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Celanese Corp to turn coal and natural gas into ethanol

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Nov. 9 (Bloomberg) -- Celanese Corp., the largest producer of acetyl chemicals used in paint and plastics, plans to spend as much as $700 million to build two factories in China that turn coal into ethanol for industrial uses.

 

Each plant would have annual production capacity of 400,000 tons of ethanol, or 134 million gallons, Dallas-based Celanese said today in a statement. Ethanol output may begin 30 months after China grants approvals and would cost less than the current method of fermenting food products such as corn, Chief Executive Officer David Weidman said in a telephone interview.

 

“It’s a new paradigm for manufacturing ethanol,” Weidman said in the interview. “The technology can manufacture both industrial and fuel-grade ethanol. Our principal focus is the industrial market.”

 

Weidman is betting on coal-based ethanol after building plants in Nanjing that convert coal into acetic acid and related acetyl chemicals used in coatings and polyester, boosting sales in China to 20 percent of Celanese’s total. The company’s proprietary coal-to-ethanol process builds on its acetyls technology, Weidman said.

 

Celanese also plans to open a 40,000-ton facility in Clear Lake, Texas, in late 2012 that will make ethanol from natural gas for the company’s internal use and for sale to the relatively small industrial-ethanol market in the U.S., Weidman said. The location of the Chinese plants is being negotiated, he said.

 

Industrial Uses

 

Ethanol is an ingredient in acetic acid and a half dozen other chemicals such as ethyl esters and amines and butadiene. It is used to make products such as paints, markers, deodorants, perfumes and hand sanitizers, and is blended into gasoline.

 

Celanese is exploring opportunities to make ethanol for fuel, the CEO said. Such a project would require a country with cheap hydrocarbons, a desire to reduce dependence on foreign oil and no requirement to make the gasoline additive from renewable resources, such as sugar cane or corn, Weidman said.

 

China consumes about 3 million tons of ethanol for industrial purposes a year, Weidman said. The market, which is growing 8 percent to 10 percent a year, may need another 1.5 million tons of supply in five years, when Celanese expects to have one and perhaps both coal-conversion plants running, Weidman said. Celanese will be able to double output at each as demand warrants, he said.

 

The China project will have a “meaningful impact” on earnings, Weidman said. He declined to be more specific.

 

Natural gas, which is widely used to power ethanol plants, is not currently used as a raw material for ethanol production, said Matt Hartwig, a spokesman for the Renewable Fuels Association, a U.S. trade group. The U.S. has 204 biofuel plants with combined annual capacity of 13.8 billion gallons, and none use a fossil fuel as a raw material.

 

http://www.businessweek.com/news/2010-11-10/celanese-to-spend-700-million-on-coal-to-ethanol.html

 

I'm still digesting the inforamtion..not quite sure what to make of it..

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I think it is a case of them using what they have an abundance of. China has an abundance of coal but not enough land to produce food and fuel with the size of the population that they have.

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