Published on March 8, 2014
Northwest Innovation Works (China) has plans to build two mega-methanol plants at the Port of Kalama and Port of Westward near Clatskanie, US. China is one of the biggest consumers of methanol and is looking for a new supply. The plants in the country are polluting the air by burning coal to manufacture methanol, thereby enabling U.S. manufacturers to make methanol with cleaner and cheaper natural gas.
China is likely to use up half the global production of methanol this year, demand is also expected to triple by 2022 but doesn’t have the production capacity to keep up. Attempts to turn to natural gas may also fail as it is scarcer and more expensive.
China’s ever increasing demand has made Northwest Innovation think about building three more plants on the West Coast, which has easy access to export docks and pipelines connecting to the natural gas fields of Canada and the Rocky Mountain region.
The company plans on spending nearly $3.6 billion to set up two phases of each plant at Kalama and Clatskanie. Each plant would employ 240 workers and the company intends to commence operation by 2018. Combined output of the plants is expected to be around 10,000 metric tons of methanol per day by burning 640 million cubic feet of natural gas.
Majority of the methanol plants in the U.S. are along the Gulf Coasts of Texas and Louisiana, where natural gas has always been easy on the pocket. But a number of these plants had to be shutdown as they could no longer afford rising natural gas prices. Now that prices of natural gas have declined, a number of plants are being re-opened.
Experts believe that natural gas is likely to remain cheap for years to come and thus this project might as well be successful. This project could boost the economy of a region that has been struggling with unemployment.
However, there are chances that the project could face opposition from environmental groups. This region is already involved in an environmental ruckus over crude oil and coal exports. Environmentalists have not yet opposed the project but this hasn’t stopped business leaders from getting worried that detractors will pay no heed to the benefits of the project.
Methanol will be manufactured by combining natural gas with other chemicals. The plants will run 24 hours a day and release trace emissions of both carbon dioxide and nitrogen oxide. This project is expected to increase ship traffic to Kalama and Post Westward. Nearly 1.8 million tons of liquid methanol will be shipped via the Columbia river annually to an industrial park in China. Northwest Innovation has, in collaboration with fire officials, tried to develop safety precautions as the chemical is highly flammable.
The plants will leave a green footprint. Chinese plants on the other hand produce methanol by burning coal which emits at least seven times more greenhouse gases than using natural gas to produce methanol. Northwest Innovations is convinced that their project would be beneficial both for the environment and for the economy.
Northwest Innovation is the result of a partnership between the Chinese government and British Petroleum. They have been trying to garner support from business and labour groups. Northwest Innovation has succeeded in shoring up a lot of support as they will be hiring union contractors to construct the plants. The government will also support this project provided Northwest Innovation manages to convince them that it’s a green business.
Environmental groups are trying to learn more about the proposed project and have not raised their voice against it yet. However, it is likely that the plan will move forward as it has won a lot of political support because of the huge proposed investment and the promise of high-paying jobs.
And there are analysts who believe that methanol is among the cleanest of chemical plants and thus the risks associated with this project are low.
