Study: Shale Offers Hope For Sunoco Pa. Refinery

The advent of natural gas from shale could potentially resurrect an old 175,000 bpd Sunoco refinery in Marcus Hook, Pa., near Philadelphia, according to a new report issued by the consulting firm IHS. The report brainstorms redevelopment concepts and was commissioned by the Delaware County Council, which wants to recover some of the 500 jobs lost when the refinery closed back in December. The Council and IHS came up with ideas that were a lot more creative than what I have usually seen driving by old industrial properties in New Jersey: 1) Leave it to rust until Mother Nature reclaims it. 2) Tear it down and build retail on it. All of the report’s proposals involve hydrocarbon processing of one kind of another. Several of the ideas singled out in the report as having high market viability are relevant to chemicals. These are: 1) Propane Dehydrogenation: Braskem has a polypropylene plant downstream from the refinery and, as I have explained before, is likely on the hunt for feedstock. 2) Integrated ethane cracker complex: ANOTHER cracker? 3) Natural gas liquids processing. Out of these my favorite is the dehydrogenation idea. Though, I have always preferred Philadelphia to Pittsburgh as a location for a Northeast cracker. (Better hydrocarbon infrastructure, plus I can look at it when I pass by on Amtrak on the way back from HQ). NGL processing is promising, too. But why stop there and not create a market for the liquids nearby? The report looked at other options, too. Refined petroleum products storage (boring!), natural gas power generation (bleh!), LNG export terminal (yeah, THAT will happen so close to Philly), gas-to-liquids production (that could cost up to $6 billion, so forget it). Cool report. Kudos to IHS and Delaware County for a lot of creative...

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President Obama Champions Manufacturing In The SOTU

During last night’s State of the Union address, the president spent roughly the first quarter of the speech talking about manufacturing. Does Obama have the right solutions? Time will tell. (It is an election year, so little will get done anyway.) But the Administration has certainly identified the right problem: the need to turn around manufacturing in the U.S. The speech began with the auto companies: On the day I took office, our auto industry was on the verge of collapse.  Some even said we should let it die.  With a million jobs at stake, I refused to let that happen.  In exchange for help, we demanded responsibility.  We got workers and automakers to settle their differences.  We got the industry to retool and restructure.  Today, General Motors is back on top as the world’s number-one automaker.  (Applause.)  Chrysler has grown faster in the U.S. than any major car company.  Ford is investing billions in U.S. plants and factories.  And together, the entire industry added nearly 160,000 jobs. We bet on American workers.  We bet on American ingenuity.  And tonight, the American auto industry is back.  (Applause.) What’s happening in Detroit can happen in other industries.  It can happen in Cleveland and Pittsburgh and Raleigh.  We can’t bring every job back that’s left our shore.  But right now, it’s getting more expensive to do business in places like China.  Meanwhile, America is more productive.  A few weeks ago, the CEO of Master Lock told me that it now makes business sense for him to bring jobs back home.  (Applause.)  Today, for the first time in 15 years, Master Lock’s unionized plant in Milwaukee is running at full capacity.  (Applause.) Let’s make one thing clear: “bankruptcy” isn’t the same thing as “going out of business”. The public seems to conflate those two things, perhaps for understandable reasons. Usually the 11 o’clock news stories about bankruptcy filings are discussing local retailers. Retailers are usually laden with a lot of working capital—namely inventory—and not a lot of fixed assets (Usually some readily sellable real estate and store infrastructure). Such retailers are easily liquidated and simply disappear. Big manufacturers have a lot of equipment that isn’t as easily transferrable to other firms. If there had been a normal bankruptcy procedure, GM and Chrysler, could very well have emerged as successful car companies. LyondellBasell went through bankruptcy around the same time. It emerged, and it is now making manufacturing investments again. However, it is also likely that the government-controlled procedure might have allowed for a more orderly process, especially in regards to a labor-management agreement. And the government likely offered the financing on more...

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PPG Looks To Secure Titanium Dioxide

At an analyst meeting this week in New York City, PPG Industries chief technology officer Charles F. Kahle II announced that his company was looking to partner with a TiO2 producer. Here’s the context: supplies of TiO2 white pigments and the ores that are used to produce them are exceedingly tight. This has prompted Tronox to merge with the South African mineral sands producer Exxaro and is the reason Saudi Arabia’s Cristal is planning to construct an ilmenite processing plant in Saudi Arabia. Cristal has also been increasing its interest in its mining affiliate in Australia. And let’s not forget that paint maker AkzoNobel aims to build a white pigment plant in China by 2014. In addition, DuPont is planning to expand capacity by 350,000 metric tons per year, including a new plant in Altamira, Mexico. Kahle says PPG, one of the world’s largest paint companies, has its own TiO2 technology. The company is willing to form joint ventures, license technology, collaborate technologically, and provide technical assistance with TiO2 producers. He pointed out that the company previously made TiO2 in Natrium, W.Va. I had never heard of such a plant. So I consulted the C&EN archives. Turns out PPG did have a plant…which closed in 1971 (C&EN, June 28, 1971). To illustrate how long ago that was, let me point out that the number one single when the C&EN article come out was It’s Too Late/I Feel The Earth Move by Carole King. The plant had opened only two and a half years before. There was overcapacity in the industry and PPG’s source of raw materials, a rutile mining affiliate in Sierra Leone, was in receivership. “PPG says technically the plant was a success, that it was well satisfied with its process, and that it was and still is proud of the plant,” the article said. Apparently, the company is still proud. There was a rash of plant closures in 1971, the article noted. “It’s beginning to look as if 1971 will be remembered as a year the chemical industry bit the bullet,” it said. (I do like our use of the indefinite article to hedge against the possibility that there could be future years of bullet biting.) Good year for Carole King,...

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Dow CEO Talks Manufacturing On CNN

Dow CEO Andrew N. Liveris appeared on a CNN special Sunday night hosted by Fareed Zakara titled “Restoring the American Dream, Getting Back to Work.” The segment with Liveris can be found here. As previously noted by The Chemical Notebook, and in C&EN, Liveris wrote a book on rejuvenating American manufacturing called Make It In America: The Case for Re-Inventing the Economy” . (My review was blurbed in the editorial review section of the Amazon listing!) I transcribed some of the interesting quotes from the CNN piece: Zakaria: The manufacturing jobs of the future are high-tech and high paying, but isn’t it impossible to lure those jobs to America since our labor is more expensive than other countries’? Absolutely not, says Liveris, labor accounts for only 8% of his total costs. Liveris: I do not make a decision on where to site my factories based on labor costs. I make it based on—totally–around the policies to encourage me to invest there and the human capital to support. And that’s why, at the end of the day, we still have a chance in this country. It should be noted that chemical operations are capital intensive, not labor intensive.  Here’s a link to some data from the Census Bureau’s 2002 Economic Survey. For chemicals, the value of shipments per paid employee is more than twice the average for the entire manufacturing sector. And the chemical industry’s average ratio of shipments to payrolls stood at 10.33. Only the petroleum and coal (35.00) and the beverage and tobacco (15.27) industries have higher ratios. At chemical plants, you see a lot of plumbing and reaction vessels, but not many people. The human activity typically occurs a) in the control room, (b) at the loading and packaging area, and c) at the guard shack. So when Liveris says the cost of labor isn’t a big factor in his decision making, we can’t necessarily assume that this applies to other manufacturers, making other kinds of products. Liveris made another point in the interview, one he makes often, which I think is very important to C&EN readers. This is that research and development will follow manufacturing overseas. Liveris: When you make stuff, you don’t realize that when you move the making somewhere else, then the people who know how to make it have the intellectual knowhow to make the next one. Zakaria: But now they are in China. Liveris: They’re in China. So you have lost the supply chain as well, and your creativity has created huge jobs elsewhere of the continuous kind. It’s not just the job of the first Kindle, it is the job of...

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Apologies, Excuses

As you may have noticed, the Chemical Notebook has taken a summer hiatus of practically European extent. Sorry for the lack of posting. I do have excuses. Two floods—including Hurricane Irene–and my vacation occurred over the past month. (I considered writing a post on materials and hurricanes, but it was just going to be about how stupid it is to tape up windows during a hurricane.) Once I started treading water, it was time for me to put the final touches on a C&EN cover story on plastics. Also, the news hasn’t exactly inspired me to write. There are summer doldrums, but over the past month the news flow has been truly pitiful. Mike McCoy forwarded me an item about a drunk (allegedly) teenager that drove through the gate of a Huntsman plant in Port Neches, Texas. These days, I’ll actually take something like that. And then there is the Solyndra fiasco. I do want to write about that in depth at some point. And the episode fills me with doubt because I have been a backer of the idea of government incentives to boost U.S. manufacturing. Dow CEO Andrew N. Liveris, who wrote a book on the topic of reinvigorating American manufacturing, was quoted in a New York Times article on Saturday. I did wince a little when he mentioned that government, with the help of outside advisors, would “pick winners”. I wonder if the interview was conducted before the Solyndra story...

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Dow On TV

Olin isn’t the only company that makes chlorine and ammunition. So does Dow. Dow paintballs OK, the polyethylene glycol filling in paint balls aren’t exactly Winchester rounds. Separately, CBS News did a piece on Dow’s solar shingles: CBS Report on Dow Shingles Autoworkers paid taxes that helped subsidize my University of Michigan education. It is nice to see some of them getting back to...

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