not originate in their own laborato ries—the so-called "not invented here" or NIH syndrome—most groups that li cense to industry today say that this barrier essentially has disappeared. "I don't think this NIH thing is a prob lem now," says Battelle Development Corp.'s vice president and manager, R. F. Dickerson. "Any time you have a good idea, I think companies are going to buy it." Dickerson does not think that indus try ever felt real reluctance to use good technology coming from the outside. Others, however, such as Research Corp.'s Marcy, say they have seen a definite dying out of the NIH syn drome within the past 10 years. Dvorkovitz, too, thinks that indus tries are considerably more willing to license outside technology now than they were in the past. Some of the door-to-door peddling of licensable technology that his company and oth ers have done over the past 15 years may be some of the reason for this shift. Licensing has gotten a boost in the past couple of years, too, he says, from the cutback in industry research budgets that has been occurring. Com Dr. Louis Pytlewski of Drexel Universitypanies are realizing that it is much works with inorganic coatings that resistcheaper to license technology that al soiling or give water-repelling material ready has been initially developed than an affinity for water. Patented method to redevelop it from scratch in their for making the coatings is licensable own research departments. More and more companies are coming to realize through Research Corp. that the key to new technology ad mercial developments for most of that vances is not coming up with new ideas time. A comparable new drug advance as much as it is recognizing which new today, under exclusive license to one of ideas have commercial application for the major drug companies, would reach that particular company. Hence, valu the market much faster, even with to able new technology can come from day's much more rigid safety require anywhere, including licensing. ments. Industries presently have one foot on Specific indications of the changes the gas pedal and the other on the taking place at universities center brake when it comes to technology li on changes in patent policy. The censing, explains Bruce Dalbo of Dr. first step toward a regular program of Dvorkovitz & Associates. They are def technology licensing is to establish a initely more interested in finding use regular place for patenting in the pro ful available technology than ever be cedures of the university, explains Dr. fore, but the recession makes it a bad Lawrence Gilbert, director of patent ad time for them to be introducing new ministration at Massachusetts Insti products or beginning new develop tute of Technology. MIT and several ment ventures. Once the recession is other high-technology schools such as over, he says, his company expects the the University of Wisconsin, Stanford brake to be released and a surge of University, and California Institute of technology licensing to follow. Technology have had formal patenting MIT's Gilbert sees much the same and licensing programs for many years. situation at his university. He has been Today, however, Gilbert sees a seeking companies interested in a ground swell in the number of other joint-venture arrangement to further schools trying to establish similar pro develop a number of new antibioticlike grams. About half a dozen schools have compounds. He has not been able to contacted MIT within the past year, he sell any of these projects to drug com says, to find out exactly how their pat panies in the past year. But many of enting program operates. At least a these companies probably would have dozen other universities have hired been interested in a more normal peri people within the past year and a half od, he says. These companies might li to work exclusively with patenting of cense a fully developed product, he new technology, Gilbert says, and a says, but if R&D funding is required number of other schools have designat for development, they are not inter ed a specific person already within the ested right now. He says a similar sit school's administration to serve as the uation exists in other technology areas. focal point for technology patenting. Still, there is an increasing amount of As for the reluctance of some indus industry-sponsored research going on, tries to invest in technology that did he says, in part because universities 12
C&EN August 25, 1975
are more willing to enter into agree ments to do it. And MIT's licensing for the year may well hold at its usual lev els despite recession problems. On a national scale, the increase in interest in licensing on the part of both companies and universities can be seen in part by the success of the Uni versity/Industry Forum that has been held annually for the past three years to offer universities a place to exhibit their licensable technology before pro spective buyers. Sponsored by Dr. Dvorkovitz & Associates, this year's forum, held in February in Chicago, attracted 45 universities and 150 com panies looking for university technolo gy. This is about the level of atten dance of the 1974 forum, which, con sidering the nature of the economy last February, is considered a sign of strong interest in the field. Next year's forum will offer technology for licensing from industry as well as universities, and both companies and universities al ready are expressing strong interest, according to Dvorkovitz. Other signs of current interest in clude the newly organized Society of University Patent Administrators, a spinoff from the older Licensing Exec utive Society, designed particularly to assist schools that are just getting into technology patenting and licensing. This group, which will have its first meeting at this winter's University/In dustry Forum, already has attracted 30 university members, more than half of which are schools that have not been involved previously in the licensing process. α
Decontrol of natural gas prices hoped for When Congress reconvenes next week, one important piece of unfinished busi ness that will command quick atten tion is what to do about the natural gas shortage. Petrochemical companies will be watching developments careful ly. And while they are watching, they will be hoping that, among the several proposals bouncing around in the Con gressional hopper, the one that sees daylight will permit some form of price decontrol on natural gas. The petrochemical industry will not be alone. Many other users of natural gas, along with gas producers, have been beating the drum for decontrol. They believe that allowing gas prices to go higher is the only way to give producers an incentive to drill more wells and to reverse the downward trend in natural gas production. As a spokesman for the Petrochemical Ener gy Group points out, "We would rather have natural gas at higher prices than no gas at a lower price." PEG is an ad hoc group of 23 independent petro chemical companies. It isn't difficult to see why the petro chemical industry is concerned, even
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CIRCLE 13 ON READER SERVICE CARD
though it isn't one of the largest natural gas consumers. Petrochemical companies consume 7.2% of the U.S.. natural gas output—4.6% as fuel and another 2.6% as feedstock. Most of the feedstock goes into synthesizing ammonia. What is important, however, is not how much the industry's gas consumption means to gas producers but rather how much this gas means to the petrochemical industry. Last year, the industry obtained 53% of its fuel requirements from natural gas. As a petrochemical feedstock, natural gas represented 25% of the total. In addition, the petrochemical industry depends heavily on the products that come out of natural gas processing plants. It uses virtually all of the ethane and about 35% of the natural gas liquids (propane, butane, and butanepropane mix) as feedstock. Combined, natural gas and natural gas liquids, including ethane, account for 57.8% of the industry's total feedstock requirements. Little wonder, then, that the industry will be watching developments on Capitol Hill, particularly in the Senate. There, one major bill, three major amendments that would completely revise the bill, and several lesser amendments await attention. The bill is S. 692, the Natural Gas
Petrochemical industry depends heavily on natural gas PERCENTAGE BREAKDOWN (BTU)
Gas
1974 consumption
FUEL (trillions of Btu) FEEDSTOCKS Natural gas (billions of cu ft) Ethane (millions of bbl) Propane» (millions of bbl) Butaneb (millions of bbl) Butane-propane0 mix (millions of bbl) Heayy liquids (millions of bbl)
proNatural cessing gas plants Other
912
1031
Total
Gas proNatural cessing plants Other gas
1943
53 %
550
550 118
7
125
13.8%
0.7
14.5
60
25
85
9.3
3.7
13.0
49
6
55
8.7
1.3
10.0
6
4
10
1.0
0.5
1.5
150
150
36.0
36.0
25 % 32.8% 42.2% 100.0%
Feedstock totals
Production and Conservation Act of 1975. Petrochemical companies think as much of S. 692 as defensive linemen think of quarterbacks. Basically, S. 692 continues wellhead price regulation of most natural gas. It allows the Federal
Power Commission to set new, higher rates, ranging from 40 cents to 75 cents per thousand cu ft, with higher rates for some independent producers. The present rate on the interstate market is 51 cents. Intrastate gas, which is un-
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25.0
25.0
a Includes propylene, b Includes butylène, c Includes isobutane. Sources: Arthur D. Little Inc., Bureau of Mines
PRODUCT
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Total
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regulated, has been moving at rates as high as $2.00 per thousand cu ft, al though prices have dropped lately to about $1.50. PEG officials think that S. 692 will discourage exploration for new gas by continuing price ceilings on new inter state gas. What's worse, the bill would extend price regulation to intrastate gas for the first time. Testifying for PEG earlier this year before the Senate Commerce Committee, Celanese vice president Thomas J. Devine said, "We see no justification whatever for inflict ing the miseries, failures, and bank ruptcy of federal regulation on intra state natural gas markets." Even FPC
favors deregulation of new natural gas, PEG points out. PEG also dislikes another provision of S. 692 that would make synthetic natural gas plants subject to FPC rate base and cost-of-service treatment. PEG has fought long and hard against diverting petrochemical feedstock to SNG plants. PEG calls the diversion wasteful, inefficient, and expensive be cause SNG plants merely convert one clean fuel into another form—and at a considerable loss of heating value. PEG officials estimate that S. 692 would cost the petrochemical industry at least 15% of its feedstock supplies. Fortunately from PEG's point of
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CIRCLE 17 ON READER SERVICE CARD 16
C&EN August 25, 1975
Natural gas production heads downward Trillions of cu ft
23
0 1965
67
69
71
73
75·
a C&EN estimate. Source: Bureau of Mines
view, there are alternatives. A strong surge of support for decontrol just be fore Congress recessed kept S. 692 off the Senate floor. Now, several amend ments probably will accompany the bill when it does reach the floor. The one that the petrochemical industry is pinning its hopes on is the PearsonBentsen amendment [named after Sen. James B. Pearson (R.-Kan.) and Sen. Lloyd Bentsen (D.-Tex.)]. This amendment grants immediate decon trol of all new onshore gas and provides for phased decontrol of offshore gas, with price ceilings ending after 1980. Sen. John V. Tunney (D.-Calif.) has a proposal similar to the Pearson-Bentsen amendment, except that he would permanently control offshore gas at higher price levels. There are others, but PEG favors the Pearson-Bentsen amendment as the best of the lot. What's more, PEG offi cials who watch the Washington scene think that it stands a good chance of being accepted as the best political compromise. If prices on new natural gas are de controlled, it's difficult to say what ef fect it will have on petrochemical feed stock and fuel costs other than to in crease costs along with gas prices. However, the effect probably won't be too burdensome. Natural gas decon trol will have no effect on prices of pro pane and butane. These fall under the umbrella of the crude oil price and al location program that President Ford has threatened to veto. Meanwhile, about 80% of the natural gas used as fuel by the petrochemical industry comes from intrastate sources (chiefly Texas and Louisiana). This gas isn't price controlled, but already is re sponsive to market demand. Thus, the burden of decontrolled gas prices will fall upon only the 20% of the petro chemical industry's requirements that come from the interstate pipeline. Earl V. Anderson, C&EN New York
