Sino, Saudi, Dow, Chemicals and Coal

By May 18, 2007Energy, Trade

For all the unhappiness here in the United States with China’s trade and business practices — issues with which the NAM is deeply engaged — there are still many areas where economic cooperation is strong and growing. Take clean-coal for example:

China’s leading coal miner Shenhua Group and US-based Dow Chemical Company have signed an agreement for a clean coal plant in China, state media said Wednesday.

The project will use “clean coal” technologies that convert coal to methanol to produce ethylene and propylene, the building blocks of various plastics and chemical products, the China Daily reported.

“This project aligns with Dow’s strategy to invest in growth geographies like China,” said Andrew Liveris, chairman of Dow. “It will build Dow’s competitive position to serve customers in Asia with locally produced products and solutions.”

The agreement was signed on Monday, bringing the two parties one step closer to building a world-class coal-to-chemicals complex in northwest China’s Shaanxi Province, said a statement posted on Dow’s website.

Dow’s news release on the project is here. And The Department of Energy issued a news release on U.S.-China coal cooperation last December.

This is all very promising for U.S.-China trade relations and development of environmentally sensitive technologies of great value worldwide, including the United States.

Meanwhile, Dow is also involved with a huge chemicals manufacturing project in Saudi Arabia.

The Ras Tanura petrochemical joint venture would take years to complete and be operationally integrated with Saudi Aramco’s Ras Tanura refinery complex and its Ju’aymah gas processing plant, which would supply raw material, Dow said in a statement…

[The] new business would produce a broad range of products, including ethylene and propylene, the building blocks used in the production of various plastics and chemical products.

Time to mention the new Manufacturing Institute study, a survey of U.S.-based chemical manufacturers that shows companies moving offshore to take advantage of lower energy costs.

A complicated world…with good news, bad news and mixed news at every turn, especially when it comes to China.

But unadulterated congratulations to Dow for its business acumen, foresight and investments. And great good luck on the clean-coal project. The United States needs that technology to take off, and the world will benefit if coal-hungry China cleans up its act.