2. Shale gas conversion: Processing and economics Gennaro J Maffia, gennaro.maffia@manhattan.edu, Alex Bertuccio. Chemical Engineering, Manhattan College, Riverdale, NY, NY 10471, United States With the discovery of vast quantities of natural gas available in various shale formations in Pennsylvania, New York and several adjoining states comes the opportunity to convert this gas, traditionally used for fuel, into more value added products. The methane fraction can be converted into intermediates such as ethylene via oxidative coupling, whereas the ethane/propane fraction can be converted into ethylene via conventional steam pyrolysis. In this paper the processing requirements of a variety of technologies starting with methane and E/P mixes will be presented along with the expected material and energy balances and production economics.

3. Prof. Gennaro J. Maffia “Jerry” Often called a fracking engineer; or words to that effect

4. Jerry Maffia – background 1.Professor of Chemical Engineering – Manhattan College 2.Manager of Technology Development – ARCO a. Petrochemical & Refining b. Start-up & Technical Services gennaro.maffia@manhattan.edu http://home.manhattan.edu/~gennaro.maffia/ACS2013.pptx

5. Jerry Maffia – some projects Energy Related Projects a. Alaskan Pipeline and Remote Gas b. Fuel Oxygenates c. Biofuels/Bioseparations d. Energy Integration e. Novel Separations f. Manufacture of Proppants

6. Shale Gas – an opportunity One point of view

7. “The outlook for advantaged U.S. natural gas was a significant factor in Dow’s decision to invest $4 billion to grow our overall ethylene and propylene production capabilities in the U.S. Gulf Coast region,” said Jim Fitterling, Dow Executive Vice President and President of Feedstocks & Energy and Corporate Development. “Today, 70 percent of the Company’s global ethylene assets are in regions with cost advantaged feedstocks – and we’ve seen the benefits this advantage provides given oil-based naphtha margin pressure in Europe and Asia. This plan represents a game-changing move to strengthen the competitiveness of our high-margin, high-growth derivatives businesses as we continue to capture growth in the Americas.”

8. Economic Impact A World Scale Petrochemical Plant In Pittsburgh.....are you crazy professor? Maybe, but...............

10. Shale Gas – a curse Another point of view

13. Shale Gas – a textbook Call a professor

14. Mining Natural Gas – Wiley Text (work in progress) Table of Contents Chapter 1Worldwide energy picture Chapter 2Current domestic energy situation and opportunities Chapter 3Worldwide carbon dioxide balance – current and anticipated Chapter 4Review of basic fluid flow Chapter 5Overview of hydraulic fracturing – all issues Chapter 6Two phase flow and flow through porous media Chapter 7Fluidization, sedimentation and suspension of proppants Chapter 8Details of the hydraulic fracturing process Chapter 9Composition of fracturing fluids – current and alternatives Chapter 10Alternative fracturing methods and fluids Chapter 11Environmental issues and safety concerns Chapter 12Economic evaluation Chapter 13Societal impact and safety concerns Chapter 14Sustainability issues Chapter 15Future expectations

15. What is all the fuss about.........

16. Mining

18. Methodology….... hydraulic fracturing ……….how? drill a vertical well extend the drilling horizontally case the well perforate the casing pump in high pressure water and sand to fracture the shale at the perforations recover/dispose of the water cap the well bore send gas to treatment treated gas to interstate pipeline system

20. Hey Jerry what’s the story?

22. Hey Professor, would it help if we didn’t use water? Dry Frac Atmospheric CO2 – approaching 400 ppm Flue Gas CO2 – much higher, depends on EA Light HCs

23. The FracKINGS Design Group Morgan, Jimmy, Amanda, Amanda

24. Drexel University Senior Project Team – Using CO2 as a Fracking Fluid Amanda, Amanda

25. Prof. M. and the FracKINGS

28. SOME HEADLINES......... Regulations and Current Policy

29. May 2012 News Safe Drinking Water Act Several statutes may be leveraged to protect water quality, but EPA's central authority to protect drinking water is drawn from the Safe Drinking Water Act (SDWA). The protection of USDWs is focused in the Underground Injection Control (UIC) program, which regulates the subsurface emplacement of fluid. Congress provided for exclusions to UIC authority (SDWA § 1421(d)), however, with the most recent language added via the Energy Policy Act of 2005:

30. May 2012 News "The term 'underground injection' – (A) means the subsurface emplacement of fluids by well injection; and (B) excludes – (i) the underground injection of natural gas for purposes of storage; and (ii) the underground injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities." While the SDWA specifically excludes hydraulic fracturing from UIC regulation under SDWA § 1421 (d)(1), the use of diesel fuel during hydraulic fracturing is still regulated by the UIC program.

31. May 2012 News State oil and gas agencies may have additional regulations for hydraulic fracturing. In addition, states or EPA have authority under the Clean Water Act to regulate discharge of produced waters from hydraulic fracturing operations. Clean Water Act Disposal of flowback into surface waters of the United States is regulated by the National Pollutant Discharge Elimination System (NPDES) permit program. The Clean Water Act authorizes the NPDES program.

32. Topics Current Ethylene Business Environment ODH and Competing Cases – Processing Economics Preliminary Reactor Design CO2 Sequestration and Management ODH Upside Potential – Energy Upgrade

33. Ethylene Business Background Current Cracking Strategy Feedstocks and Leveraging Issues

34. Ethylene Producers Domestic North America World-wide

35. US Producers

36. Petral Information Raw data – play it straight

45. Implications: In the US, with its advantaged natural gas–based feedstock, cash margins in the next cycle should be 2.4x the average of the past 20 years. Dow and LyondellBasell should be the main beneficiaries. Asian utilization rates are set to tighten the most from current low levels. In Asia/Middle East, we prefer companies with exposure to gas-based feedstocks such as PTT Chemicals and SABIC. Europe should remain structurally weak due to low demand, high feedstock costs, and proximity to potential Middle East imports.

46. Definitions VC = RMC + Utilities FC = LC + MC + OVHD + Other CC = FC + VC RNB = FC + VC + CR

47. The US and Europe Have Driven Ethylene Demand From 1990 to 2000, global ethylene demand growth averaged 5.0%, or 1.9x global GDP growth. However, from 2000 to 2009, it averaged just 2.5%, or 0.9x global GDP growth.

48. The US and Europe Have Driven Ethylene Demand From 1990 to 2000, global ethylene demand growth averaged 5.0%, or 1.9x global GDP growth. However, from 2000 to 2009, it averaged just 2.5%, or 0.9x global GDP growth.

49. The ethane to ethylene program is an offshoot from another related TDC program which involves alternatives routes to styrene starting from ethane as one of the components in the feed. The new reaction concept of ethane to ethylene is a controlled catalytic oxydehydrogenation (ODH) process at low temperature. This process undergoes no reaction in the absence of the catalyst till a temperature of 400 C. This new process provides an alternative to ethylene production compared to naphtha or ethane cracker. The main driver for this program is that the process has several potential applications including an alternative to present day ethane cracker, replacement of recycle cracker and the possibility of feed for EB/SM and EO plants.

50. C 2 H 6 + ½ O 2 C 2 H 4 + H 2 O + Heat The process operates at low temperature (< 400 o C) and dry run experiments have proven that there are no reactions without the catalyst.

51. To date many ethane ODH processes do exist in literature and sufficient research efforts have also been given in this regard, but none of them have yet been commercialized The catalyst is capable of maintaining high ethane reaction rate, high ethylene selectivity and self stability. Several phases of improvement have been carried out with the catalyst and the results have also been promising when compared with an ethane pyrolysis furnace. TDC DATA: 10 mol% ethane + 8 mol% oxygen + 10 mol% water + 72 mol% nitrogen Best Literature data (2005 ODH) : 9 mol% ethane + 6 mol% oxygen + 85 mol% helium Pyrolysis cracker (commercial plants) : S/O = 0.3

52. Oxidative Dehydrogenation Study Cases Case 1: Air plus process water recycle Case 2:Air plus nitrogen recycle Case 3:Oxygen plus process water recycle Case 4:Case 3 @ SP Conversion and High Selectivity Case 5:Dow ATR ABB ODH Basis: 90 % conversion, 90% selectivity (Cases 1-3) CO/CO2 equimolar yield 0.08/0.1/0.82 = O2/C2/Carrier 450 C; 4 bar reactor inlet or as noted in sub-cases

53. Case Specifics

54. Case 1 Uses combination of N2/stm as diluent - replaced by Case 3 (all stm) as the Base Case

55. Case 2 Not pursued further due to N2 loading

56. Cases 3,4 Case 3 90/90 Case 4 70/95

57. Case 5 – Based on examples in Dow patent USP 6566573 E-1; looks like an OP

63. Cash Costs, US cts./lb ODH Case 3 is breakeven CC with Conventional (H2 as fuel) CC for ODH will improve greatly with upgrade of low level heat rejection

64. Cash Costs, US cts./lb ODH Case 3 is breakeven CC with Conventional (H2 as fuel) CC for ODH will improve greatly with upgrade of low level heat rejection

65. Required Netback, US cts./lb Much better capital and plant simplicity result in favorable RNBs for the ODH case

66. Reactor Heat Balance Needs Significant Heat Rejection at a High Temperature – Similar to EO (Shell) or ACC Oxidative Coupling – Current research data puts reactor conditions on the threshold of the need for molten salt cooling

67. Case 3 – 420 C coolant

71. Case 3 390 C Coolant

83. 420 C Coolant

84. 390 C Coolant

85. SP H2 Chem

86. SP H2 Fuel

87. Dow ATR E-1

89. Fuel Value Hydrogen

90. Summary Economics – Cash Costs Conventional Pyrolysis – Byproduct value result in lower CC than Case 3 – With byproduct H2 (conventional) taken as fuel, then the CCs are approximately equivalent ODH - Case 3 – No byproducts and significant heat is rejected to the atmosphere during recovery of process water – Potential for heat pump on the quench system

91. Suggestions for Economic Improvement of the ODH Process Low level heat upgrade – power and/or steam generation Higher reactor operating pressure – higher level of waste heat – lower capital due to reduced compression Reduced excess oxygen required – reduced oxidation required beyond CO conversion to CO2 Reduced process steam

92. Waste Heat Upgrade Many Options – Rankine cycle – Thermo-electric Exchangers – Chemical Heat Pump – Absorptive Refrigeration – Stirling Engine

93. Waste Heat Upgrade Rankine Cycle – Compressor – Condenser (high level heat recovery) – Let-down Valve – Evaporator (waste heat)

94. Impact of Reactor Pressure on the Temperature of the Quench Water Conclusion – higher pressure will allow a hotter quench water with the same amount of water going forward X-axis Quench Temperature Y-axisAmount of water in the product gas

99. Value/Cost in Typical OP Cycles

100. CO2 Sequestration, Removal and Recovery/Removal Options Amine Membrane CaO Ryan Holmes

110. Student Researchers – they do all the work

111. and so on.............

112. Thank you