Energy Prices

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We all noticed in recent years that energy prices, and by this energy costs, have risen dramatically. As an example in Figure 12 we see the petroleum price development over the last 20 years. While the petroleum price was relatively stable during the 1990s at a level around 20$ per barrel we observe a strong increase in the last 10 years. In 2008 the petroleum price rocketed, achieving its peak at 140$ per barrel. Although it came down during the economic crisis in 2009 the prices of petroleum and other energies sources will probably continue to rise in the long term.

When we talk about energy prices we have to bear in mind two different effects that have impact on the chemical industry: on the one hand, chemical industry consumes energy for operating its plants. Fuels like petroleum, coal or gas are needed for the energy generation. On the other hand most of the raw materials, which the chemical industry transforms into products, are based on the same compounds that are used for energy generation: mainly petroleum and gas, to a lesser extent coal. For instance polymers, agrochemicals or even pharmaceuticals are mostly based on petroleum as raw material.

Amount Money Made Cost House
Figure 12 Development of petroleum price (Weekly Europe Brent Spot Price FOB) (data from [12]).

As a consequence, rising fuel prices affect the chemical industry in two ways: by increased production costs and by increased manufacturing costs. Dow emphasizes for instance [15] that overall energy costs (fuel and raw materials) at Dow in 2005 exceed 50% of total costs.

The question for the chemical industry now is: How to react to rising fuel prices in order to stay competitive? Two possible levers are: less raw material input by yield increase and less energy consumption by higher energy efficiency. In this book we mainly focus on enhancement of the energy efficiency in the chemical process industry.

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Guide to Alternative Fuels

Guide to Alternative Fuels

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