INDUSTRY
&
BUSINESS
Helium Conservation Program Aired Industry may balk at purchase price policy in Interior's fuel gas extraction program Congress has finally gotten around to taking a look at the Interior Department's helium conservation program. Last week the House Committee on Interior and Insular Affairs held hearings on Interior's plan to conserve helium by extracting it from heliumrich natural gas destined for the fuel market. This is the first time public hearings have been held on the subject since Interior sent its proposal to Congress in the summer of 1958. Up for committee consideration are two similar bills—H.R. 8451 introduced by Rep. Thomas Morris (D.N.M.) and H.R. 10548 introduced by Rep. Walter Rogers (D.-Tex.). Big difference in the bills is the procedure under which Interior will purchase helium from the proposed extraction plants. The Interior Department favors H.R. 8451 but industry backs H.R. 10548. Conservation Program. Every year about 4 billion cubic feet of helium
are wasted, Under Secretary of the Interior Elmer F. Bennett told the committee. Reason: Helium in helium-rich natural gas (He content: 0.39c or more) is vented to the atmosphere when the gas is burned for fuel. Under the bills, Interior would be authorized to build 12 plants to extract helium from the fuel gas before it goes to market. The extracted helium would be stored in a governmentowned gas field near Amarillo, Tex. Helium consumption is increasing rapidly, Mr. Bennett says. By 1963 demand is likely to outstrip the producing capacity of the present helium plants. Building the proposed extraction plants now has two advantages: Production capacity will be ready to meet higher demand; helium that would be wasted will be kept in the ground for future use. Interior expects that industry will build the helium extraction plants, Mr. Bennett says, and sell the extracted
Helium demand will outstrip production
helium to the Government for storage against future needs. One of the principal purposes of the bills is to amend the Helium Act of 1937 to give Interior the authority to purchase helium from outside sources. The proposed conservation program would run for 25 years. Total cost to the Government would be about $500 million, of which half would be interest charges, Mr. Bennett says. Outlays would be heavy in the first half of the period as the Government bought helium for storage. But this would be counterbalanced in the last half of the period as stored helium is sold. According to Mr. Bennett, the helium conservation program would pay for itself over the 25-year period if the selling price to the user were set at the right level. On the basis of present calculations this price would have to be about $40 per 1000 cubic feet. Government agencies now pay $15.50 per 1000 cubic feet; industrial users pay $19. Mr. Bennett thinks the higher price will have no effect on helium demand. Industry Views. Industry supports the helium conservation program and will probably build the needed extraction plants if the bills become law, John E. Lyle, a Corpus Christi lawyer, told the committee. Mr. Lyle represents Panhandle Eastern Pipeline and National Distillers and Chemical. Both firms have spent considerable time and money planning the construction of a helium extraction plant
Source: U. S. Bureau of Mines
Billions of cubic feet
Production from existing plants
1960 22
C&EN
1965 MARCH
21, 196 0
1970
1975
1980
1985
and favor the proposed legislation, Mr. Lyle says. Both companies support H.R. 10548, oppose H.R. 8451. Reason: price policy. Under H.R. 8451, the Secretary of the Interior is authorized to purchase helium "upon such terms as the Secretary deems reasonable." Under H.R. 10548, the Secretary is authorized to purchase helium "upon terms and at a price which are commensurate with the fair market price." Mr. Lyle thinks that the policy contained in H.R. 10548 is a much better basis for negotiating the selling price. However, Mr. Bennett opposes this concept. As he sees it, there is no conventional market in helium, hence, no market price. Today, the Government produces all the helium, and government agencies use most of it. He sees no reason for changes in the future. According to Mr. Bennett, the cost of producing helium at the proposed extraction plants would vary widely from plant to plant, principally because of differences in helium content of the available natural gas. The Government would expect to pay at each plant a price for helium that would be related to production costs at that particular plant, since price negotiations would be based on cost factors at each plant. This would probably result in a different price for helium at each of the plants. Mr. Bennett admits that the Government would be in a strong position in a price negotiation. But he points out that pressure to stop helium waste would temper any government desire to drive a hard bargain.
WHERE HELIUM IS U S E D NOW QUIDEO
ARC
MISSILES
WELDING
ATOMIC
ENER0Y
METBOROLOeY /AERONAUTICAL
RESEARCH]
AIRSMIRS OTHER
Columbia-Southern Plans Entry in EDC Race C-S will use its own chlorine, PCI's ethylene to make ethylene dichloride Columbia-Southern Chemical will become a customer for its own chlorine this fall when it completes an ethylene dichloride plant at Lake Charles, La. When the plant, which will cost over $1 million, goes on stream in September, it will mark C-S's entry into chemicals based on ethylene and will be the company's first captive use of its own chlorine. The new E D C unit is being built next to the firm's large chlorine and caustic soda plant at Lake Charles. C-S is the nation's second largest chlorine producer (Dow is first). Its total capacity is estimated at 1750 tons per day at four locations in the U.S. Ethylene for the EDC unit will come by pipeline from Petroleum Chemicals, Inc., three miles away. C-S isn't saying what its EDC capacity will be. It probably will range up to 100 million pounds per year. If so, this means that C-S will s i p h ^ off about 45,000 tons per year of it; Lake Charles chlorine output and w*** hike the country's EDC capacity to about 900 million pounds annually. The new plant will use a process developed by the company's research and development department at Corpus Christi, Tex. Pilot plant testing for the process also was carried out at Corpus Christi. The fortunes of EDC hinge almost directly upon vinyl chloride and tetraethyllead; both continue to roll merrily along. Vinyl chloride eats up about 70% of EDC production; tetraethyllead takes another 20%. Smaller amounts go into ethylene diamine, solvents, and fumigants. Vinyl monomer production, which in 1958 totaled 691 million pounds, is estimated to climb to something in the range of 900 million to a billion pounds by 1965. Outlook for tetraethyllead also is bright. Use of T E L in automobile gasoline will run around 485 million pounds this year and is expected to perk up to about 533 million pounds by 1965. TEL also goes into aviation gasoline, but consumption of aviation gasoline has been dropping steadily over the past few months. There are two ways to make vinyl
chloride: from hydrochloric acid and acetylene and by dehydrogenation (pyrolysis) of EDC. Right now the HCl-acetylene route seems to be the most popular, but there is a definite trend toward the EDC dehydrogenation process. Some observers feel that this trend may be reversed in a few years because cheap ethylene is becoming harder to get. However, others believe that it will be a long time before cheap ethylene peters out. Some companies use a combination of the two processes. They dehydrogenate EDC, get HC1 as a by-product. Then they feed in acetylene, react it with HC1 to get more vinyl chloride. About 10 to 15% of the ethylene dichloride produced in the U.S. is used captively. Columbia-Southern has no plans right now to use the EDC it will make, however. Nevertheless, the company is known to have been looking hard and seriously at the methyl chloroform picture.
Monsanto Acquires Option on Texas Land Monsanto Chemical has acquired an option to buy 3000 acres of Texas land. The land, adjoining Chocolate Bayou, is in Brazoria County, about 25 miles west of Monsanto's Texas City styrene plant. Monsanto's 60-day option contract can be renewed for another 60 days. As yet, Monsanto hasn't decided to buy the land, but it does point out that good industrial land is getting hard to find—especially near navigable waters—and that the price is climbing with no indication of dropping. The company also explains that it wants to avoid becoming boxed in at Texas City as it has become at St. Louis and elsewhere. Monsanto's reason for obtaining the land option is that it wants to have plenty of land available when it gets ready to expand. Monsanto has purchased 650 acres in Gloucester County, N.J., 350 acres at Oxnard, Calif., with an option on 100 more, and 700 acres at Nitro, W.Va.—all with an eye to having good industrial land available when needed. Monsanto is now running soil tests to determine if the Texas property, owned by Houston Farms Development Co., Houston, is suitable for industrial uses. Bechtel Corp., San Francisco, helped Monsanto to evaluate the site. MARCH
2 1 , 196 0 C & E N
23
