Post on 21-Aug-2020
transcript
NTransforming American Industry through Alternative Materials
MARK COSTASenior Vice President
Corporate Strategy and Marketing
Eastman At-A-Glance• A global manufacturer of chemicals,
plastics and fibers
• Leading producer of differentiated coatings adhesives, and specialty plastics products
• One of the world's largest manufacturers of PET polymers for packaging
• Leading supplier of cellulose acetate fibers
• 2006 sales revenue of $7.5B
EASTMAN Chemicals from Wood (1920)
Chemicals from Coal (1983)
Eastman Chemical CompanyAt-A-Glance
Coal Gasification based since 1983
Strong, Consistent Acetyl Stream Earnings An Industrial Gasification Competitive Advantage
2001 2002 2003 2004 2005
Acetyl Stream
Olefins and Polyester Streams
~ 20% of products based on gasification, but…
~ 50% or more of earnings based on gasification
East
man
Che
mic
al C
ompa
nyO
pera
ting
Earn
ings
The Costliest ComponentCommodity Chemical Costs
Conversion Costs(including energy costs)
Logistics
Raw Materials Costs
$0
$2
$4
$6
$8
$10
$12
1990 1992 1994 1996 1998 2000 2002 2004 2006$0
$10
$20
$30
$40
$50
$60
$70
$80
Crude$/bbl
Natural Gas $/MMBTU
Crude (West Texas Intermediate) Natural Gas (Houston Ship Channel)
Rising Costs of Conventional Raw Materials
Note: All prices are in constant 2007 dollars (YTD October)Source: Eastman, Global Energy Decisions
U.S. Industry Options
• Close Shop
• Move Out
• Transform American Industry
Impact to the Ammonia & Methanol Industries(Since 2003 – Approximately 20 Ammonia and 6 Methanol Plants Closed)
Illustration OnlySources: U.S. Geological Survey, Mineral Commodities Summaries, 2007
Chemical Economics Handbook - SRI Consulting, 2007
Ammonia PlantsMethanol Plants
The Exodus
“ Through the worst downturn in industry history, the North American chemical industry vowed never to build a world-scale chemical plant again.”
--Joseph Chang, EditorICIS Chemical Business magazine
(August 6, 2007)
The Exodus
Eastman Announced
Plants!
Source:ICIS Chemical Business
Eastman's Answer
• Transform the Company through Industrial Gasification of Alternative Domestic Materials– Coal– Petcoke– Biomass– Secondary Recycled Materials
$0
$2
$4
$6
$8
$10
$12
1990 1992 1994 1996 1998 2000 2002 2004 2006$0
$10
$20
$30
$40
$50
$60
$70
$80Coal & Petcoke vs. Conventional Raw Materials
Natural Gas, Coal & Petcoke $/MMBTU
Crude$/bbl
Industrial Gasification is AdvantageousCoal/Petcoke: Lower Cost & Less Volatile
The spread is large and growing…
Note: All prices are in constant 2007 dollars (YTD August)Source: Eastman, Global Energy Decisions
Crude (West Texas Intermediate) Natural Gas (Houston Ship Channel)Coal (Illinois Basin) Petroleum Coke
Industrial Gasification is AdvantageousU.S. has more than 25% of the World's Coal Reserves
0%
10%
20%
30%
40%
50%
Coal Crude Oil Natural Gas
U.S.Non-U.S.
% o
f Tot
al W
orld
Res
erve
s U.S. has 250-plus year supply of coal(largest single-nation fossil reserves on earth)
Source: International Energy Agency and Dept. of Energy Information Adm. (EIA)
Coal Gasification is AdvantageousEnvironmentally Friendly Choice
0
0.01
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0.1
SCPC (FGD/ESP/SCR) IGCC (MDEA, No SCR) Industrial Gasification (IG)
NOxSO2Particulates
Lb/M
MB
tu
Lower air emissions and water usageLower solid wastesInexpensive mercury removalMuch lower costs for CO2 capture
Gasification Advantages
SCPC and IGCC Source: EPA Report – "Environmental Footprints and Costs of Coal-Based IGCC and PC Technologies", July 2006
Carbon Capture and Compression Costs(per metric ton)
$20
$40
$10 $8-10
$0$5
$10$15$20$25$30$35$40$45$50
Pulverized Coal IGCC Coal to Liquid IndustrialGasification
Source: MIT’s The Future of Coal, 2007Note: Does not include pipeline transportation and injection costs
The Challenges
• High Capital Costs• Reliability Concerns• Financing Issues• Economies of Scale• Off-take Agreements & Market Risks
1989 2006
Eastman's Performance HistoryAnnual Syngas Production
Continual Process Improvement
New Production Record!
Eastman's Gasification CredentialsDemonstrated Best-In-Class Performance (sustained high reliability)
Industry Start-up History
0102030405060708090
100
Plan
t Ava
ilabi
lity
%
Eastman
Average Industry Range of Performance
A
1 2 3 4 5 6 7 8Years from Mechanical Completion
9 10 11
Source, excluding Eastman data: J. Phillips, EPRI, "Integrated combined cycles with CO2 capture", GCEP research symposium, Stanford University, June 13-16, 2005.
CoalCoal
Petroleum CokePetroleum Coke
Gasification
Removal of: Sulfur,Mercury, Arsenic & Other Components
Carbon Dioxide
Ultra-CleanSyngas
Methanol
Enhanced Oil Recovery (EOR)or other sequestration options
EMN Strategic Chemicals
HydrogenBaseload
Hydrogen
Ammonia
Eastman's Strategy for Growth:
The Future is Here.
Right Now.
Thank you for your attention!
www.eastman.com