer producers, catalyst suppliers, waste handling companies, logistic providers, universities, recyclers and government is key. Now is the time to think creatively and bring technologies together to meet the waste challenge, while discovering new revenue and profit growth.
If you’d like to talk to me about any of the issues raised, please get in touch.
[1] https://www.nationalgeographic.com/environment/2019/03/should-we-burn-plastic-waste/
[2] British Thermal Unit
[3] Chemical recycling is the breaking down of plastics to its original raw material (or depolymerization), as well as into other fuels or chemicals (from technologies like pyrolysis, catalytic cracking & reforming, hydrogenation or gasification).