Natural gas decontrol may lower prices President Reagan's long-anticipated natural gas deregulation proposal has arrived on Capitol Hill, and Energy Secretary Donald Hodel asserts that, if it is enacted, the price of natural gas may drop by as much as 10 cents to 30 cents per thousand cu ft in the first year after enactment. The gas price may drop even more if oil prices continue to slide. The proposal calls for total deregulation of the wellhead price of natural gas by 1986 through negotiation of new contracts or renegotiation of old ones. On Jan. 1, 1985, any contract that has not been renegotiated could be abrogated at the request of either party. In response to the energy shortages of the 1970s, many gas consumers locked themselves into high-priced contracts. Conversely, some consumers have so-called sweetheart contracts, negotiated some years ago, that give them a very favorable price on natural gas. But in each case at least one party to the contract would have a reason to renegotiate. Consumer protection is built into the bill, the Department of Energy says, because it includes a moratorium on the automatic "pass through" of costs greater than inflation. The bill also places a cap on prices, so that they could not go higher than they would under existing controls. One chemical industry analyst, Thomas Beasley, petrochemical specialist with Chemical Market Associates of Houston, doesn't expect decontrol to greatly affect feedstock prices in the short run if it is enacted—and the proposal was greeted with some skepticism in the House. As Beasley explains, a month ago in the U.S., 80% of the ethylene produced was from natural gasbased liquefied petroleum gas (mostly ethane) and 20% from oil-based naphtha and gas oil. "Today," he says, "there has been some shifting— not to as much as 75:25 yet, but ultimately it may get there. It depends on distillate pricing. If the Organization of Petroleum Exporting Countries can achieve price and production stability, even with oil at $28 per barrel, it would firm up
distillate prices. But with this chaos, distillate prices are weak." Further, Beasley says, "If you believe the price of gas will go to $5 per million Btu, then decontrol would affect the ethane price strongly. But if you believe the price of gas will be between $3 and $4 per million Btu, then decontrol won't affect ethane other than perhaps to set a slightly higher floor for it." D
EPA "hit list" fuels agency controversy Revelations continue to pour forth concerning Anne M. Burford's administration of the Environmental Protection Agency. Last week's big news was leakage of a "hit list" of technical advisers not politically acceptable to the agency. (For more on EPA controversy, see page 20.) The list describes Sheldon K. Friedlander, chemical engineer at the University of California, Los Angeles, as a "red hot" environmental advocate. Matthew S. Meselson, a Harvard University biochemist, is "poison." Robert E. Sievers, a University of Colorado physical chemist, was to be given the heave-
ho, the list says. Chemist Nicholas Ashford, director of the Center for Policy Alternatives at Massachusetts Institute of Technology, is "a menace." Only Friedlander's term on EPA's Science Advisory Board was renewed. Not all the comments are negative. One person listed as "very good" is Julius E. Johnson, recently retired research director at Dow Chemical. Johnson had his term extended for two years. But one whose term was not renewed, and who wishes to remain anonymous, believes the list represents a sad day for science and the chemical industry. "The suspicion is going to be that the chemical industry ganged up with the toadies at the agency and caused all these changes. And the agency is going to suffer because it will lose its best young people, and all that will be left will be overage yes men." But Terry F. Yosie, director of the board, believes the environmental community is exaggerating the significance of the list. He says he never saw it before last week and believes it came from "overenthusiastic" Reaganites after the 1980 election. Besides, he says, Burford made it plain at the beginning of her ad-
joint project to develop Metglas transformers A prototype of a utility transformer using Allied Corp.'s Metglas amorphous metal alloys—being checked here by Allied senior staff scientist Joseph Mas—is the focus of a new joint development program. Allied and Japan's Osaka Transformer Co. are joining forces to use Allied's design to develop a process for automated manufacture of the transformers, which, Allied says, will range in capacity from at least 5 kV-amp. Under the agreement, manufacturing procedures likely will be ready for commercial use by 1986, with Osaka having exclusive manufacturing and selling rights throughout Asia. With the promise of cutting power losses to one third those of conventional steel-cored transformers, the units with Metglas cores are only one of a number of Metglas applications being pursued by Allied (C&EN, Sept. 6, 1982, page 21).
March 7, 1983 C&EN
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