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Momentive On The Verge Of Bankruptcy

Momentive Performance Materials is threatening bankruptcy.

Moments ago the company filed an NT 10-K with the Securities and Exchange Commission. It is what a company files when it can’t file its 10-K annual report on time. The company says  it is in negotiations with creditors and notes that a Chapter 11 filing is a strong possibility. Momentive Performance Materials is the former GE Silicones business, which the private equity firm Apollo Management bought for $3.8 billion in 2006. Momentive’s filing reads:

The management of Momentive Performance Materials Inc. (the “Company”), a wholly owned subsidiary of Momentive Performance Materials Holdings LLC, has determined that the Company is unable to file its Annual Report on Form 10-K for the period ended December 31, 2013 on March 31, 2014, without unreasonable effort or expense because, for the following reasons, management needs additional time to analyze and finalize the Company’s financial statements.

The Company is currently in active discussions with various stakeholders regarding alternatives to modify its capital structure and reduce the Company’s leverage. The Company has been required to devote key personnel and administrative resources, including the personnel and resources of its accounting and financial reporting organization, to matters relating to these discussions. The Company believes these discussions will be concluded shortly. As part of this process, a filing under Chapter 11 of the U.S. Bankruptcy Code may provide the most expeditious manner in which to effect a plan of reorganization that may be proposed by the Company. However, there can be no assurance that an agreement can be reached with the Company’s stakeholders or that any transaction with the Company’s stakeholders will be consummated.

Although the Company is currently in compliance with the indentures governing its outstanding notes and its credit agreements, the Company has concluded there is substantial doubt about its ability to continue as a going concern for the next twelve months and expects that the audit report by its independent public accounting firm, with respect to the financial statements to be included in the Annual Report on Form 10-K, will contain an explanatory paragraph expressing substantial doubt about the Company’s ability to continue as a going concern. The going concern issue has generated substantial additional disclosures and has required the Company to change certain assumptions related to balance sheet classifications, certain debt-related deferred costs and income taxes.

For these reasons, the Company has not been able to file its Annual Report on Form 10-K for the year ended December 31, 2013 within the prescribed time period. Management is diligently working to close its books and records and to complete preparation of the financial statements as soon as practicable.

 

 

 

Siluria Is Looking Pretty Sharp

For the first time, IHS put on a Technology Seminar as part of its World Petrochemical Conference activities last week. Don Bari and Jeff Plotkin, both formerly with Nexant, organized the gathering. At more than 100, the attendance was pretty good, especially for an inaugural event that is part of a larger conference.

The first speaker was Guido Radaelli, vice president of engineering at Siluria Technologies, which is working on the oxidative coupling of methane (OCM) into ethylene. The term Holy Grail is thrown about often in the chemical industry. But it is no exaggeration for this technology. If perfected, such a technology would bestride the chemical world like a colossus. One leg would be that methane is a cheaper and more plentiful raw material than ethane. The other leg would be the considerable energy savings over ethane steam cracking because methane conversion would be exothermic.ihsblock

With such rewards, many have tried before and failed,notably Arco and Union Carbide, which  both had serious programs along these lines in the 80s.

Things are going fairly well for Siluria. The company is partnering with Braskem to build a demonstration plant in Texas. It also unveiled an ethlylene-to-liquids technology that would convert ethylene into aromatics and transportation fuels. They’ll need some pretty cheap ethylene to make that work.

Which brings us back to Siluria’s progress on OCM. Radaelli said that the company has made more headway than any company ever has in methane conversion into ethylene. The activity of the catalyst is higher, he said. The operating conditions are “many hundreds of degrees lower”. (I think this is one of the main factors that killed previous efforts.) The Siluria catalysts last years, not days, unlike previous efforts. Conversion and selectivity are thus far the same as they had been in the past.siluriafeeds

I was a little surprised to find out what actually happens in the process, as there is some ethane cracking occurring. It is powered by the heat of the conversion of methane into ethylene. I have included Siluria’s slide of the block diagram as well as one describing feedstock use.

Radaelli claims economic advantages over (conventional?) steam cracking. He said that, hypothetically, if a company were to build a 1,000,000 metric ton ethylene cracker and a 1,000,00 metric ton plant using Siluria’s technology, Siluria’s technology would have been more profitable to run in each of the four years beginning in 2009. Similarly, if a company would have built a 75,000-metric-ton plant using the Siluria technology in 2014, it would have by now saved more than $100 million in ethylene purchases. (The stand alone back-integration scenario seems to be a target for the technology.)

 

 

Amusing News Aliquots

Silly samplings from this week’s science news, compiled by Sophia Cai, Bethany Halford, and Jeff Huber.

Drop it like it's hot: Frogs can't reproduce unless they get those pants off. Credit: Buzz Hoot Roar

Drop it like it’s hot: Frogs can’t reproduce unless they get those pants off. Credit: Buzz Hoot Roar

Ever wonder how scientists deciphered the mysteries of reproduction? Did you know frogs in tiny taffeta pants were involved? [Buzz Hoot Roar]

Study finds that couples who yawn together, stay together. It’s just the sort of motivation you needed to sit through another family slide show. [Mother Nature Network]

A dwarf planet has been named after Joe Biden. It marks the first time that the vice president has ever been characterized as having a small presence. [TPM]

“Cuddle Care” dolls let kids play doctor … but is being recalled for sending kids to the real doctor. [NPR

Golfers started the fire. Yes, they did light it. And 200 firefighters tried to fight it. [iO9]

Analytical chemist finds half of an ancient sea turtle bone in a stream in New Jersey. Turns out the other half has been sitting in a museum for nearly 200 years. [LA Times]

University of Pennsylvania scientist claims that sufficient sleep can diminish the likelihood of weight gain, diabetes, and heart disease. “But if we start sleeping more, that will cut into precious time that we could spend eating!” said everyone in America. [The Week]

In related news: The city that’s cracking down on sugary soft drinks now has a 24-hour ATM … for cupcakes. [Kitchenette]

Water–you know it as a solid, liquid, or gas. Now meet the water blob. [Fast Co.]

Danish zoo slammed for feeding unneeded giraffe to lions. Their response? Kill the lions. [Washington Post]

 

What Might Be Tagged At Dow’s Yardsale?

As you have may have heard, Dow Chemical plans to sell more businesses. Back in December, the company said it would get rid of its epoxy resins and chlorine-related business, which would make the bulk of $3.0 to $4.0 billion worth of divestitures. Mind you, these numbers here are a little funky. They refer to the pre-tax proceeds to Dow from transactions that aren’t necessarily even being negotiated yet. However, the company tends to get strong valuations when it sells businesses, so I would expect that the proceeds from deals would be within the range and even towards the top of it.

Last week, at an investor event in Saudi Arabia, the company announced it would put an additional $1.5 to $2.0 billion in businesses up for sale. CEO Andrew N. Liveris wouldn’t say what the businesses are, but he would certainly characterize them. They would be nice businesses, likely coming out of its Performance and Functional Materials units, and perhaps reasonably profitable. But they would be more meaningful to potential buyers than they currently are to Dow. They would be, Liveris promised,  “Lots of small, little businesses that you never even track, that you never follow, and that you never even knew we had.”

He was addressing analysts, thus casting a wide net. They are only acquainted with the solid form of ethylene known as polyethylene and Dow AgroSciences.

The Chemical Notebook takes Liveris’ remarks as a challenge. What are the most obscure Dow businesses? Two that jumped out at me are are Dow Plastics Plastics Additives And Dow Oil & Gas. Dow put the plastics additives unit up for sale last year and then withdrew it from the market. Oil and Gas is tiny, about $270 million in annual sales. It is a market facing unit that sells chemicals for oil and gas exploration and extraction. This is a very marketable business, with companies such as Solvay and Ecolab plunging further in this area. My only reservation about Dow selling this business is that the chemistry on offer in oil and gas overlaps with other Dow businesses.

Additionally, I combed through Dow’s Product Safety Assessment Finder, which by the way, is a great source of information for many chemicals. I asked question “what are the real oddball businesses?” Here are few (Don’t take this as a list of possible sales, though. Some, as you will see, are likely keepers.):

Silicones and Feel Modifiers: These sound dirty. They’re not. They are used in leather finishing. They also sound like something Dow Corning would sell. With a tradename like ROSILK, I’ll guess these came from Rohm and Haas.

ADSORBIA Adsorbent Media: Did you know that Dow offers titanium dioxide based adsorbent media? Now you do. Dow has a market-facing water treatment businesses, so while Dow selling something made of TiO2 sounds strange, it does seem like this is part of a complementary market offering.

Stannous Fluoride: This is fluoride…for toothpaste. Take that, Cavity Creeps!

Markers and Dyes: These are markers and dyes used to color fuel. Why would you color fuel? So you can easily tell different kinds of fuels apart. For instance, diesel and number 2 oil are taxed at different rates. Home heating oil is taxed at the lower rate. It gets a red dye to prevent and detect its illegal use as a transportation fuel. I know this because heating oil was the Tullo family businesses. Also, we drove diesel cars, including that terrible Oldsmobile, in the late 70s. This seems to be another one that came from Rohm and Haas (Morton to be precise), as the brand name MORTRACE is associated with this business.

Nickel-plating process products: I never knew Dow did this. However, don’t think trophies and baby shoes. This business primarily serves the electronics industry.

Infrared Materials: These are zinc selenide and other specialty glass materials. Dow sells them as shapes that are pressed into lenses for infrared sensors, night vision goggles and so forth.  These don’t strike me as particularly dangerous materials unless the Marines are after you at night.

Powerhouse Solar Shingles: These are photovoltaic cells that are easier to install and more inconspicuous than conventional polysilicon solar cells. This is a good business and addresses a need. However, I never fully understood why Dow is in this business. It has kind of a pet project feel, so it could be a keeper for a while. But I think that Dow will sell this business eventually.

Borohydride and other boron based compounds: These are used as chemical intermediates, largely in fine chemicals. Similarly, Dow also supplies trimethyl borate. My boss, Mike McCoy, swears that this business, another Rohm and Haas joint, is sizable, with perhaps tens-of-million-of-dollars in revenues. I don’t doubt that. It does seem like a vestige, one that doesn’t seem difficult to carve out.

The U.S. Cracker Leader Board

Back in March 2011, I jotted down on my notebook a ranking of companies most likely to build a U.S. ethylene cracker. It was to be a post for this very blog. But before I got around to posting it, Chevron Phillips announced a cracker project, stealing my thunder. I didn’t end up putting it up.

And thank goodness for that. It was a pretty cruddy list. I can’t find it now, but I am pretty sure that Shintech, SABIC, and LyondellBasell were on top. None of these has formally announced a project.

That said, now that we are approaching the construction phase for the projects that have been announced over the last three (three!) years, it might be worthwhile to compile a ranking of how likely it is that the projects will be built (at something resembling their appointed schedules and without major modifications).

Welcome Plastics News readers! And thanks, Don, for the kind words.

1) Chevron Phillips: The company is building a cracker in Baytown, Texas, and a pair of polyethylene plants in Sweeny (Old Ocean), Texas.

Probability: nearly 100%. Only meteors or aliens could stop this one. I just interviewed Ron Corn, who has been in charge of these projects for the last couple of years. The sites have been prepared. The equipment, and even the structural steel and pipe, have been ordered. The contracts and the air permits are in hand. Construction is set to begin in earnest within months.

2) Dow Chemical: The company is building a cracker in Freeport, the keystone of a program that is also seeing the company build a propane dehydrogenation plant and reopening a cracker in Louisiana. The dehydrogenation plant is already under construction.

Probability: 90%. Like Chevron Phillips, it seems that equipment and contracts are in place. A draft permit from EPA came for the facility this month. That said, Dow has an unrivaled capacity to change its mind on capital expenditure decisions. (Remember the crackers in Oman, Russia, and India? The Michigan battery plant? Ethanol-based polyethylene in Brazil? The Canadian wheat straw composites plant?) However, what Dow is doing on the Gulf Coast is much less risky than any of those things. The company did originally promise a second PDH plant, which I would say is a little less probable than its other builds in the region.

3) ExxonMobil: The company is building a cracker in Baytown and polyethylene capacity in Mont Belvieu.

Probability: 85% There have been challenges to the environmental permitting here. I doubt that would be enough to sideline the project. 

4) Formosa Chemicals and Plastics: A medium-sized ethylene cracker and propane dehydrogenation unit as well as a polyethylene plant at its Point Comfort, Texas, plant.

Probability: 80%. The company hasn’t said a lot about the project since it was announced in February 2012. Having built a cracker in Point Comfort a little more than a decade ago, the company has a proven track record. Plus the project is more modest than some of the other plans companies have for U.S. petrochemical capacity.

5) Occidental Chemical/Mexichem. A smallish cracker in Ingleside, Texas. The cracker will feed an Oxy vinyl chloride monomer plant. Mexichem has an offtake for the VCM, which it will export to integrate its polyvinyl chloride operations. 

Probability: 70%. This one is a little less likely than the others, though it is somewhat out of the gate. Mexichem is already expanding VCM capacity in Mexico. Maybe it needs more, maybe not. Oxy is back integrated into upstream oil and gas and needs an outlet for natural gas liquids. It is building fractionation capacity in Ingleside. However, Oxy already owned a cracker in Corpus Christi. It contributed it to Equistar. Now Lyondell owns it and is presumably a major Oxy ethylene supplier. I would be shocked if the Oxy and Lyondell haven’t discussed an NGL supply agreement with an ethylene offtake for Oxy. I would be surprised if such a low capital approach wasn’t still an option today.

6) Sasol: A cracker and derivatives in Westlake, La.

 

Probability: 65%. This is the aperitif to Sasol’s $16 billion gas to liquids project. Sasol tells me that a final investment decision hasn’t been made. So, at the very least, I would look for a delay beyond the 2017 startup. However, the community has invested a lot in this plant. Sasol has also divested an Iranian joint venture to prevent a regulatory holdup to its plans in Louisiana. Some 80% of property owners surrounding the plant have signed on to Sasol’s land acquisition plan.

7) Axiall/Lotte: An ethylene cracker and downstream derivatives somewhere in Louisiana.

Probability: 50%. On the one hand, I am under the impression that having the heft to pursue a project like this is one of the reasons that PPG’s chlor-alkali unit and Georgia Gulf merged. However, the project is new and not defined yet. 

8) Shell: An ethylene cracker along with polyethylene and other derivatives in Monaco, Pa.

Probability 30%. This project is not on the Gulf Coast, so lack of connectivity with the rest of the chemical world is a big disadvantage. Shell would have to reenter the polyethylene business. Shell did cancel a gas-to-liquids project, making it a little more likely that the company will allocate capital for the chemical plants. But that is like a turkey concluding he’ll never be eaten because he wasn’t the one dragged to the stump on Thanksgiving morning. The best that can be said that is that Shell really loves chemicals now because it compares favorably to refining. 

9) Odebrecht: A cracker in Parkersburg, W.Va, and polyethylene plants. Odebrecht affiliate Braskem would market the output. 

Probability: 29%. Just slightly less likely than the Shell project. It should be noted that Braskem and Idesa are already building an ethylene cracker in Mexico that is well underway. So my only real reservation about this project, other than the same isolation issues for Shell, is that another Braskem project in the NAFTA region will be like another trip to the smorgasbord. (Or leaving the rodizio card greenside up?) However, investing in petrochemicals in South America isn’t a great option for the foreseeable future. Braskem would be wise to invest in North America while there is an opportunity to do so.

 

10) Total Petrochemicals: The company is contemplating a cracker in Port Arthur.

Probability 25%. Lowest on the list only because the project isn’t clearly defined.

 

Amusing News Aliquots

Silly samplings from this week’s science news, compiled by Sophia Cai and Jeff Huber.

Egg

Spotlight stealer: Girl takes credit for the small egg her chicken laid. Credit: Cheddar Valley Gazette

A chicken may have laid the world’s smallest egg. Hungry Denny’s patrons hope the egg will be served with the world’s smallest strip of bacon. [Cheddar Valley Gazette]

A solar power plant near Las Vegas has received complaints that the glare from its panels is distracting pilots and poses a safety hazard. Thank goodness there aren’t any other potential distractions in the Las Vegas skyline for pilots to contend with. [Gizmodo]

Finally, science validates the five-second rule of dropped food. Now it’s society’s turn to accept the slovenly behavior. [Science Daily]

The mood of your friends on social media can affect your mood as well, researchers say. So maybe it’s time you stop following Grumpy Cat on Twitter. [NPR]

Study shows invertebrates might feel pain. Calamari consumers and lobster lovers everywhere cringe a little. [Washington Post]

Pee can actually be used to power a cell phone. “A urine-laced phone?!” the Newscripts gang scoffed. “That’ll never happen. Now, if you’ll excuse us, we’re going to go back to using our cell phones, which we’ve accidentally dropped into the toilet three times.” [BBC]

Not to be outdone by sci-fi movies, surgeons reconstruct a man’s face with a 3-D printer. [iO9]

Seattle police authorized to use facial-recognition software. Criminals lining up to get new 3-D printed faces. [NBC News]

A bar in upstate New York has turned an ice-frozen parking lot into a field for turkey curling. It’s exactly the kind of sensible decision you would expect an establishment that sells inebriating beverages to make. [12 WBNG Action News]

No, professor, your lecture is so stimulating that I have to cool my brain! [Gizmodo]

Three tiger cubs were recently born in the ZSL London Zoo. Vladimir Putin says he can’t wait to pose with them for a photo-op. [The Telegraph]

#Chemsafety at #ACSDallas

Dallas_transition_825x259The 247th ACS National Meeting starts on Sunday in Dallas, Tex. Here are the chemical and laboratory safety events that will be happening there. If you’d like a nicely-formatted version to print, check out CHAS-at-a-Glance.

SUNDAY

  • Division of Chemical Health & Safety executive committee meeting, open to all ACS members; 8:30 am-noon; Convention Center room D169
  • Ask Dr. Safety: Protecting reproductive health in the laboratory environment; 1:30-3:10 pm; Convention Center room A120/A120

MONDAY

  • Committee on Chemical Safety meeting; 8:30-11:30 am; Sheraton, 400 N Olive St, room Lone Star C2
  • Benefits of chemistry in our lives; 8:00-10:20 am; Sheraton Dallas, Austin Ballroom 2 (cosponsored PRES event)
  • eLearning: What we’ve learned and where we’re going; 1:30-3:50 pm; Convention Center room A120/A120
  • Chemical safety of energy and food; 4:00-5:10 pm; Convention Center room A120/A120
  • Social hour; 5:30-7:30 pm; Iron Cactus, 1520 Main St (hosted by CHAS, PROF, and SCHB)

Just How Scientific Were This Year’s Best Picture Oscar Nominees?

Cate_Blanchett_Oscar_-_Cropped

Oscar: It’s hard to argue that science isn’t fundamental to a statue that is covered in gold. Credit: Travis/Wikimedia Commons

The Oscars were last Sunday. It was a time for us, the moviegoing public, to take to social media and cattily comment on Zac Efron’s inability to read a teleprompter …

John Travolta’s mispronunciation of the name of “Let It Go” singer Idina Menzel …

and Kim Novak’s bizarre spotlight-seeking behavior at an award show where she wasn’t even nominated …

But what about us members of the moviegoing public who are also science nerds? Where can we go to talk about how our favorite subject permeated this year’s nominated films? Why, to the Newscripts blog, of course! This year, we break down the science portrayed in each of the Best Picture nominees, ranking them from least to most amount of scientific material tackled. And if you think we missed some crucial science in the movies, sound off in our comments section. Also, be warned, spoilers are sprinkled throughout this post, so if you’re planning to catch up on these nominees sometime in the future, proceed with caution. Now, without further ado, the nominees are ...

 

9. “12 Years a Slave”

Synopsis: Freeman Solomon Northup (Chiwetel Ejiofor) is sold into slavery and spends 12 years toiling in the fields of the antebellum South. Director Steve McQueen uses excruciatingly long takes to force his audience to confront the violence of the U.S.’s dark past. By not cutting away from such cruelty, the film captivates in its brutal honesty. This really is the best picture of 2013.

Is there science? Not really. By virtue of being a period piece, “12 Years a Slave” comes closest to touching the subject of science when it reminds its audience of the technological advances our current society enjoys over pre-Civil War America; one such reminder occurs when Northup struggles to write a letter home to his family using ink he made from crushed berries. But outside of such reminders of our advancements in technology, the film doesn’t offer much scientific fodder.

 

8. “American Hustle”

Synopsis: A team of professional swindlers (Christian Bale and Amy Adams) are forced to help the Federal Bureau of Investigation in a sting operation on corrupt politicians. Cowriter and director David O. Russell packs the movie with enough flashy costumes, big hair, and loud music to almost distract you from the fact that the movie’s glut of dialogue diminishes its coherence. Almost.

Is there science? Like “12 Years a Slave,” the science in “American Hustle” largely stems from the fact that the movie is a period piece, and no scene in the movie references science more overtly than the scene in which Bale’s bored housewife, played by Jennifer Lawrence, places an aluminum container with tinfoil in a microwave that was given as a gift to Bale’s character by Camden, N.J., mayor Carmine Polito. After the microwave bursts in flames, Lawrence berates her husband for bringing a “science oven” into their home that she believes “takes all the nutrition out of our food.” Surprisingly, concern over the nutritional content of microwaved food is something that we’re still debating today, although such worries are unfounded. Another point of contention with this scene in the movie? Apparently, metal can’t catch fire in a microwave. (Warning: Video contains not-safe-for-work language.)

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