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by Nick Kraguljac
April/May 2008
By 2010, maybe earlier, a barrel of oil will cost over $150. Twenty years after that, oil production will reach its peak, and in 2060 the cost of oil will surpass $900 per barrel as it has become a scarce raw material. Long before that, oil will have stopped being used for fueling transportation or heating houses. (“Black gold” extracted from oil shale and sands processed from the tar-like bitumen into refinery-ready light crude and the few wells still pumping in Antarctica are exclusively used for pharmaceuticals and some special plastics.) Fact or fiction?
Crude oil
On March 14, 2006, Republican Congressman Roscoe Bartlett (1) gave a speech before the U.S. House of Representatives: “We really live in a plastic world. And if you look around you and see how much of your automobile, how much of your office, how much equipment you buy is made from oil, it is just everywhere … World oil production is at or near its peak. After peak production, supply no longer meets demand. Prices and competition increase … reserve lifetime for oil is about 41 years. This is not that in 41 years at current use rates we fall off a cliff. There will still be oil available 40 years from now, but in greatly reduced amounts, and probably by the end of the century, we will have gone through or very close to being through the age of oil.”
A report by the U.S. Army Corps of Engineers (2) states that the days of inexpensive, convenient, abundant energy resources are quickly drawing to a close.
The fact is that since April 2002, the cost of a barrel of oil has increased a stunning 367 percent and has recently crossed the line of $100, with some analysts expecting it to rise well over $200 within the next decade. Low sulphur diesel increased 415 percent during this six-year period. Natural gas lagged behind at a moderate (!) 266 percent. Regular gasoline at a pump in the Midwest United States sold at $1.10 per gallon in March of 2002, and six years later that increased to $3.19 per gallon.
The constant upward movement of crude oil has also had a dramatic impact on feedstock used for plastics. Since 2002, benzene went up 242 percent, ethylene 308 percent and methanol soared 552 percent. On the other hand, plastic raw materials have gone up much less. High density polyethylene, injection molding grade, changed over this six-year period 109 percent, polypropylene homopolymer 140 percent, polypropylene random copolymer 105 percent and polystyrene high impact 102 percent. Other polymers used for stock shapes had comparable increases. If you now look at your sales or purchase prices of stock shapes, you will see also an increase during this period, but only in the low double digits.
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| Overview of
raw material flow from oil
to different
types of
engineering
plastics with respect to
chemical
intermediates.
(Chart courtesy of
SABIC Innovative Plastics.) |
Industry changes
This is astonishing, as competitive materials have also gone up along these lines, such as copper at 439 percent, aluminum at 112 percent and cold-rolled steel at 123 percent. Plastics manufacturers and distributors have noticed the squeeze on their margins. If I look at the above situation it makes me wonder why the price-elasticity in our stock-shape market is so low. My concern is that all of a sudden raw material suppliers will either drastically increase prices or get out of such commoditized markets. BASF has divested their PP and PE production and is now trying to get rid of PS and ABS, and GE has sold the total of its plastics business to Saudi Arabia. What will happen to the plastics industry? For which changes do plastics manufacturers, distributors and processors have to brace for?
The changes in our industry will be driven by four major trends: cost out, weight out, energy efficiency and environmental governance. The corresponding growth clusters will be white and green biotechnology, raw material changes (what comes after oil?), energy management and nanotechnology.
Biotechnology
White biotechnology is mainly targeted to create biodiesel and biodegradable plastics. Today there are several products available, mainly made from sugarcane, corn starch, rape seed oil and other plant oils, such as palm or soy oil. These products include biomass for electricity generation and additions to or substitutes for diesel fuel. Can biomass production ever start to replace oil supplies over time — is there enough land and can it be converted to useful products efficiently? Is it ethical to use food for replacing fuel and oil derivatives? And what about the cost? Over the past six-year period, corn has gone up 171 percent, soy oil 386 percent and sugar 139 percent. There have been major obstacles to products made with white biotechnology. In plastics, biodegradable packing materials have been 5 to 10 times more expensive to produce than crude oil-based polymers. And this is where green biotechnology comes into play.
Green biotechnology is genetically engineering plants by the selective transfer of one or more genes from one organism to another to create new and improved plant properties. There are projects to increase the starch contents of potatoes or corn to yield more starch output of a crop per acre, resulting in lesser harvest cost combined with a higher yield of extracted starch, which in turn is the base material for many bioplastics. “Producing biopolymers from plants is a promising and fascinating scientific challenge,” said Yves Poirier (3) from the Laboratory of Plant Biotechnology at the Institute of Ecology, University of Lausanne, Switzerland. “Further genetic modifications still need to be introduced in the plants for their improvement,” he said. Eight to 10 years is his rough estimate of how long it will be before plant-produced plastics might become economically viable.
Most of the global chemical multinationals, such as BASF, SABIC Innovative Plastics (formerly GE Plastics), the Dow Chemical Company and others, are devoted to nature’s richness in search of methods to replace petroleum-based synthetics. Developing materials without using up fossil resources stands prominently on their strategic agendas. This does not necessarily mean only biopolymers, but also involves recycling. SABIC Innovative Plastics believes that by merely recycling PET bottles by depolymerization and subsequent repolymerization, the world demand of PBT could be satisfied. The challenges they face are that various scientific fields need to be combined and that new types of education, training and professions need to emerge covering jointly chemistry, physics, biology, material sciences and analytics.
Although base research needs to stay with those giants, we as manufacturers, distributors and processors need to cover the vast field of applications to determine the properties needed. It is the common understanding of the raw material manufacturers that over the next 20 to 30 years about 50 percent of all plastics will be biobased and that this will also be the maximum limit. The second half of plastics will be made from natural gas and coal with a few polymers remaining where the base of crude oil cannot be substituted.
Sustainable energy management
With dwindling energy resources, plastics will play a major role in energy management. As plastics show a very high potential of enhancing innovation, they will be a major incitement for technological development. Essential new sustainable energy sources such as wind or solar energy are tapped with equipment already utilizing lots of plastic components. Besides generation, more efficient storage of electricity will only be possible with plastics. Lithium-polymer batteries use a solid lithium containing electrolyte and will have the advantage of not leaking acids, flat method of construction and enormous design freedom. Such batteries could be built into the doors of cars to propel the car instead of gasoline. In London, the traditional-looking red double-decker buses already use a drive generator for the recharge of the battery, and combined with windows made from polycarbonate which are half the weight of glass, those buses only use 1.9 liters of diesel per 100 km (39 miles per gallon).
Plastics will also improve fuel cells by implementing proton exchange membranes made from sulfonated tetrafluorethylene copolymers. This development will provide us in the near future with 20 hours of playtime on MP3s, up to 10 operating hours on laptops (Toshiba), and a radius of 400 km (250 miles) for electric cars (Daimler). It will also reduce the weight in planes, trains and automobiles, trucks, tractors and other earth moving vehicles, which will help conserve energy as lighter vehicles need less energy to be propelled forward.
But it is also important to manage energy emissions. Extruders use up a lot of electricity and emit heat. Senoplast, an industry leader in stock shape technology and environmental protection, collects such heat and feeds it into a long distance heating network and in exchange receives energy for free to heat and cool 150,000 square feet of offices and factory buildings which are insulated with state-of-the-art plastic foams and panels. And do not forget, less burning of fossil energy sources reduces CO2 emissions and the greenhouse effect.
Nanotechnology
Nanotechnology will also jolt forward the possibilities of engineering, design and product properties. This scientific field comprises the technology of changing material properties by introducing tiny organic or inorganic particles which are smaller than 100 nanometers. Just to give an idea of the size: atoms are between 0.1 to 0.4 nanometers, a dust-corn is 1,000 to 5,000 nanometers and a typical hair strand has diameters from 40,000 to 100,000 nanometers. The idea is to use biological principles combined with physical laws and chemical know-how to push forward material-science.
An already widely used nano-filler are nano-carbon tubes. One-twenty-eighth of an ounce (1 gram) has a surface area of almost 3/4 of an acre (3,000 m2). They are used in plastics to make polymers such as acetal or PEEK conductive. The real advantage is that with traditional additives to make the polymer conductive, such as carbon, one has to use up to 40 percent of filler, thus reducing the other properties of e.g., acetal by 50 percent. With nano-carbon tubes one needs much less than 5 percent of filler and the valuable properties of POM stay fully intact. Other mineral nanoparticles can replace glass fillers. Nanofilled PA 6 can reach approximately the same stiffness at a higher temperature resistance as 30 percent glass-filled PA 66 but with the advantages of much easier machinability, FDA compliancy, and almost 25 percent lighter weight and better flame resistance.
Other nanotechnologies will provide paints for ships to reduce drag (reducing fuel needs) or build-up of algae and mussels on the hull (again less drag and less energy intensive maintenance). Easy to clean surfaces, copying the “lotus flower effect,” increased scratch and UV resistance are areas of research. Nanofoams will be used to reduce the Brownean molecular motion during temperature transfer through materials and so will increase insulating properties needed in building and construction. Such foams will also be used for noise control and electromagnetic shielding. Nanoparticles can increase the barrier properties of plastics which is important if one envisions that almost 1 billion gallons of fuel migrate through plastic tanks and subsequently evaporate into the air every year.
These tiny parts will enable us to further develop OLEDs, chips, photovoltaic and solar energy collecting systems, display technology and holographic storage media and light emitting diodes. Also printable electronics are feasible. But nanoparticles can also be introduced during polymerization of raw materials to change flow behavior, and so reduce cycle times, increasing product output at lower energy usage. Textiles, paper, cosmetics and many more industries will be changed forever by this technology.
The market volume for nanotechnology is growing every year by 10 to 15 percent and will reach the amount of $750 billion by 2010. The plastics industry will have a big part of this and estimates for components made from modified thermoplastics are as high as $60 million. (4)
Such promising product properties and growth potentials will enhance complex formulations and multifunctional materials for commercial applications in order to meet the market demands of cost out, weight out and energy conservation.
Environmental issues
But the major driving force of our economy will be energy conservation and environmental protection. All industries and especially the chemical and plastics industries will have to change how we develop and bring product to market. Customer value will be measured in the future not only by which system solutions we provide and at which price, but also how our product, from pump to part, will affect our environment. Good corporate environmental governance will become a worldwide major factor when competing for market share but will also yield financial benefits. The cost and benefit is easily measured fairly precisely by setting up appropriate environmental accounting and reporting systems. Many companies which have introduced the environmental standard ISO 14000 have seen that a long-term environmental strategy can yield ongoing financial benefit. Energy protection, emission reduction, waste management, recycling and many more methods of environmental protection will make us money.
But environmental governance will also be the prominent measure of ethical business behavior. Pope Benedict has made several strong appeals for the protection of the environment, saying issues such as climate change have become gravely important for the entire human race. Under Benedict and his predecessor John Paul, the Vatican has become progressively “green.” If such a traditional institution can go green, we in our industry should follow. All companies in the plastics distribution channel are called upon to participate in the Environmental Issues Committee and future programs of IAPD and EPDA to develop solutions, as we, the pioneers and leaders of the plastics stock shape and PVF industries need to take the lead in such fundamental changes.
1 U.S. Congressman Roscoe Bartlett’s speeches of March 14, 2006,
and February 28, 2008, available at http://bartlett.house.gov and http://www.energybulletin.net/13881.html
2 www.hq.usace.army.mil/
3 http://www.unil.ch/dbmv/page8008_en.html
4 EU Commission — Growth Forecast Consumer Market Data
Sources:
• Austrian Institute for Research – Chemistry and Engineering (OFI)
• European Plastics Converters Association (EuPC)
• www.propurchaser.com
• U.S. Energy Information Administration
• SABIC Innovative Plastics, BASF, Senco R&D GmbH
Nick Kraguljac is global business manager of the Klepsch-Group and in charge of marketing and sales for Zell-Metall GmbH in Kaprun, Austria. For further information, contact Zell-Metall GmbH, Schulstrasse 511, Kaprun A-5710 Austria; (43) 6547-8417, fax (43) 6547-8890, www.zellamid.com, e-mail: n.kraguljac@zmk.at.
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