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Eastman marks 25 years in coal gasification

Sharon Caskey Hayes • Jun 14, 2008 at 12:00 AM

KINGSPORT — In the 1970s, scientists, researchers and engineers at Eastman Kodak Co. started searching for ways to offset rising energy prices. The company’s operating costs were on the increase due to escalating oil and natural gas prices exacerbated by the oil embargo. Indeed, crude oil had jumped in price from $3 a barrel in 1972 to a whopping $12 a barrel by the end of 1974.

Eastman researchers began exploring other potential sources of raw materials to fill the company’s growing needs. And they didn’t have to look far.

In early 1980, Eastman executives held a press conference to announce the company would construct a major expansion in Kingsport to produce industrial chemicals from coal mined from the mountains of Southwestern Virginia.

Toy F. Reid, then Eastman Kodak executive vice president and general manager of Kodak’s Eastman Chemicals Division, and Robert C. Hart, president of Tennessee Eastman, took to the podium to make the historic announcement.

“To our knowledge, Eastman will be the first manufacturer in the United States to commercially produce a new generation of industrial chemicals from coal,” said Reid. “The significance of this new project is that it will change the raw material source for a number of Tennessee Eastman Company products from petroleum-related materials to coal.”

Carrying a price tag of approximately $500 million, the project represented Kodak’s single largest investment. Construction got under way in 1980 and continued for the next three years. And on June 19, 1983, Eastman debuted its chemicals from coal processes — a method that continues to draw new support and accolades today, 25 years after it began.

A Silver Anniversary

Bill Trapp remembers well the startup of the new coal gasification plant. Now director of Eastman’s Gasification Technology, Trapp was then a young engineer assigned in 1982 to the chemicals from coal process.

“Looking back on it, I don’t know how we had the guts to do it. I mean, we were replacing the major raw material which was the lifeline of Kodak at the time,” said Trapp on a recent tour at Eastman.

The new processes made up a big part of Eastman’s acetyl stream, producing chemicals used to make various products, from pain relievers to photographic film.

Eastman licensed the coal gasification technology from Texaco and decided to build the new plant in Kingsport due to its proximity to the coal fields of the Appalachian mountains.

The facility was built on Long Island, across the South Fork of the Holston River from the main Kingsport plant.

When it first came online, the new operation gasified about 900 tons of coal a day, supplying about half of Eastman’s acetyl needs through coal. The other half was still being produced from petroleum-related materials.

Then in 1991, the chemical end of the plant was expanded, and Eastman improved the efficiency of the gasifier and gas clean-up plants to produce 100 percent of the acetyl needs for the Kingsport site.

Today, the company’s coal gasification processes use about 1,300 tons of coal per day, plus another 5,000 tons of coal are used each day for the company’s power plant. That coal is shipped by rail from the Wise County area of Southwestern Virginia.

And while coal is traditionally viewed as a dirty material, coal gasification is known as a “clean coal” process that’s environmental friendly. Company officials say gasification removes harmful pollutants, including nearly 100 percent of sulfur, mercury and arsenic. Plus, gasification produces low air emissions, as well as low levels of collateral solid wastes and wastewater, and provides efficiencies for reducing carbon dioxide, along with low-cost carbon storage options.

Eastman has received various awards and recognition through the years for its gasification processes. And Eastman officials have testified before Congress about the technology and its potential for the future.

An attractive option

Need for an abundant supply of inexpensive raw material led George Eastman to Kingsport in 1920. Following World War I, the Kodak founder couldn’t find a sufficient supply of methanol for his photographic business based in Rochester, N.Y. He started searching for a new source, and discovered an abandoned wood distillation plant in the mountains of Northeastern Tennessee. He purchased the property, and Tennessee Eastman was born.

By the 1940s, the company determined it was more efficient to use raw materials derived from petroleum, and so in 1951, Eastman constructed a plant in Texas to be near the oil fields, providing a new supply of raw materials made from natural gas liquids. That was the beginning of Texas Eastman in Longview.

But with the oil embargo of the 1970s, the search for new raw material sources was once again underway.

“With the development of petroleum shortages in the past few years and the rise in the cost of natural gas, the cost of petroleum-related materials has escalated rapidly and Eastman has been engaged in an intensive search for technology that would permit us to use more abundant raw materials,” Reid said in a 1980 speech.

With each new challenge facing the company in its search for raw materials, a new chapter — and often new plants and processes — emerged.

Through its history, Eastman went from using wood as a raw material to petroleum, to natural gas liquids. By the late 1970s, coal seemed to fit the bill.

“We believe the most successful chemical companies in the future will be those which develop advanced technologies to move their operations toward lower cost feedstocks and fuels,” said Hart in a 1984 speech about coal gasification.

Hart said the project was actually conceived in the late 1960s when Eastman stepped up its energy conservation efforts and began searching for lower-cost feedstocks even before petroleum prices spiked. According to Hart, Eastman conducted a study in 1970, suggesting that declining domestic petroleum resources would make coal an attractive energy option as well as a chemical feedstock.

“In 1970, no one would foresee all of the events which have since reinforced the need to find alternative sources of raw materials. It was clear, however, that processes needed to be developed that could use these alternate sources,” Hart said.

By the mid 1980s, the price of crude oil had leveled off, and some industry experts balked at the idea of chemicals from coal, particularly since the process required large capital expenditures to start.

“I think there was definitely some skeptics when we first started,” Trapp said. “The big cost of gasification is the capital to build it to start with. But once you have it in the ground, your incremental operating costs are low.”

Today, crude oil is selling for more than $130 a barrel, and everybody — from big industry to consumers at the pump — is feeling the pinch.

The coal gasification naysayers aren’t saying much anymore.

“Now, we’re creating money compared to everybody else,” Trapp said.

A new chapter in Texas

Eastman’s coal gasification efforts have proven so successful, the company is now in the expansion mode.

Last July, Eastman Chairman and Chief Executive Officer Brian Ferguson announced the company would construct a gasification project in Beaumont, Texas, where local officials had approved an incentive package valued at about $100 million to close the deal.

The $1.6 billion plant should come online in late 2011 or early 2012. Trapp said the plant will be roughly five and a half times the size of the Kingsport gasification processes. Once completed, the Beaumont facility will employ about 250 people.

The Beaumont plant will use primarily petroleum coke as the primary feedstock to produce hydrogen, methanol and ammonia. Petroleum coke is a byproduct from petroleum refineries, and Eastman should have a ready supply of the material from Gulf Coast refineries to use in its gasification processes.

In announcing the new plant last year, Ferguson said gasification helps Eastman achieve a low-cost position and adds to the company’s earnings growth. And, he said, it’s good for the environment because the technology can minimize the carbon footprint vs. traditional manufacturing processes.

“And it’s good for the U.S. because we can use readily available domestic feed materials such as coal and petroleum coke, which are less expensive and more stable when compared to oil or natural gas,” Ferguson said.

“Gasification is an environmentally responsible choice,” he said. “As the first company to use gasification to produce commercial quantity chemical products from coal, we’ve developed a strong track record.”

That experience could help boost Eastman’s position among chemical companies into the future, particularly with crude oil prices continuing to skyrocket.

And although coal is not a renewable energy source, Trapp said the United States has enough coal to last another 250 years. In comparison, this country has a natural gas supply that will last only 40 more years, he said.

“So coal will last a lot longer than natural gas. But coal won’t last forever. There has to be another solution out there. But in the short term, there is no other answer — you better be using coal, and you better use it cleanly. And that’s gasification,” Trapp said.

And with its vast coal reserves, the U.S. would benefit greatly if the chemical industry, like Eastman, recognized coal as the answer to its raw material and energy needs, Trapp said.

He pointed out the United States has the greatest abundance of coal in the world. The state of Illinois, for instance, has more coal than Kuwait and Saudi Arabia have oil combined, he said.

“If you consider coal, it’s right here. You can transform the chemical industry and keep it here. If you don’t do gasification, it (the chemical industry) will all eventually move away,” Trapp said.

“So this is a good U.S.A. story as well as a good Eastman story.”

Trapp, whose career has focused on producing chemicals from coal through gasification, said he’ll be in Beaumont for the startup of the new plant there, and will remember fondly that day in June 1983 when the Kingsport coal gasification process became a reality.

“The startup of the gasification plant was the hardest work I’ve ever done, but the most rewarding work I’ve ever done,” Trapp said. “It was the highlight of my career.”

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