Examining Methanol’s Green Claims in the Northwest

The backers of several proposed petrochemical refineries in the Northwest are pitching their projects as environmentally responsible investments that would reduce global warming pollution. Billed as a cleaner means of creating methanol, the proponents allege that they will enable Chinese manufacturers to produce olefins, a precursor to plastics manufacturing, with much less pollution than current methods. Yet there is vanishingly little evidence to support these claims—and what evidence exists actually suggests that the Northwest refinery proposals may be dirtier than alternatives.

Perhaps most frustrating, even the staunchest supporters of the methanol developments seem to have no reason to believe their own environmental hype. After months of inquiry, I have been unable to elicit from project backers even a single piece of research or analysis supporting the claims about the environmental benefits:

• I corresponded with several senior officials in the office of Governor Jay Inslee, who has gone on record supporting the projects on environmental grounds, and received no evidence of any kind.
• I also corresponded with the company, Northwest Innovation Works (NWIW), repeatedly over the course of several months, again asking for supporting evidence and again receiving nothing.
• I asked for such evidence in a number of high-profile public speaking engagements in Tacoma—in one case while sharing the stage with the company’s Vice President of Technology—and received no response.

Of course, the fact that the project proponents have no evidence to support their environmental claims does not mean that they are false, just that there is no particular reason to believe them. And that they are shirking the burden of proof for what they tout as a bragging point of the projects is at best confounding, at worst suspicious.

Examining the climate case for Northwest methanol refineries

On its website, NWIW claims that the Northwest gas-to-methanol refineries would reduce pollution from methanol production by as much as 70 percent relative to existing coal-to-methanol processes. Although NWIW itself does not provide any evidence to support this claim, it does appear to be broadly consistent with scientific research, at least at first blush and in a limited sense.

The hyped carbon reductions at the Northwest methanol refineries would come at a steep cost.

In a technical document, the Intergovernmental Panel on Climate Change (IPCC) finds that “GHG emissions from methanol made from coal will be double that of petrol, whereas methanol from natural gas will be the same, and from wood will be lower.” And the IPCC findings appear consistent with a 2013 paper from the Inter-American Development Bank, which found that: “Methanol can be produced from a very wide range of feedstocks, namely, natural gas, coal, biomass, agricultural and timber waste, and solid municipal waste. However, overall, natural gas conversion to methanol is the most efficient.”

In other words, replacing coal-to-methanol production with gas-to-methanol production would yield potentially large decreases in greenhouse gas pollution. Notably, however, gas-to-methanol may not yield a pollution advantage over oil-based production.

Yet NWIW’s alleged carbon benefits rely on a very big assumption: that the Northwest methanol refineries would replace coal-based forms of production, rather than just add to total production. No one has supplied any evidence to show that this is true. So even if the proposed facilities are somewhat cleaner, the Northwest refineries may simply add to global supplies of petrochemicals—and global greenhouse gas pollution—without actually supplanting dirtier production methods.

In addition, project backers claim their facilities would yield big on-site greenhouse gas savings. According to NWIW, the Northwest refineries would incorporate Ultra Low Emission (ULE) technology, which would achieve up to a 75 percent reduction in natural gas use at the facility itself by substituting electricity. Yet the electricity demands of the ULE process are enormous, and project backers have ignored the sizable pollution associated with that added power consumption—a galling oversight in light of the fact that the regional power grid does not have large quantities of available carbon-free electricity.

According to Seattle Times reporter Hal Bernton’s investigative article on the methanol proposals:

So if more hydropower is claimed by the methanol plants, other utilities that use that electricity would have to turn to alternatives. At least for the next few decades, the likely options would include power generated by natural gas or even coal-fired plants that emit carbon emissions, said Tom Eckman, with the Northwest Power and Conservation Council.

In short, the hyped carbon reductions at the Northwest methanol refineries would come at a steep cost: they would boost fossil fuel electricity production elsewhere, either scaling up gas-power generation or prolonging the lifespans of coal-fired power plants in the West. In fact, the Draft Environmental Impact Statement for the proposed Kalama, Washington, refinery finds far more modest carbon reductions attributable to ULE processes.

Moreover, although ULE sounds like a promising technology, it is difficult to evaluate and probably warrants skepticism. According to a NWIW factsheet, “the first methanol application was made for a project in 1994 at the Coogee LCM plant in North Laverton, Australia.” Yet the Australian plant was a proof-of-concept development that does not appear to have been replicated anywhere on Earth in the subsequent two decades. It’s also far smaller than the proposed methanol facilities in the Northwest, so its relevance is not at all clear.

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Are the Northwest proposals worse than alternatives?

In the same Seattle Times investigation, Hal Bernton unearthed potentially damning evidence that the Northwest methanol refineries would be worse than alternatives because they are conceived as a route for making olefins (for eventual use in plastics manufacturing). Yet making olefins from methanol is a relatively inefficient and dirty method:

Meanwhile, in the US, investment continues to flow into plants that manufacture olefins from ethane and other hydrocarbons. These processes typically consume less energy and generate fewer carbon emissions than the production of methanol-based olefins, according to a study in the journal Energy published in 2008. A study co-author—Kornelis Blok, an energy-systems researcher based in the Netherlands—said state-of-the art ethane plants remain a more energy-efficient option for producing olefins.

In fact, that paper found that natural gas-based “routes use more than twice as much process energy than state-of-the-art steam cracking routes do….” In other words, the way to make plastics manufacturing cleaner would be to use other feedstocks, not methanol.

The paper also yields a clue about why the plastics industry may be particularly interested in siting these projects in the Pacific Northwest: low costs and available natural resources. As the abstract points out, gas-derived methanol “can be economically attractive in remote, gas-rich regions where natural gas is available at low prices.” The Northwest’s inexpensive electricity rates and relatively abundant water supplies—both necessary for gas-to-methanol refining—sure increase the projects’ economic attractiveness.

A 2014 research paper on olefins production by three scientists in China appears to support a cost-based line of reasoning. Finding that the greenhouse gas pollution of gas-to-olefins is roughly equivalent to that of oil-to-olefins production (and cleaner than coal-to-olefins), they point out that overseas methanol production, as in the Northwest, would be desirable because of China’s “shortage of natural gas.”

The Pacific Northwest does not have shortage of natural gas, owing to huge reserves in northeast British Columbia. Yet the demands of methanol production would be enormous. According to the Northwest Natural Gas Association, the amount of natural gas required at full capacity for the three methanol refineries originally proposed (including the now-withdrawn project at Tacoma) would cause the annual natural gas consumption of Oregon, Washington, and British Columbia to surge by more than 40 percent. Importantly, NWIW’s carbon reduction estimate does not appear to account for the potentially large upstream pollution of natural gas, including extracting the fuel via fracking technologies and transporting the fuel by pipeline.

One analysis by a chemical industry trade journal, ICIS, lends further credence to the view that cost considerations largely drive the Northwest methanol proposals. The analysis points out that China “lacks natural gas resources” and that coal-to-olefins is “uneconomical.” The energy journal Platts comes to similar conclusions.

Other factors to consider

Although the Northwest projects are being pitched exclusively as a means to support plastics manufacturing in China, methanol is an enormously versatile petrochemical that can be deployed for a range of uses. Perhaps most importantly, it can serve as a transportation fuel. In fact, China is already the world’s largest user of methanol as a transportation fuel, and the country has ambitious plans to grow its use in vehicles.

On this score, the scientific evidence suggests that methanol derived from natural gas may yield a slight environmental benefit relative to conventional gasoline. A 2010 paper by researchers at the Massachusetts Institute of Technology found that “methanol from natural gas can slightly decrease the carbon intensity compared to the baseline gasoline.” Similarly modest findings are echoed by the Methanol Institute, an important industry trade group:

Methanol from natural gas is projected to have just slightly less GHGs than gasoline—this is due primarily to the assumption that methanol vehicles are 7% more efficient. With the range of GHGs possible from both gasoline and methanol production from natural gas, it is most likely that this difference is not significant.

These findings do not, however, appear to factor in any upstream emissions that would be attributable to the Northwest methanol projects. A more complete analysis would contrast the lifecycle pollution of gasoline burned in China’s vehicle fleet to the pollution associated with the Northwest projects specifically: fracking the gas in northeast British Columbia, piping it to sites in Oregon and Washington, converting it to liquid methanol, and then shipping it across the Pacific Ocean in tankers to places where it would be combusted in cars and trucks.

As recent history has shown, energy companies have signally failed to develop new fossil fuel projects in the Pacific Northwest, in large part because of sustained environmental opposition. So it’s perhaps not surprising that the supporters of petrochemical projects have adopted the lingua franca of the region by claiming to be green. Yet an examination of the available evidence—and the glaring absence of it from the project backers themselves—suggests that gas-to-methanol refining in the Northwest is far from an environmental panacea.

Postscript, Jan 2018: In an April 2017 China Daily article about the Kalama methanol plant, a leading industry figure in China makes the point that the Northwest is an ideal location for reasons of economy: “The US is a favorable source of shale gas thanks to easy access, the low cost of electricity and a close location for international shipping.” And the chairman of the company behind the project made exactly the same point in a December 2017 Reuters article, stating, “We picked Kalama because of its access to the best abundant gas supplies from both America and Canada, and it’s a third closer to China compared to the Gulf of Mexico.”