Chemical and petrochemical products are so central to manufacturing that it’s hard to find examples of goods that don’t involve them at some point in production. From primary chemicals used in manufacturing to end-consumer goods, the chemical and petrochemical industry’s products span plastics, packaging, fertilizers, electronics, cleaners, disinfectants, pharmaceuticals, automotive parts, construction materials, clothing, and so much more. With so wide a range of products, the chemical industry tends to see industry trends reverberate in complex ways. Add to this a close proximity to the oil and gas industry, and a dependence on water- and energy-intensive processes, and it’s clear that the petrochemical and chemical companies will likely see some big changes in the coming years and decades.
Here, we’ll explore major industry trends, and take a particular look at how these trends are likely to impact water use for petrochemical and chemical companies in the years ahead.
Three major trends in the chemical and petrochemical industry
Growth and market volatility
Given the ubiquity of chemical products in day-to-day life, it doesn’t take any real stretch of the imagination to see how major world events might trigger ripple effects within the chemical and petrochemical industries. Such is our present moment—in the midst of a global pandemic, a green revolution, and disruptive geopolitical events—chemical companies have seen unprecedented volatility in demand for their various products over the last few years. As noted in an analysis by PwC, for example, at the start of the COVID-19 pandemic, demand in the automotive, transportation and consumer products sectors all saw significant declines, while demand for chemicals used in pharmaceuticals, food, and disinfectants skyrocketed. As economies have reopened, demand for products such as automotive and construction materials has increased, though ongoing supply chain issues have added further complexity to manufacturers’ ability to increase production in line with consumer demand.
Despite volatility in demand for specific types of products, the chemical and petrochemical industries are expected to see long-term growth overall. According to a 2018 report by the International Energy Agency (IEA), this growth trend is largely due to an increasing use of plastics and fertilizers among developing economies, which is expected to accelerate in the coming years.
Decarbonization is a growing trend across all industrial sectors—and the chemical and petrochemical industries are certainly no exception. In fact, a recent analysis by Deloitte places decarbonization and sustainability among top concerns for the chemical industry. Whether due to pressure from investors, regulatory bodies, consumers, or all of the above, it is likely that such environmental, social, and governance (ESG) factors will see increasing emphasis in chemical companies’ strategic plans in the years to come.
Sustainability initiatives may look quite different from one organization to the next, and may include anything from research and development of more efficient processes and technologies, to capital investments that allow facilities to cut water and energy use, or transition to renewable energy sources. It may also mean changing asset portfolios and product offerings to meet consumer demand, such as by reducing production of single-use plastics in favor of recycled products and closed-loop systems.
Sustainability initiatives tend to center on reducing reliance on fossil fuels, and phasing out products derived from them, like plastics. And while such decarbonization trends would seem to indicate a waning demand for some petrochemical products, the transition to renewables may actually increase demand for certain petrochem products because they are used in things like solar panels, wind turbines, and batteries.
Emerging tech and digitalization
New technologies are becoming available all the time, many of which carry the potential to transform how industrial facilities operate and produce goods. Among these are advanced sensors and analytics technologies that collect and produce valuable business intelligence (BI) data. Facilities are increasingly leveraging these kinds of data to improve process efficiency, reduce waste, and make better use of resources. This trend, known as the digital transformation, has already had broad impacts across industry. To date, however, the petrochemical and chemical industries have been relatively slow to embrace emerging tech. As such, some analysts expect the chemical industry to ramp up digitalization in coming years.
And the technological advancements don’t stop with gadgets and elaborate data systems, either. One key area of change is the research and development of new processes for producing common chemical products. Traditionally, the petrochemical industry has used oil and gas as feedstock for production of many plastics and chemical products, such as ethylene, propylene, isopropyl alcohol, ethanol, methanol, and ammonia. But new processes are on the rise that allow chemical companies to manufacture their products from alternative feedstocks that offer greater affordability, sustainability, safety or accessibility. An example of this is a new method for producing ammonia that leverages water electrolysis, instead of the conventional route of converting oil or natural gas. A similar process uses hydrogen as a feedstock for production of primary chemicals such as methanol, ammonia, or other materials used to make plastics. These types of developments may well see greater adoption as chemical producers seek to fulfill sustainability goals, and adapt to changes in resource availability.
Water use in the chemical and petrochemical industries
Compared to other industrial sectors, chemical and petrochemical companies are moderately water-intensive. The most obvious water uses include those directly related to production, such as cleaning and flushing of equipment, steam generation, distillation, cooling, extraction, and as feedstock. But there are other indirect water uses resulting from the fact that chemical and petrochemical industries consume lots of energy to power their operations, and energy generation is itself highly water-intensive. In fact, by the IEA’s estimate, indirect water use accounts for 75% of the total water impact of the petrochemical industry.
Looking ahead, competing trends in the chemical industry make it difficult to forecast definite patterns in water use. On the one hand, projected growth trends would likely increase water use within the chemical industry. But other trends might have conflicting impacts. For example, the rise in the use of alternative feedstocks (e.g. water or hydrogen) may drive water use upward, but it would also reduce the amount of water used for extraction and processing of conventional feedstocks derived from oil and gas. Similarly, since different chemical products vary in terms of the amount of water needed to produce them, shifting demand may result in net increases or decreases in water use depending on which primary chemicals or products companies choose to produce.
While these industry trends introduce some uncertainty to companies operating in this sector, there are still some dominant trend lines that broadly impact industry—namely, environmental concerns, as well as the availability and cost of water and other resources. These alone are compelling reasons for chemical companies to begin considering strategies to reduce water use.
As such, petrochemical and chemical companies alike would do well to evaluate and reduce their water use, whether through water reuse strategies, implementing water conservation devices, or modifying process lines to incorporate more efficient approaches.
How can SAMCO help?
SAMCO has over 40 years’ experience custom-designing and manufacturing water treatment systems designed to conserve water resources, so please feel free to reach out to us with your questions. For more information or to get in touch, contact us here to set up a consultation with an engineer or request a quote. We can walk you through the steps for developing the proper solution and realistic cost for optimizing water use in the chemical and petrochemical industries.
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