Methyl Tertiary-Butyl Ether (MTBE):Conditions Affecting the ...

Production, Trade, and Consumption Trends for MTBE
MTBE Production Costs in the United States
The costs of the four primary MTBE production processes vary widely, largely depending
on factors such as the type of plant and the source and relative cost of the feedstocks. For
example, the type of plant determines initial capital investment levels and ongoing process costs.
Butane dehydrogenation, or “on-purpose,” plants are much larger than refinery-based plants and
require higher capital investments. In the United States, when built from the ground up, they
require about $200-$300 million in initial investment, compared with about $8-$15 million for an
FCCU-based MTBE production facility. Moreover, the additional processing required by the
butane dehydrogenation process (i.e., the isomerization of n-butane and the dehydrogenation of
isobutane) adds “significant costs to the relatively inexpensive MTBE synthesis system.” 26 The
dehydrogenation unit is considered to be the “most expensive part of the plant,” primarily because
the process is very energy intensive. 27
The source and cost of the feedstock are also important determinants of the cost of the
production process. For example, the steam cracker process is less expensive than the FCCU
process primarily because the C 4 streams obtained from steam crackers contain a higher
concentration of isobutylene than those obtained from FCCUs and, therefore, their use results in
reduced capital and operating costs. 28 Further, the ready availability of an in-house supply of
finished isobutylene streams plays an important role in reducing the production costs of the FCCU
process, compared with those of the butane dehydrogenation process, as does the low capital
investment needed. Many refineries with available C 4 streams built MTBE units to utilize and add
value to the streams. 29
Although any direct comparison between the different MTBE production processes would
be difficult, as they require different capital investments, have different economies of scale, and use
different feedstock sources and valuations, 30 industry sources state that on a general basis the
butane dehydrogenation process is the most expensive, followed by the FCCU process and then the
steam cracker process. The difficulty in evaluating the relative costs of the FCCU and TBA
processes is compounded by the fact that the valuation of the feedstocks will vary because they are
internal streams and, as such, the values are generally allocated by the producer as proprietary
transfer prices. 31 The valuations can also vary depending on the focus of the production process.
26 Chem Systems, Inc., Process Evaluation Research Planning Report, p. 17. Also
DeWitt & Co., MTBE and Oxygenates, appendix C.
27 DeWitt & Co., MTBE and Oxygenates, appendix C, and USITC fieldwork in the
United States.
28 Chem Systems, Inc., Process Evaluation Research Planning Report, p. 9.
29 USITC fieldwork in the United States; telephone discussion with a representative of
DeWitt & Co., June 22, 1999.
30 USITC fieldwork in Europe.
31 Communication from DeWitt & Co., dated Apr. 29, 1999; communications with
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