24 May 2018

What are some of the challenges governing the U.S. chemical industry? Part 2

In the first part of this blog, I talked about the impact that safety and unplanned downtime has on the daily operation of a chemical plant. I also touched upon how process instrumentation fits into this and how they can help address some of these challenges. In part two, I’d like to focus on two additional challenges, which includes the increasing focus on saving energy and globalization.

Since chemical processing is an extremely energy-intensive industry, there is a lot of focus on making processes more efficient. According to a 2009 study by the International Energy Agency, the chemical and petrochemical sectors are by far the largest energy users in industry, with a share of more than 30% of the total industrial energy use worldwide(1). There are several avenues that could be taken to improve the efficiency but talking about even just a fraction of these would require much more room than this blog allows.

Therefore, I will focus of one critical aspect that has always been sort of a mantra for Siemens as a process instrumentation supplier, which can be easily applied to this phrase: “You can only manage what you can measure.”

By measuring and monitoring your process by means of temperature, flow, level and pressure transmitters, you can identify a baseline of how your process is run. After improvements are made, you compare the new data to the baseline data to show and quantify, for instance, savings in dollars. Energy efficiency is definitely a buzz word of this century, but it certainly applies more amply to the chemical industry than any other process industry.

The last challenge I’d like to highlight is the ever-increasing globalization. Many chemical companies are taking advantage of the abundance of cheap natural gas in the U.S. by building plants all across the country. This is particularly evident in the bulk chemical segment where several new ethylene crackers will be coming online over the next few years. Some of these are built by companies well-established in the U.S. while others are built by consortia, joint ventures or other partnerships as a first gateway into the U.S. market.

Overall, it is still cheaper to build a plant in the U.S. and export the products to, say, China rather than building the plant in China and distributing the products from there. There’s nothing new to globalization and the global support that global companies require from their suppliers but for the chemical industry, this has become more and more prevalent with the abundance of cheap natural gas found in the U.S.

As a player in the chemical market, it is important to be aware of the challenges that drive the industry and find out how your product plays a role in facing or even solving these challenges.

(1) IEA 2009: “ChemiCal and PetroChemiCal SeCtor – Potential of best practice technology and other measures for improving energy efficiency.

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