OAR Box 1878 

Prepped by Charmelle Mathews 

Document Number: 

67) 11-1-46 

Docket Number: 

A-90-19 

Printed 11/28/2008 11:47:27 AM Sheet 67 of 68 

p.1 
P.2 

A-90-19 

AUGUST 1988 

- Pr.viou.IUpo*- March 1985 ETHYLENE OXIDE 

FOCUS....Ethylene oxide (EO), produced by the direct oxidation of ethylene, is a major chemical intermediate primarily used captively to make other chemicals, particularly ethylene glycol. Many derivatives of EO 

are themselves used as intermediates. Ethylene oxide is a raw material in the ethoxylation of glycols, 

alcohols, fatty acid condensation products, starches, surface active agents, and ammonia. EO is also an 

excellent fumigant as it is non-corrosive to metals and does not effect sensitive materials. Other uses of 

ethylehe oxide include sterilization, gasoline sweetening, and acid stabilization. 

All EO end uses are essentially captive to EO producers except for the ethoxylates, where merchant 

buyers of EO are significant. Nonionic surfactants derived from EO have had increased usage in liquid 

detergents. Heavy duty-liquid detergents for household lsundry use have grown from about 15% of the total 

detergent market in 1978 to 40% in 1988. Ethoxylate producers have had difficulty in supplying increased 

demand caused by the swing to liquids which use greater quantities of nonionic surfactants* The merchant 

market for EO for making ethoxylates has not been growing as fast as the overall market because of economics and limitations on supply of EO. Because of the potential hazards of shipping bulk quantities of 

EO, some producers have reportedly limited shipments to areas immediately proximate or within 50 miles of 

the production point. Reportedly, at least one producer may drop out of the EO merchant market in 1989. 

Merchant sales of EO generally account for less than 15% of US demand. Sales of EO for ethoxylation 

end uses probably account for approximately 70% of the total EO merchant market. A critical specific end 

use for ethylene oxide in the merchant market is as a sterilant/fumigant in the health product and medical 

fields. Ethylene oxide is used to sterilize food products, surgical bandages, and other heat sensitive 

materials and, as such, may be the only efficient and effective sterilant in these sensitive applications. 

This end use, which accounts for less than 5% of the EO merchant market, is potentially vulnerable because 

of the growing concern about the possible toxicity of ethylene oxide as well as concerns about the chlorofluorocarbon (CFC) propellant used with EO. EO does the sterilizing and CFC keeps it nonflammable. There 

is pressure to regulate CFC's in medical sterilization. A process to recover CFC-12 from the EO sterilant 

used in the medical-device and spice industries has been proven commercially feasible. This reduces CFC 

emissions, and eventually converts used EO to EG. 

OUTtOOK....EO overall (worldwide) demand will grow with demand for EG, at about 2-4% per year into the 

1990's.' Future consumption of glycol in antifreeze is expected to be static or decline. Long-term US 

annual demand growth for MEG used in polyester fibers will probably moderate to about 2%. Future significant growth for EG will be in PET plastics, particularly in beverage bottles. PET plastics increased from 

less than 5% of EG consumption before 1970 to sbout 25% by 1988. With mature markets for uses other than 

PET plastics, no significant growth can be expected. The glycol ethers are under continual pressure from a 

health or environmental standpoint and are expected to lose markets in solvent applications. 

The merchant market for EO will change somewhat in the future if some of the smaller merchant producers of ethoxylstes for use in detergents lose market share to integrated producers. Smaller companies 

purchasing EO may not be able to meet more rigid oxide exposure standards, and may give this business up 

to integrated producers with better handling capabilities and economics. 

PRICING....Until the shortages of 1988/1989, the list price for EO & EG has been almost meaningless. 

AVERAGE PRICE RANGE - ETHYLENE OXIDE 

Cents Per Pound - Tanks - FOB - (Merchant Market) 

1960 1965 1970 1975 1980 1984 1985 1986 1987 1988 1989 1991 

Trade List TS j 13] " 9 ~Vi\ ~39T 35 35 35 35 60 60 40 

Avg. Sales 26 34 26 21 21 20 

SUPPLY AM) DEMAND....Mi 11 ions of Poinds....Estimated....Domestic US 

1960 1965 1970 1975 1980 1984 1985 1986 1987 1988 1989 1991 

Capacity 1600 2450 4240 

Production 1379 2190 3865 

Mer. Sales 

Imports 

Exports 

Demand 5140 5686 5391 5405 4777 5154 5^00 5400 

In some recent years, particularly 1987 and 1988, production of E0 as reported by the USITC may be 

considerably understated based on reported and estimated data for output of E0 derivatives. Trade 

sources estimate total U5 E0 production in both 1987 and 1988 was probBbly in the range of 6.0 

billion pounds instead of the 4.8 and 5.1 billion indicated in the above table based on USiTC data. 

AVAILABILITY....In the early 1980's, poor profitability and competition for derivative ethylene glycol 

from new plants in Canada, Saudi Arabia, and the Far East forced US E0 producers to shut down inefficient 

or excess capacity. Idling North American plants, coupled with capacity rationalization in the UK and 

Western Europe, improved the supply/demand balance until shortages developed in 1987-1988. In the US in 

1988, 01 in and Union Carbide restarted capacity which had been on backup. In phases, Union Carbide may add 

as much as 1.2 billion pounds per year of E0 capacity. The first phase will add 155 million pounds by the 

end of 1989 through debottleneckino in Texas and Louisiana. Dow Chemical Canada may also increase E0/EG. 

Expansions are also planned overseas. In Spain, Shell Co.'s subsidiary Industrias Quimicas Asociados 

is expanding by 25% to 90,000 mt/year. In Venezuela, Olin with 25% of a joint venture is developing a 

30,000 mt E0/EG complex to come on stream in 1990. In China, Technip of France plans to complete a 50,000 

ton per year E0 and 40,000 ton EG facility for China National Technical Import Corp. 

2/87 

5059 

4467 

409 

6385 

5220 

531 

6 

86 

5140 

6610 

5699 

512 

12 

25 

5686 

5815 

5430 

615 

23 

62 

5391 

5690 

5430 

568 

3 

28 

5405 

6430 

4785 

671 

28 

36 

4777 

6785 6940 

5140(E) 

32(E) 

18 

5154 5^00 
« 

a 

a 

•PRODUCER 

United States: 

• SftSF 

Cain Chemical 

Dow 

PRODUCERS AND CAPACITIES 

LOCATION 

Geismar, LA 

Bayport, TX 

Plaquemine, LA 

Hoechst Celanese Clear Lake, TX 

Olin 

PD Glycol 

Quantum (USD 

Canada: 

Dow 

Union Carbide 

Brandenburg, KY 

Beaumont, TX 

Morris, IL 

Fort Sask., Alta. 

Montreal, Que. 

- ETHYLENE OXIDE - MILLIONS OF 

CAPACITY 

480 

550 

500 

460 

110 

520 

240 

400 

165 

PRODUCER 

Shell 

Sun Refining 

Texaco 

Texas Eastman 

Union Carbide 

Union Carbide 

POUNDS - 198B 

LOCATION 

Geismar, LA 

Claymont, DE 

Port Neches, TX 

Long view, TX 

Seadrift, TX 

Taft, LA 

TOTAL UNITED STATES: 

Union Carbide 

TOTAL CANADA: 

Prentiss, Alta. 

CAPACITY 

800 

100 

845 

210 

670 

1300 

6785 

415 

980 

P.3 

USI (now QuBntutn Chemical) bought Enron Chemical in 1986. In mid 1988 Olin restarted its EO unit 

which had been shut down since 1986. Texaco reportedly restarted a 145 million pound unit at Port 

Neches in late 1988. Cain Chemical, now a division of Occidental Chemical Co., purchased the EO/EG 

business from ICI Americas in 1987. PD Glycol was a PPG/DuPont 50/50 joint venture. In 1987, Cain 

bought PPG's interest. Carbide has restarted about 650 million pounds of EO capacity at Taft, LA 

which was placed on backup in 1984 as a production unit started up in Alberta. A few years ago, Dow 

ended production of EO at Freeport, TX. In addition to North American E0, Dow has EO/EG facilities 

in the Netherlands. In 1987, Sun Refining & Marketing Co. bought all outstanding shares of joint 

venture Sun Olin Chemical from Olin. Drummed E0 is sold by the ARC chemical division of Balden Corp. 

EM) USES....Ethylene oxide (E0) is a highly reactive, colorless, low-boiling liquid or gas with an etherlike odor. E0 is an important chemical intermediate for the production of ethylene glycols, ethanolamines, 

and glycol ethers, as well es a broad range of surface active agents. It is also used as a sterilizing 

agent and fumigant. Less than IS of total US E0 is consumed in the health products and medical field. The 

largest outlet for E0 is the production of hydrated derivatives — the glycols. Monoethylene glycol (MEG) 

accounts for over 60S of E0 consumption with di-, tri-, and polyethylene glycols taking approximately 10S. 

Ethyoxylated materials are used as surfactants and detergents. Most nonionic surfactants are made by 

condensing a hydrophobe and ethylene oxide and then adding more E0 molecules to give a water-soluble 

product. Several kinds of hydrophobes are used, such as fatty alcohols and acids, amines, and amides. 

Ethanolamines are used for detergents and gas purification. Glycol ethers have solvent applications. 

Except for ethoxylate manufacture, chemical intermediate uses for E0 are essentially captive and 

carried out by producers of oxide. While EO producers are major factors in the ethoxylate business, there 

is also a substantial but declining merchant market for E0 used to make ethoxylates in North America. 

END USE PATTERN - 1988 ESTIMATE 

DERIVATIVE 

Monoethylene Glycol 

Higher Glycols 

Ethoxylates 

PERCENT 

65 

10 

10 

DERIVATIVE 

Ethanolamines 

Glycol Ethers 

Miscellaneous 

PERCENT 

5 

5 

5 

MANUFACTURING....Ethylene oxide (E0) is produced from ethylene using either air or oxygen as the oxidizing 

agent. The E0 process currently practiced by all major technologies involves the direct vapor phase oxidation of ethylene over a silver catalyst. Carbon dioxide and water are the only significant by-products. By 

selecting appropriate operating conditions, modern reaction systems maintain selectivities (mols ethylene 

oxide formed per 100 mols ethylene reacted) in the range of 65S to 7555 for air-based and 70S to 80S for 

oxygen-based processes. High reaction efficiencies are achieved by operating with low ethylene conversions 

per pass and a moderated reaction. The recovery and refining systems are the same for air and oxygen. 

Ethylene oxide is recovered as a crude aqueous solution which can be sent directly to a glycol plant to 

produce specification ethylene glycol by hydration, or fractionated to produce pure E0. Except for smaller 

plants or special raw material and cost situations, most modern plants employ oxygen rather than air oxidation. Oxygen based plants can yield 1.2 pounds of E0 per pound of ethylene feed. 

The original commercial E0 technology was the chlorohydrin process using stoichiometric amounts of 

chlorine and an alkali. All early E0 manufacturers were in the chlor-alkali business. When direct oxidation became commercialized, some chlorohydrin capacity was converted to propylene oxide production. Dow 

currently makes P0 via chlorohydrin. Areo employs a direct oxidation route for P0. 

A variety of new process concepts for EO/EG are being developed based on such raw materials as synthesis gas and ethanol. These could become feasible depending on future relative ethylene values. 

ENVIRONMENTAL ASPECTS...,E0 gas is highly flammable. Prolonged contact causes skin and eye irritation and 

inhalation of high concentrations can cause nausea, vomiting, lung edema, and general anesthetic effects. 

In addition to short-term effects, investigations in recent years suggest that E0 may be a potential human 

mutagen or carcinogen and may cause leukemia at low airborne vapor concentrations. 

The major concern about toxicity of E0 centers on the relatively minor quantity consumed as a sterilant in health care and medical products. In sterilization applications, E0 concentrations near malfunctioning and poorly designed equipment may reach excessive transitory levels. On the other hand, there is 

only limited concern about exposure in commercial chemical synthesis. Due to the explosive and reactive 

nature of EO, the systems involved in its manufacture, storage or derivative manufacture are tightly 

closed and keep concentrations in the atmosphere at low levels. In 1984, the US Occupational Safety & 

Health Administration set a standard of one part E0 for each one million parts of air, for an eight-hour 

workday, compared with the existing limit of 50 ppm set in 1971. In 1988, OSHA set a short term exposure 

limit of 5 ppm over a 15 minute period-Tor workers in the chemical, health care and spice industries. 

To the best of our knowledge, the information contained herein is accurate. However, we 

do not assume any liability whatsoever for the completeness or accuracy of this report.