OAR Box 1872 

Prepped by Keeia Richards 

Document Number: 

30) 11-1-79 

Docket Number: 

A-90-19 

Printed 11/26/2008 8:51:50 AM Sheet 30 of 204 

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JANUARY 1990 

Previous Report — March 1988 

A-90-19 

II-I-79 

BUTADIENE 

FOCUS....Butadiene is the primary raw materiel for synthetic rubber, used principally for making over-theroad tires. It is also used to make other elastomers, polymers end plastic materials. Additionally, butadiene is e chemicel intermediate in the synthesis of hexamethylenediamine. US output of butadiene now exceeds 3.0 billion pounds, with 1988 totel US demand slightly in excess of 3.8 billion pounds. In the 1985-

1986 period, apparent US consumption of butadiene dropped sharply as demand for US made automobiles end 

other 'vehicle tires declined, leading to reduced demand for domestically produced original equipment and 

replacement tires. The resurgence in US demand well into 1989, within a strong economy, may well signal 

the high water mark for US butadiene consumption. 

Since various synthetic rubbers account for ebout 70S of total US butediene requirements, demand 

changes for ABS (acrylonitrile-butadiene-styrene) plastics, nylon raw materials, styrene-butadiene latex, 

and other non-rubber derivatives have only limited impact on overall consumption. Most non-rubber derivatives are mature with relatively static demand patterns that often fluctuate with economic conditions. 

Hexamethylenediamine, a raw material for nylon 66, reflects the health of construction and transportation 

which dictate consumption of nylon carpets. Styrene-butadiene latex is used in adhesive and coating applications as well es concrete modification. In plastic molding, ABS growth has slowed in recent years. 

OUTLOOK....Although US consumption of butediene increased dramatically in 1987 and 1988, long term demand 

for butadiene will.continue to decline with reduced requirements for synthetic rubber because of quality 

and performance improvements'in automobile and other road tires. For more than a decade, worldwide consumption of styrene-butadiene and butadiene rubber declined as the marketplace wes influenced by the 

increased use of radial tires, lower speed limits, and the introduction of smaller vehicles. In recent 

years, performance improvements for tires hsve begun to cut demand for rubber snd raw materials. It has 

been estimated that current passenger tires consume, on average, 3.4 metric tons of polybutadiene and 

styrene-butadiene rubber every thousand units. New compositions and designs for radial tires may more than 

double the anticipated mileage for e single original equipment factory installed tire. If these new tires 

lest for close to the life of the vehicle, they will drastically reduce the replacement tire market which 

accounts for ebout 75S» of US end 50% of European tire demand. The increased availability of natural 

rubber, principally because of overplantinq. could also reduce demand for butediene. 

Although starting from a small base, there are some newer butadiene applications that will experience 

relatively repid growth in future years. Liquid hydroxyl-terminated homopolymers of butadiene are used 

primarily in polyurethanes for sealants, waterproof membranes, electrical encapsulsnts end Bdhesives. 

These ere finding new specialty applications. Methyl methacrylate-butadiene-styrene (M3S) impact modifiers 

end processing aids for the plastics industry are another specialty product line enjoying rapid growth. 

PRICING....Historically, butadiene velues were readily predicted when significent quantities were produced on purpose. Currently, with extraction from ethylene coproduct streams accounting for almost 9555 of 

output, it is more difficult to define costs. Relative coproduct values of ethylene production depend on 

the type of US feedstock used. During 1988, butediene prices dropped precipitously to below 15 cents as 

coproduct was readily available. As US prices declined the amount of imports coming into the US was 

reduced Bnd the co-crecking of C4 streams in Europe picked up. The reduced imports and the temporary 

outages at some major US Gulf Coast olefins plsnts caused shortages in the first half of 1989 and prices 

increased to ebout 20-21 cents by mid-year, then further strengthened to 23 cents by yeBr end. 

AVERAGE PRICE RANGE - BUTADIENE - REFINED 

Cents Per Pound - Bulk - FOB Plant - Gulf Coast 

««»«*«#«*#«#*##««««#««*##««« HISTORICAL «•••**«**««««*«*«<*««**«<*#« 

Trade Liat 

Avg. Sales 

1960 

T2T75 

12.9 

1965 

TTT75 

10.0 

1970 

8.7 

1975 

15775 

16.5 

1985 

~2B~ 

33 

•** PROJECTED ••'•* 

1989 1990 1992 

• ~TT ~W ~W 

* 20(E) 

SUPPLY AM) DEMAND....Millions of Pounds....Estimated....Domestic US 

«**•««*««.**«*««*««•««««««««« HISTORICAL 

1960 

Capacity 

Production 1883 

Import8 

Exports 

Demand 1883 

1965 1970 

T O W 7250" 

2685 3101 

114 

2685 3215 

1975 

*2~f0" 

2597 

460 

73 

2984 

1980 

77T0" 

2799 

576 

130 

3245 

1985 

T7u7f 

2340 

584 

187 

2737 

1986 

392T 

2546 

426 

180 

2792 

1987 

7510" 

3002 

823 

150 

3675 

1988 

T55D" 

3169 

779 

132 

3816 

*•• PROJECTED •••• 

1989 1990 1992 

* 1550" STDTJ 

* 3100(E) 

* 550(E) 

* 15(E) 

* 3635(E) 3500 3300 

AVAILABILITY....Despit e some short term butediene supply dislocations, no extended supply problems are 

anticipated for the next few years. There is excess US capacity which can be utilized if price and economics justify. There is currently also excess capacity in Europe which can be utilized for shipment to the 

US or the Far East if the price is acceptable. The supply overhang will be even greater if Texas Petrochemicals proceeds with their announced intention to reactivate a 500 million pound per year idled extraction unit in 1990. In the US, although some facilities may be placed on standby, there should be adequate 

butediene capacity either as a coproduct or by dehydrogenation of butylenes. As US imports decline over 

the next few years, there will probably be a growing butadiene surplus in Europe. The European surplus can 

probably be disposed of by co-cracking mixed C4 streems. 

Overseas, there ere new facilities being built. As en example, in Italy Marghera Butadiene, a joint 

venture of Italy's Montedipe and Japan's Nippon Zeon (NZ) and Mitsui & Co., has built 8 60,000 metric ton 

per yeer butediene plant et Porto Marghera, Venice. Montedipe, the petrochemical arm of Montedison, 

supplies the plant with C4 from its Porto Marghera complex. 

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PRODUCERS AND CAPACITIES - BUTADIENE - MILLIONS OF POT1DS 

PRODUCER 

Amoco 

Exxon 

Exxon 

Lyondell 

Mobil 

Occidental Petrochemical (Cain) 

Occidental Petrochemical (Cain) 

Shell 

Shell 

Texaco 

Texas Petrochemicals 

LOCATION 

Chocolate Bayou, TX 

Baton Rouge, LA 

Baytown, TX 

Channelview, TX 

Beaumont, TX 

Corpus Christi, TX 

Chocolate Bayou, TX 

Deer Park, TX 

Norco, LA 

Port Neches, TX 

Houston, TX 

TOTAL 

\ • 

V "''•. 

I9B9 CAPACITY 

—m 

350 -

250 

500 

80 

220 

130 

250 

500 

600 

BOO 

3880 

Based on trede estimates of effective extraction capacity. Dow Chemical shut its 45 million 

pound captive plent in Freeport, TX in July 1987. Texas Petrochemicals is the only producer 

with on-purpose butylene dehydrogenation capacity which is run to meet market needs. 

END USES....Butadiene, en unsaturated hydrocarbon, exists in two isomers, of which 1,3 butadiene is 

commercially important. This olefin is a gas at ordinary temperatures and readily forms many products, 

principally ^.several elastomers end rubbers. The rubbers include 6tyrene-butadiene (SBR), poly butadiene, 

chloroprene. and nit rile. ,.• Polychloroprene (neoprene) and nitrile (ecrylonitrile-butediene) ere specialty, 

elastomers. Chloroprene hes good resistance,to oil, heat and weather. Nitrile rubbers ere resistant to 

oila, gaaoline, abrasion and heat aging. Synthetic rubbers account for about 70S of US butadiene consumption. Motor vehicle tires use 60-65% of SBR with mechanical rubber goods for automotive and industrial 

usee such as belts, gaskets, and hoses accounting for the balance. Polybutediene rubber, the second largest derivative, is used principally for tire treads. The increasing use of longer lasting radial tires, 

coupled with smaller tires for downsized automobiles, end lower mileage, causes reduced overall butadiene 

consumption. 

Styrene-butadiene latex and acrylonitrile-butadiene-etyrene (ABS) plastic resins are significant nonrubber polymer derivatives. Liquid hydroxyl terminated straight chain homopolymers of butediene are used 

to provide flexibility to adhesives, caulks and similar products. Miscellaneous uses include copolymers 

with maleiO'anhydride and plastic impact modifiers such ss methyl methacrylate-butediene-styrene polymers. 

As a chemical raw materiel, DuPont produces hexamethylenediamine, an intermediate for nylon 66, from 

butadiene via the intermediate adiponitrile. 

END USE PATTERN - 1989 ESTIMATE 

DERIVATIVE 

Styrene-butediene Rubber 

Polybutediene Rubber 

Chloroprene Rubber 

Nitrile Rubber 

PERCENT 

~^n— 

21 

7 

3 

DERIVATIVE 

Hexamethylenediamine 

Styrene-butadiene Letex 

ABS Resins 

Miscellaneous 

PERCENT 

—TD — 

10 

8 

4 

MANUFACTURING....Essentially all US production of butadiene now involves extraction from a variety of 

streams obtained in the steam cracking of hydrocarbons to yield olefins. Small amounts of butadiene ere 

elso produced by _the dehydrogenation of butylenes made in refineries or es byproduct in olefins 

production. Production of on-purpose butadiene by oxy-dehydrogenation however, has been discontinued in 

the US for economic reasons. Only Texas Petrochemicals intermittently operetea about 350 million pounds of 

dehydro capacity out of a potential 800 mm. lbs. of existing capacity. Some butylene is made available in 

the production of MTBE. The normal feedstock for MTBE is a Raffinate 1 stream containing both iso end 

normal butylene. The isobutylene is extracted in the MTBE process and the normal butylene is left as a byproduct and suitable for further processing. Raffinate I streams are the "leftovers1* from conventional 

butadiene extraction from olefin plant C4 cuts containing primarily butadiene and mixed butylenes. 

The feedstock used in steam crackers to make ethylene determines the relative yield of butadiene. The 

heavier the feedstock the higher the butadiene production. Steam cracking of naphtha yields 0.14 to 0.17 

lbs. of butadiene per lb. of ethylene, whereas cracking ethane yields only 0.03 lbs. In Europe, where 

naphtha continues to be the major steam cracker feedstock, the yield ia much higher than in the US. It is 

anticipated that more naphtha will be cracked in the US as the lead phasedown of gasoline accelerates, 

increasing the availability of low octane naphtha, normally undeaireable in gasoline blending. 

There are varying techniques for butadiene extraction. Extractive distillation using solvents such as 

acetonitrile, N-methylpyrrolidone, dimethyl formamide, or dimethylacetamide is common. In extrective 

distillation, butadiene dissolves preferentially in an aqueous solution of the solvent. The butadiene/solvent mixture is withdrawn from the bottom of a distillation column efter removal of other butenes. In a 

second column, butadiene is separated from the solvent. In a third column, final purification ia achieved. 

•a • 

ENVIRONMENTAL ASPECTS....Butediene is a skin and mucous membrane irritant and can be narcotic in high concentrations. The 1989/1990 ACGIH exposure standard is 10 ppm for an 8-hour time weighted average. Butadiene is a suspected human carcinogen end worker exposure must be carefully controlled. Based on preliminary informstion, OSHA considers 1,3 butadiene carcinogenic, es does EPA. OSHA hes a consensus exposure 

standard of 1000 ppm averaged over eight hours from 1971 and is considering etiffer restrictions. In 1986, 

OSHA published an advance notice of proposed rulemaking seeking data on exposure levels, medical surveillance and the possible effects of additional regulations on the environment and on small business. In 

response, the Internstionsl Institute of Synthetic Rubber Producers has told OSHA that it thinks the 

permissible butadiene exposure level should be lowered to 10 ppm. 

To the best of our knowledge, the informstion contsined herein is accurate. However, we 

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