Monaca, Pa!
Mar15

Monaca, Pa!

Shell Chemical has selected the Pittsburgh area town of Monaca, Pa., as the site of its new ethylene cracker complex. Actually it will be in Potter and Center Townships, which are near Monaca, Pa. (Pop. 6,286, according to Wikipedia). But that narrows it down a lot more than what Shell was previously saying: “I don’t know, Appalachia somewhere or something.” Monaca is a bit of a chemical town. It is host to a Nova complex that makes Arcel polystyrene resins for foams and expandable polystyrene. Nova calls this the Beaver Valley site. (If that name conjures an image of a valley teaming with beavers felling trees willy nilly, I know the feeling.) This doesn’t mean that the plant is a done deal. As its press release explains: “The next steps for this project include additional environmental analysis of the preferred Pennsylvania site, further engineering design studies, assessment of the local ethane supply, and continued evaluation of the economic viability of the project.” The company isn’t saying much more about the project. It will feature an ethylene cracker and downstream polyethylene and ethylene glycol plants. We already knew about that. There’s nothing new about the size or the timing. I do have a couple of thoughts about the project: 1) Isolated ethylene and derivatives complexes never work out. If the ethylene cracker goes down, how do you run the derivatives plants and where does the ethane feedstock go? If one of your derivatives complexes goes down, do you run the cracker at reduced rates? It would be nice to see another cracker complex built in the neighborhood that would be connected to the Shell site. I suspect that we’ll probably hear from another company with cracker plans in the region before long. 2) I doubt Shell will build its own polyethylene plant. It hasn’t had any skin in the polyolefins game since it sold its stake in Basell to Access Industries in 2005. I am expecting a partner of some kind on the polyethylene unit. If it does go it alone, I would think that the plant would spew out commodity grades of polyethylene. One example of such a product would be high-density polyethylene for extrusion blow molding—used to make milk jugs. Shell would need something that is relatively easy to sell. Also, the company wouldn’t want to do a lot of switching of grades at the plant because of potential problems with excess ethylene, as I mentioned above. All this aside, it is great to see such a big chemical plant being contemplated for the...

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Notes On Dow’s Investor Day
Oct05

Notes On Dow’s Investor Day

Yesterday Dow held its annual investor day. The main theme was that the pieces were in place for strong earnings growth. In an interview after his presentation, CEO Andrew Liveris complained that the company is still being pigeonholed unfairly as a commodity chemical company by Wall Street. The post-recession peak for Dow shares, early this past May, was more than $42. Now they are trading in the low 20s. I am writing a feature story on the event for C&EN. I do have a couple of observations that I wanted to share on the blog right away. Dow is walking back plans to divest high-density polyethylene. About a year ago, Liveris floated a trial balloon about the sale of HDPE. The distinction the company has been making has been between its “specialty” solution process polyolefins and “commodity” Unipol-based, gas-phase polyolefins. Liveris told me yesterday that Dow now plans to convert gas-phase plants into solution-based plants at “integrated” facilities. He specifically mentioned Alberta. I would gather that this means swapping out the reactors and leaving the rest of the plant infrastructure in place. Polyolefins licensing is a keeper for Dow. Polypropylene licensing was left out of the sale of the polypropylene business to Braskem. Dow really intends to keep this. The same goes for its stake in Univation, which licenses Unipol polyethylene. Howard Ungerleider, who leads the Performance Plastics division for Dow, told me the polypropylene licensing unit is a pretty big earner for Dow and has been gaining market share. Dow AgroSciences is a keeper, too. When Dow was going through a crisis in early 2009 related to its purchase of Rohm and Haas, Liveris indicated that he might sell this unit. I asked him if the company is still on the fence about this. He said that the company is “Not on the fence and fully on the farm.” Though the unit is small compared to competitors like Monsanto, Liveris said that the unit is “punching above its weight.” Dow’s acquisition strategy will be modest. The company is steadily digesting the debt related to Rohm and Haas. One might think that the company would be planning acquisitions again. Not so. Liveris says the company is only considering smaller acquisitions to round out his existing portfolio. He mentioned IBM, where Liveris incidentally is a director, as a model. Andrew Liveris is a Michigan Wolverine fan. I talked football with him while arranging my stationary on the conference table. He is very excited about the 5-0 start. I am too. I warned him, as a Michigan alum, not to put too much faith in a good Michigan start. (I was...

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Nova Chemicals Gives More Details On Nova 2020
Aug12

Nova Chemicals Gives More Details On Nova 2020

Nova had its second quarter earnings conference call yesterday. I was interested in whether the company would give more details about its plans to build two new polyethylene plants--one in Alberta and another in Ontario. As announced last June, the project also involves an upgrade and an expansion of its Corunna, Ont., cracker. When Nova is finished, the cracker will only crack natural gas liquids, mostly ethane from the Marcellus shale in the Pennsylvania area. There are a few new details, not many, though I think I understand the project a little better now. Here are the takeaways: 1) The company will have a decision “shortly” on what pipeline plan it is going with. CEO Randy Woelfel says the company is currently analyzing Sunoco Logistics’ “Project Mariner West”. This project involves a 25-mile pipeline being constructed between MarkWest Liberty’s Houston, Pa., plant and Sunoco Logistics’ pipeline grid in Vanport, Pa. 2) There is enough spare capacity in Alberta—the site runs at operating rates of about 85%--to accommodate a new polyethylene plant. 3) Nova says that the total capital needed for Nova 2020 could exceed $1.5 billion over the next seven...

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Wiffle Ball, Inc.
Jun23

Wiffle Ball, Inc.

One of my favorite family activities is playing Wiffle Ball with my eight-year-old daughter. I try to hit the ball clear across the street and over my neighbor’s fence about 100 feet away. Though, the theoretical limit of hitting a Wiffle Ball seems to be something like 90 feet. My daughter enjoys beaming it off the house and delights in watching it roll down the pitch of our gabled roof. When we get bored, we normally start playing light-saber fight with the bright yellow Wiffle Ball bats. One of the greatest things about real Wiffle balls is that they are (still) made in the U.S.A., in Shelton, Conn., near the New England cradle of the plastics industry. Joshua Robinson at the Wall Street Journal penned a wonderful profile of the company, Wiffle Ball, Inc., and its factory. There is also an accompanying photo essay on a WSJ blog. Both are worth a look. My favorite quote from the story: Wiffle Ball connoisseurs follow the company so closely that every few years, when the factory replaces its worn-down molds, the Mullanys have to field a slew of complaints. People call and tell them the weight of the ball is off, when in fact the crisp new molds are only going back to accurately producing the correct specifications. "It's one or two grams' difference," Steven said, "but people notice." The article made we wonder about the materials. I always figured that the balls and bats were made out of polyethylene, but I never knew for sure. Recycling symbols aren’t molded into the parts. I looked up the original patent, filed on the first day of 1957. It is a fun document to read: In the playing of games wherein ball is struck by a bat, or the like, a disadvantage has often been encountered in respect to the limitations of space in certain areas where the game is played. In addition, because of the construction of the ball itself, with which these games are played, injury to property and persons are sustainable. Further, such games are oftentimes not able to be played by younger children or by persons, who, because of limited space available or other reasons, do not desire to run in participating in the game. Enter the Wiffle Ball, the solution to all these problems. The patent presages half a century of Schaefer-fueled backyard barbeques. (The one beer to have when you desire not to run.) “The shell is preferably made of plastic material, such as polyethylene or the like,” the patent says. As for what kind of plastic, numerous references to the bat on the net say its...

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Dow Promoting Incineration
May25

Dow Promoting Incineration

Dow Chemical is recycling plastic the old fashioned way, they are burning it. The company wrapped up a trial at its Midland, Michigan, headquarters facility where it incinerated 578 lbs of linear low-density polyethylene film waste from its nearby extrusion laboratories. The company was able to recover 96% of the energy from the plastic, an equivalent, it says, of about 11.1 million Btu of natural gas. Dow is suggesting that incinerating plastic is a viable alternative to the landfill for those plastics that aren’t commercially recycled. It also asserts that waste-to-energy technology is an underused scheme in the U.S. compared to Europe, where the practice is fairly common. I couldn’t agree more. I grew up in Staten Island where hostility to landfills is pretty well entrenched. For decades, half the borough smelled like sour milk. We are letting a lot of good energy and land go to waste by burying trash. You may be wondering about greenhouse gas emissions. I asked Dow about that. “Polyethylene and natural gas have similar fuel values and emit a similar amount of CO2 when burned,” I was told. True? Well, fair enough. I did my own calculations. I came up with 75 kg of carbon dioxide per kilogram of polyethylene burned. The value for natural gas is about 54 kg. That’s a 39% difference. However, the value for polyethylene matches crude oil and middle distillates almost exactly and is less than petroleum coke. (Granted, this isn’t something I do every day. So my calculation for polyethylene might have erred...

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