Monolith Plans Shake-up Of Carbon Black World

A company has emerged from Silicon Valley claiming to possess disruptive technology that will shake up a business familiar to many Americans.

But unlike most firms to come out of that part of California, this one doesn’t intend to do its disrupting with silicon or smartphone apps. This company’s plans involve one of the chemical industry’s most traditional products, the rubber ingredient carbon black.

Redwood City-based Monolith Materials wants to build the first new carbon black facility in the U.S. in some 30 years. The firm’s technology twist is that its raw material will be natural gas rather than the heavy petroleum used by the industry today.

Given today’s low natural gas prices, it’s an intriguing idea. It’s also an idea that has been tried before without success. The trick for Monolith will be to overcome the technological hurdles that stymied natural-gas-based carbon black in the past.

Monolith was launched quietly in 2012 by Robert Hanson and Peter Johnson. The pair had been engineers at Ausra, a thermal solar power firm that the French nuclear energy provider Areva acquired in 2010.

After spending some time at Areva, the two set out on their own, looking for opportunities to upgrade newly abundant U.S. natural gas. They seized on several dormant pieces of intellectual property (IP) for making carbon black from gas. “We did a global roll-up of IP,” Hanson says.

To head the company, Hanson and Johnson recruited a carbon black industry veteran, William J. Brady Jr., who had worked for Cabot Corp., the leading U.S.-based carbon black producer, for 23 years until 2010. One of his roles there was general manager of Cabot’s $2 billion-per-year carbon black business, which at the time operated 23 plants in 17 countries.

Like other carbon black companies, Cabot produces its main grades via the so-called furnace process, in which a heavy oil is incompletely combusted, or pyrolyzed, in a hot gas stream. The result is a finely divided carbon powder that is incorporated into tires at up to 30% by weight. Global consumption of carbon black is more than 8 million metric tons per year.

The advantages of using natural gas instead of oil, Monolith says, are much lower emissions of carbon dioxide, sulfur dioxide, and nitrogen oxides. Interestingly, the firm isn’t emphasizing a cost advantage. Hanson only says Monolith will be “cost-competitive” with traditional producers.

The heart of Monolith’s technology comes from the Norwegian engineering firm Aker Solutions. During the 1990s, Aker, then known as Kvaerner, developed a process that turns methane into carbon black and hydrogen via plasma pyrolysis.

In 1998, Kvaerner and the Quebec government launched Karbomont in Montreal to pioneer the technology. In 2003, however, their plant was shuttered. Although the partners never detailed why, a paper delivered at a 2008 Electrochemical Society meeting speculated that the plant encountered problems with electrode wear and carbon bridging between electrodes.

According to Brady, Monolith obtained the technology fix during its IP roll-up. It has been proving out the process since last year at a pilot plant in Redwood City. “The challenges Karbomont faced have been solved by others,” he says.

Monolith went public with its process in April when it announced plans to build a commercial-scale carbon black facility adjacent to Nebraska Public Power District’s power plant in Hallam, Neb. The by-product hydrogen will replace coal as the fuel for a power plant boiler.

Monolith’s facility won’t be cheap. A full-sized carbon black plant produces anywhere from 150,000 to 250,000 metric tons per year, Hanson says, and costs hundreds of millions of dollars.

But unlike its Silicon Valley neighbors, Hanson and Brady point out, Monolith isn’t backed by venture capitalists looking to make a quick killing on an app. Instead, the firm is working with two experienced energy sector investors: Canada’s Kern Partners and First Green Partners, which was established by the investment bank Warburg Pincus. “These are big, serious private equity investors,” Brady says.

François Terrade, head of the carbon black consulting firm Pro2Act Management, gives the project a serious chance of success, mainly on the strength of the presence of Brady and another ex-Cabot manager, Roscoe Taylor, on Monolith’s team. Terrade, himself a former Cabot executive, says he likes the reduced sulfur and nitrogen emissions promised by natural gas but wonders whether Monolith can solve the particulate matter problems that have plagued other carbon black plants.

Indeed, in March, Continental Carbon signed a consent decree with the Environmental Protection Agency in which it agreed to spend $98 million to reduce particulate matter, SO₂, and NO_x emissions from its three U.S. carbon black plants. Cabot signed a similar agreement in 2013 expected to cost $84 million.

Hanson points out that California environmental authorities approved Monolith’s pilot plant, which is located a mere 50 yards from San Francisco Bay. They, at any rate, seem convinced that the firm will operate a clean process.

On the basis of his experience, Brady says he expects tire and other rubber customers to appreciate the new process as well. In fact, Brady sees natural gas as the future of the carbon black industry. “We don’t see a reason why the world should continue to expand with the furnace process,” he says.