Dow Fights Energy, Raw Materials Costs

Dow Fights Energy, Raw Materials Costs

New gasification facility could reduce Dow's greenhouse emissions by 20%.

Like most manufacturers, The Dow Chemical Co. is wrestling with ways to combat rising energy and raw materials prices. In the third quarter of 2007 the Midland, Mich.-based chemical producer reported a $400 million increase in feedstock and energy costs compared with the year-earlier period. In recent years, the company has responded in some instances to the high prices by closing plants. But some relief might be in sight with the pending construction of a new gasification facility.

The company has entered into a tentative agreement with Hunton Energy to build a petroleum coke gasification plant at Dow's Oyster Creek property in Freeport, Texas. If and when the deal is finalized, Dow would purchase synthetic natural gas from Hunton to produce electricity and steam for Dow's Texas Operations manufacturing site also located in Freeport. The alternative fuel source is expected to provide multiple benefits for the company's Texas plant, according to Rich Wells, Dow's vice president of energy.

"This agreement with Hunton Energy is an example of how Dow is pursuing diverse sources of energy as part of our overall strategy to mitigate rising feedstock and energy costs," said Wells when the deal was announced in December 2007. "As an added benefit, the process used to produce the steam consumed by Dow will capture CO2 emissions to be sold for enhanced oil recovery use." The new technology also will help the company attain its goal to reduce greenhouse gas emissions by more than 20% by 2015, Wells notes.

Energy from the glowing sun behind the Dow Chemical Co.'s Freeport, Texas, facility isn't saving Dow from rising energy costs, but the company is hopeful that a new gasification facility operated by Hunton Energy will offset future increases.
Hunton would build, own and operate the facility, which would manufacture synthetic gas (syngas) by reacting pure oxygen with petroleum coke and biomass, such as wood chips and rice hulls. The syngas would be converted into methane and three byproducts, including liquid sulfur, high purity carbon dioxide and slag. Dow will sell all the captured byproducts to other manufacturers. The company will sell sulfur to fertilizer manufacturers, slag for construction products and CO 2 for oil production.

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