Program has a portfolio of relatively small projects, all of them competitively awarded and all of them involving 30-50 percent cost sharing. The amount of cost sharing increases as the projects get closer to commercial readiness. Industry partners are involved in planning and funding the research program. DOE has worked with a committee of 15 large chemical producers, the Chemical Industry Vision 2020 Technology Partnership, to select the projects to be funded in the Chemical Industrial Technologies Program. The partnership focused on 10 individual areas of future promise, such as computational fluid dynamics and ionic liquids. An exergy analysis3 identified the major opportunities for energy savings in the chemical industry, focusing DOE project selection on those areas with the largest potential savings. This joint industry-government partnership is ongoing in helping DOE to select and evaluate projects. The primary selection criterion is energy savings in the United States.4

Twenty-two projects are currently being funded at $7 million per year. These projects, if they all were funded to completion and all were successful, are estimated by DOE to achieve a saving of 0.303 quads per year, or 23 percent of the overall program goal for the Chemical Industrial Technologies Program. Previous successful projects and new projects yet to be started will increase the savings.

The current Chemical Industrial Technologies Program as administered by DOE funds projects in three subprogram areas:

  • Reactions (13 projects). This area includes oxidation catalysis, microreactors, new process chemistry, and biocatalysis. The total energy saving goal in the reactions area is 650 trillion British thermal units (TBtu) by 2020, 242 TBtu of which is accounted for by current projects. In several of the funded projects, reaction and separation are carried out in the same step, thus attempting to gain substantial saving in both energy consumption and capital equipment. This work is part of the current worldwide trend toward process intensification.

  • Separations (4 projects). This area includes distillation hybrids, crystallization (not funded at the present time), and membrane separations. The total energy saving goal in separations is 420 TBtu, of which 40 TBtu is represented by current projects. This area also includes projects that combine separation and reaction (e.g., catalytic distillation) in the same equipment.

  • Enabling technologies (5 projects). This area includes materials of construction, with an emphasis on corrosion, computations to improve the efficiency of dense fluidized beds, industrial energy systems such as an energy-conserv

3

The exergy content of a system indicates its distance from thermodynamic equilibrium.

4

For a more complete description and evaluation of the strategic planning process of the Chemical Industrial Technologies Program, see NRC (2004a).

5

Dickson Ozokwelu, U.S. Deparment of Energy, “Overview of the Chemicals Subprogram,” Presentation to the panel, October 11, 2005.

The report presents a positive evaluation of the strategic planning process for the Chemical Industrial Technologies Program. ing burner design, and sensors and control equipment. The total energy saving goal in this area is 260 TBtu, 21 TBtu of which is in current projects.

The budget of the Chemical Industrial Technologies Program has shrunk drastically. From $13 million in FY03, the budget decreased to $9 million in FY05 and $7 million in FY06. There is a clearly apparent contradiction between the ambitious goals of the program and the dwindling resources available to pursue them. The DOE management team seeks to cope with this situation by continuing its portfolio review, described below.

There have been a number of accomplishments from completed projects in FY03-05 in the Chemical Industrial Technologies Program. Examples include in situ analysis, distillation column flooding prediction, dimpled heat exchanger tubes, catalytic hydrogen retrofit reactors, and new alloys for ethylene cracker tubes.5 All of these, with the possible exception of the retrofit reactor, have relatively specialized applications that will produce positive but modest benefits.

However, the program is also pursuing sweeping changes in process design in the hope that they can yield big energy savings. To focus their shrinking budget on the highest payoff projects, the DOE management team is trying to stimulate industry research and to fund projects that would not be possible without federal assistance, and is accelerating progress on projects that might be funded by industry sometime in the future. The portfolio is under continuing review, with the objective of ending projects that are not progressing or that promise only small energy savings.

A major new element complicating the management problem in this program is the surge in energy prices in 2005. This increase worsens the trend that few if any commodity chemical plants consuming large amounts of energy will be built in the United States in the foreseeable future. DOE intends to respond to this trend by emphasizing technologies that can be retrofitted to existing plants to increase their efficiency and lower their costs.

TECHNICAL AND MARKET RISK ASSESSMENT

In assessing the probabilities of technical success for the overall program, the panel needed to decide on whether to proceed from the top down or to rely on the project evaluations to build the program evaluation from the bottom up. Because of their number and heterogeneity, all 22 existing projects were assessed individually. The panel estimated the probability of technical and market success and estimated the benefit for the program as a whole by rolling up the project assessments. The panel was reasonably confident of its technical risk estimates but found market acceptance harder



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