Methanol in the Age of Natural Gas & Climate Change Cheng-Guan Michael Quah (Ph.D.) CEO, Methanol Institute 16th IMPCA ASIAN METHANOLCONFERENCE 2013 October 30 - November 1, 2013 The Shangri-La Hotel, Singapore Discussion The Methanol Institute: Past & Present MI: Memberships & Partnerships Our Programs: Product Stewardship, Fuels, Chemical Transformations Transitions to the future! Questions? Contact Info
Past & Present Began in 1989 as a 501c(6) lobbying group in the US to support methanol fuel markets Today: an international trade association, headquartered in Singapore, with members who are World s leading methanol producers Distributors Technology companies Today, MI Provides market support to member companies in the traditional markets & in chemical derivatives Leads the development of new emerging markets and applications Addresses issues of methanol safety in health and the environment, and offers safe handling tools to the global distribution chain 2013 Members METOR Oman Methanol Company 4
Member Resources: The MI Advantage As MI members, companies enjoy a host of advantages: Participate in MI Committees; Access to Members Only web site; Link on MI web site; Access to weekly newsletter; Access to all MI reports, videos and fact sheets; Access to research conducted by Methanol Foundation; Technical support from MI staff and global expert network; Access to MI offices in Singapore, Washington and Brussels. Strategic Partnerships American Chemistry Council (ACC) Asian Clean Fuels Association (ACFA) Chinese Association of Alcohol and Clean Ether Fuels and Automobiles (CAAEFA) China Nitrogen Fertilizer Industry Association (CNFIA) European Chemical Industry Council (CEFIC)
Strategic Partnerships EU REACH Methanol Consortium Gulf Petrochemicals and Chemicals Association (GPCA) International DME Association (IDA) International Methanol Producers and Consumers Association (IMPCA) Vietnam Standard and Consumers Association (VINASTAS) Current Staff Structure Chief Executive Officer Singapore Executive Assistant Singapore Executive Director - Americas/Europe Government Affairs Director Asia Pacific/Middle East Singapore China Office (TBD) [relationship-building] Brussels Operations Centre Senior Manager - External Affairs and Operations Senior EU Advisor Intern
Organizational Structure Board of Directors (Tier 1&2) Governs activities of the trade association Executive Committee (Tier 1) Provides day-to-day management oversight Global Fuel Blending Guide and coordinate global efforts to promote direct fuel blending Legislative/Regulatory Affairs Favorably influence scientific, regulatory and public policy debate which affect the industry Market Development Develop emerging markets for methanol in chemical transformations and as an energy fuel Product Stewardship Ensure that methanol is handled in a safe manner across the global distribution chain Membership Expand MI s membership base to meet the demands of the global industry Discussion The Methanol Institute: Past & Present MI: Memberships & Partnerships Our Programs: Product Stewardship, Fuels, Chemical Transformations Transitions to the future! Questions? Contact Info
Current Programs & Activities (The Role of the Committees) Safety, health, & environment Methanol in energy applications (fuels) Methanol in chemical transformations (low C number derivatives) Product Stewardship Public Outreach
Product Stewardship Develop safe handling tools for the global methanol distribution chain Organize methanol health effects research. Provide training and guidance to emerging market leaders Provide technical information accessible at no charge Communicate best practices for safe handling of methanol at distribution points
Bootleg Alcohol Prevention Subcommittee Every year, we see multiple incidents of bootleg alcohols spiked with methanol leading to mass poisonings PSC initiatives: Formation of Bootleg Alcohol Prevention Subcommittee Web site fact sheet Medical Community outreach, including international organizations led by World Health Organization Exploration of Project Hope Initiative Legislative and Regulatory Affairs Provide the best available science to meet regulatory challenges Promote public policy initiatives to spur new market applications Support existing derivative markets
Membership Committee & Recruitment Tools MI s membership collaterals refined and expanded into eight languages Master recruitment database created for easier tracking MI members have played important role in recruiting new members (e.g., QAFAC, JSC Metafrax) All tools available on Members Only section of MI web site The Methanol Info Source MI s weekly Methanol Matters newsletter provides latest methanol industry news www.methanol.org is top Internet portal in the world for information on methanol: Only methanol Wikipedia page ranked higher by search engines. No other web site offers more information on methanol. Receives 2 million hits/year
Discussion The Methanol Institute: Past & Present MI: Memberships & Partnerships Our Programs: Product Stewardship, Fuels, Chemical Transformations Transitions to the future! Questions? Contact Info Market Development Committee Provides key technical assistance for expanded development of methanol and related products and technologies (e.g., DME, MTBE, MTO, fuel cells) Supports MI market research and stakeholder development in key current and emerging markets (China, ASEAN, Central Asia, Russia)
Global Fuel Blending Committee Formed to bring global alignment among MI members involved in testing, demonstrating, and commercializing use of methanol fuels Chaired by Ben Iosefa of Methanex, staffed by Greg Dolan Creation of industry web site (www.methanolfuels.org) and comprehensive slide deck Continue stakeholder mapping Develop policy initiatives Communicate best practices to handle methanol at fuel blending locations Support the growing use of methanol in energy applications
Global Methanol Demand Oil replacement (Fuel and Olefins) drive higher demand growth rates ( X 1000 MT) 2012-2016 CAGR: 8.6% 2000-2011 CAGR: 4.6% Source: IHS, June 2012 Note: Excludes integrated methanol demand for methanol to olefins and propylene which is forecast to grow from 2.2 million tonnes in 2011 to 18.1 million tonnes in 2016.
Global Methanol & Derivatives Demand From 2010-2012, global methanol demand increased by 23% 61MMT demand in 2012; forecasted to 137MMT in 2022 MEOH and derivative demand growth all being led by China China s annual MEOH demand growth at 12% (versus 3% globally) China s consumption to rise from 31MMT (2012) to 97MMT (2022) Source: IHS March 11, 2013 Transportation Fuel Applications Out of the ~55 MMT of methanol sold globally in 2011, energy and fuel uses represents ~35% MTBE TAME Low blends High blends Biodiesel DME MTG Diesel blends Fuel cells Best known example of gasoline blending is China Other countries with increasing use for blending include: Australia, Iceland, Israel, Netherlands, UK
Underlying Policy Drivers Three main factors encourage the use of alternatives to oil-derived gasoline globally The order of the three: represents the order in which the drivers are often valued by governments Most governments are pragmatic by nature, especially in the current global economic crisis Energy Security Reduce Reliance on Imports Mitigate Foreign Influence on Policy Emissions Reduction Meet Sustainability Goals Improve Efficiencies Reduce Dependence on Fossil Fuels Domestic Economics Create Industry at Home Provide Jobs Reduce Trade Imbalances Exploit Domestic Resources Open Fuel Standard Act OFS introduced in 2012; to be resubmitted to the current Congress Would require 30% of all 2016 model-year cars warranted to operate on non-petroleum fuels, increasing to 50% for 2017 m-y vehicles Includes alcohol FFVs, and vehicles running on CNG, propane, plug-in battery electrics, and fuel cells. MI US staff recently prepared comprehensive white paper, Methanol: The Clear Alternative; The Case for Methanol Fuel Blending in the United States The paper explored the potential growth for methanol fuels if OFS were passed Recommendation: that Congress moves from a Renewable Fuel Standard to a Domestic Fuel Standard
Methanol Policy Forum MI and IAGS held the inaugural Methanol Policy Forum (Mar 2012) in Washington, D.C. with over 175 participants. The full-day event featured four panels and a luncheon discussion with US Energy Security Council. This Forum provided a unique opportunity to promote the Open Fuel Standard Act. MI and IAGS to co-organize 2nd Washington Methanol Policy Forum on March 18, 2014. Approach to China MI support of MIIT Pilot Program on Methanol-Fueled Vehicle Development and Provincial/National Fuel Blending Standards China Initiatives: Joint activities and discussions with CAAEFA and CNFIA Staff visits / MI presentations at key industry conferences A well-articulated need by the Chinese for more science/engineering-based data, papers, publications to establish value for MI in China Strategy: Relationship-building (perhaps with partner associations) Person on the ground for the above Developing science/engineering-based value proposition
China Policy Drivers 12 th 5 -Year Plan Capitalize on infrastructure development and promote domestic consumerism Focus on energy security and economics, creating more pragmatic path forward Methanol determined to be energy security priority for China to reduce imports Abundance of coal as feedstock Methanol represents 7-8% of China s transportation fuel pool Primarily in inner provinces/coal regions, not yet widespread in largest cities Central government developing standards for methanol fuel Methanol capacity built with expansion of chemicals manufacturing industry Methanol pilot programs and planned methanol FFV s Global Methanol Fuel Developments -- China China Provincial Fuel Blending Standards Provincial standards: main driver for China fuel blending demand growth M15, M30 Xinjiang M15, M30 M5, M15, M85 & M100 Qinghai Gansu M15, M25 Ningxia Shaanxi Henan M15 Jili n Liaoning Inner Beijing Mongolia Hebe Tianjin i Shanxi Shandong Jiangsu Heilongjiang M15 M45 Shanghai M15 Tibet Sichuan Hubei Anhui M15 ~ 7-8 % of China s Gasoline pool M10 Example: M15 = 15% methanol, 85% gasoline Zhejiang Hunan Jiangxi Chongqin g Fujian Guizhou Guangxi Guangdong Yunnan Hong Kong Macau M15 Hainan M15, M30 & M50 Source: Methanex, China PDRC s, Shanxi Methanol office
Central Asian Initiatives Central Asian Republics represent huge untapped natural gas wealth and future potential for methanol industry Azerbaijan s first methanol plant to start producing by end-2013 Uzbekistan looking to expand methanol production as base for domestic, downstream chemicals and for fuel blending Azerbaijani and Uzbek researchers doing significant work on standard development and methanol-fueled vehicle research Central Asian Initiatives MI staff visited Central Asia in March and May; aggressive efforts to build network of key stakeholders and new members MI staff invited to speak at conferences in Uzbekistan and Turkmenistan Uzbekistan govt has invited MI to take business mission of members to Tashkent in May 2014 MI s meetings/introductions resulted in Uzbekistan looking to mirror China s fuelblending standards JSC Metafrax (Russia) has joined MI; interest in MI from other Russian and CIS companies
Global Methanol Fuel Developments Israel Israel fundamentals Large gas finds in Israel Strategic need to reduce oil dependence Technology focus M15 demonstration completed Lab testing in Northern Italy Commercialization in 2014? Government, academia, industry involved Global Methanol Fuel Developments Australia Most fuel requirements imported Australia is gas and coal rich Methanol is easier to integrate into the fuel distribution system than natural gas Ethanol supply limited in Australia Local refinery capacity declining AER, State of the Energy Market (2010)
Global Methanol Fuel Developments Australia Led by Coogee Energy, with support from Methanex and the Methanol Institute Using E85 Flex Fuel Vehicle (FFV). A15 or 15% alcohol: 12% methanol with 3% ethanol cosolvent Methanol / gasoline pump at Coogee plant site Methanol excise tax free status for 10 years (~A38c/litre, ~$US 480/t) Engagement with government, independent fuel retailers, and commercial partners Holden Commodore E85 FFV ASEAN Initiatives Meet with MI members in Malaysia and MOSTI on country s fuel costs and alternative fuel developments (Nov 7-8) Visit Indonesia (Nov 10-16): Participate in the 8 th DME Asia Conference and conduct stakeholder mapping for market development Engage bilaterally and through multilateral forums (e.g., ASEAN Energy Secretariat, APEC Chemical Dialogue) to further methanol industry development in ASEAN MOU signed with VINASTAS in support of consumer education and development of fuel blending standards; pending MOU with Petrolimex Explore leveraged science/engineering-based funding for new methanol markets/initiatives
Why ASEAN Initiatives? Because MI HQ is here Because of ASEAN Economic Development In Reference Scenario (2010 IEA projections): ASEAN primary energy demand expands by 76% between 2007 and 2030, an average annual rate of growth of 2.5% much faster than the average rate in the rest of the world. ASEAN: one of the world s most dynamic and diverse regions, with an economy as large as Canada and Mexico combined and a population that exceeds that of the European Union. Just Personal Thought Joggers Today and the Age of Natural Gas: The traditional routes from gas-to-methanol Today and the Consequences of Climate Change: Bio-gas to-methanol & CO 2 utilization to methanol (in the future)?
Are we entering a golden age of gas? The future for natural gas is bright This special report in the World Energy Outlook 2011 series examines the key factors that could secure for natural gas a more prominent role in the global energy mix, and the implications for other fuels and climate change WEO, IEA, Paris, 2011 News July 1, 2013 CO 2 Utilization Researchers are developing new technologies for using CO 2 as a feedstock to make a variety of chemicals Questions? Contact Us: www.methanol.org Dr. Michael QUAH Cheng-Guan Chief Executive Officer cgmquah@methanol.org Greg Dolan Executive Director for Americas and Europe gdolan@methanol.org Dom LaVigne Director of Government & Public Affairs, Asia Pacific/Middle East dlavigne@methanol.org Larry Navin Senior Manager, External Affairs and Operations lnavin@methanol.org