INFLATION: Company blames Uncle
Sam for high raw material costs
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OW CHEMICAL is raising prices for all of its products in response to escalating energy costs. Dow, the largest U.S. chemical producer, says prices for some products could increase by as much as 20%, depending on how hard their production has been hit by rising feedstock, energy, and transportation costs. CEO Andrew N. Liveris says his company’s feedstock and energy bill increased by 42% in the first quarter of 2008 compared with the same quarter last year. At current rates, Liveris adds, Dow’s combined energy and feedstock costs could hit $32 billion this year, quadruple what they were in 2002. According to Liveris, Dow’s unusual action stems from the U.S. government’s failure to develop a comprehensive energy policy—a failure that he claims has undermined the competitiveness of U.S. manufacturers. “For years, Washington has failed to address the issue of rising energy costs, and as a result, the country now faces a true energy crisis, one that is causing seri-
SCIENTISTS PROTEST IN FRANCE EUROPE: Researchers object to proposed restructuring of CNRS
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HOUSANDS OF SCIENTISTS in 10 cities across France marched in protest on May 27 to voice their disapproval of a proposed reorganization of the National Center for Scientific Research (CNRS), the country’s prestigious research agency. The scientists were reacting to statements by Valérie Pécresse, the French minister for higher education and research, who told the newspaper Le Monde that the government of French President Nicolas Sarkozy was planning to split CNRS into six separate institutes. Pécresse could not be reached for comment by C&EN’s press time. Pécresse told Le Monde that existing CNRS departments, which are sprinkled across the country, will be reorganized into separate institutes for chemistry, physics, engineering science, mathematics, and ecology and biodiversity, as well as humanities and social science. The silo-like restructuring “has a savor of the 19th century,” says Bruno Chaudret, director of the CNRS Laboratory for Coordination Chemistry, in Toulouse. He says some reforms could improve CNRS, but the ones proposed by Pécresse motivated him to join the
march in Toulouse, where demonstrators made a small pyramid of theses and papers amid “pouring rain.” Notably left off of Pécresse’s list of new CNRS institutes were life sciences and computer informatics, says Fabrice Rappaport, a group leader at the CNRS Institute of Physicochemical Biology, in Paris, where some 3,000 people marched in the streets. The government plans to link many existing life sciences departments, which account for 23% of CNRS’s current budget, to the National Institute for Health & Medical Research (INSERM). Chaudret worries that the merger would harm fundamental life sciences research in France. Another source of concern, Chaudret says, is Pécresse’s suggestion for how the heads of these new institutes will be selected. Pécresse told Le Monde that the ministry of research, rather than CNRS, will make final selections. However, scientists worry that government decisions about CNRS leadership “could be swayed by politics or industry,” Chaudret says. Pécresse made her restructuring announcement while the government was still in the midst of a discussion series with CNRS scientists about possible ways to reform the agency, Rappaport adds. “Many people feel a bit betrayed by this act of the government,” he says.—SARAH EVERTS
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ous harm to America’s manufacturing sector and all consumers of energy,” he says. T. Kevin Swift, chief economist for the American Chemistry Council, a chemical industry association, says he is seeing weakening demand for chemicals in the U.S., driven by the fallout from the subprime mortgage crisis and escalating energy and raw material costs. “Rising prices for energy end up ultimately filtering through to the consumer,” he points out. Fred Peterson, president of New London, N.H.based Probe Economics, says Dow’s increase shows that inflation of consumer product prices is inevitable. “It supports the notion that $130 [per barrel of ] oil is indeed hurting and is not sustainable,” he says. “Something has to give.” But so far, according to the Bureau of Labor Statistics, energy price increases have been outstripping overall inflation. The consumer price index increased 3.9% in April versus the year-ago period, or 2.3% excluding increases in food and energy prices. Meanwhile, the bureau’s energy price index increased 15.9%. The pricing move is rare, but Dow isn’t the first company trying an across-the-board increase. Earlier this month, specialty chemical maker Rohm and Haas instituted a surcharge based on an index of energy costs. And following the lead of these companies, Huntsman Corp. last week said it would increase all of its selling prices—some by as much as 25%—and enact an energy surcharge for some products.—ALEX TULLO
Liveris
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DOW CHEMICAL HIKES PRICES
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French researchers in Bordeaux march with a sign that says “Let’s Save Research” to protest a proposed restructuring of CNRS.
