Status of Chemical Industry- 1951 G. L. PARKHURST ORONITE CHEMICAL CO., 38 SANSOME ST., SAN FRANCISCO 4, CALIF.
western states have T Henjoyed E a long con-
I n the Far West, the population is increasing at a greatel, rate than is reported for any other section of the United States. Industrialization is expanding, but as yet the Far West cannot supply many of the raw materials used in major manufacturing activities. Increased capacities, which will help balance western supply with western demand, are scheduled for the production of important chemicals such as potash, sulfur, phosphorus, chlorine, ammonia, phenol, benzene, and phthalic anhydride. In addition t o its chemicals from industries based on natural resources, the Far West is developing other products which can compete €ordistant markets ; these include chemicals from petroleum, certain chlorates and perchlorates, sodium glutamate, and methionine. Currently, major deficiencies are in supplies of methanol, formaldehyde, and __ vinyl chloride.
tinued population increase. During almost all periods within the last century the rate of population increase has exceeded that of other parts of the country. This trend continues. To a large extent this population increase has been based on the direct natural resource industries and on agriculture. Although industrialization of the \Test has proceeded apace in recent decadep, and most strikingly in the last decade, industrialization still lags behind population as compared with the most highly industrialized sections of the United States. This is true whether the West is defined as embracing one, two, or three tiers of states, or in other words a three, seven, or eleven state area. I n general, this paper discusses the nine states included in the Bureau of Census Far West area although niuch that is said applies most strongly t o the three states bordering the Pacific Ocean. The chemical industry has like\\-ise had a rapid growth in the Far West. Available figures are few (Table I). Horvever, the Census of Manufactures reveals that production x-orkers in the chemical and allied products industries increased by 100% in the western states in the period 1939-47 compared with a 69% increase for the country as a whole. Despite this rapid growth, the \vestern chemical industry has not caught up xith the phenomenal population increase of the area.
Table I. Far West Production of Representative Chemicals (Area population, 13% of total United States) Estimated L-ationa! Far West Production Production in IQZO,T h o u s a n d % of C. S. Chemical Unit Thousand units units total 1,918n 200 10.3 Caustic soda Tons 154 1,770’7 8.7 Tons Chlorine 710 6.6 10,800n Sulfuric acid Tons 56 1 ,l l o a 5.0 iiitric acid Tons 13,000 201,060 0.5 Benzene Gallons 165,000 4,500 2.7 Gallons Ethanol (95%) 0 0 913,774 Pounds Methanol 133 1,562 8.5 Tons Ammonia 510,522 0 0 Pounds Ethylene glycol 55,000 8.4 540,000 Pounds Styrene 0 286,500 0 Pounds Vinyl chloride 12,000 5.5 220,000 Pounds Glycero! 45 12.2 480b Tons Butadiene production. 1949 b Rate of production a t end of ’ 1050. Q
The consumplion of chemicals in the western states in 1950 was probably less than 6% of the nation’s total, as contrasted with a population which constituted 13% of the nation’s total. I n terms of inorganic chemicals, the consumption is more nearly in line with the population-namely, about 8%; in terms of organic chemicals the figure is probably less than 4% of the nation’s total consumption. The western states, in general, supply their own needs in heavy chemicals. Moreover, in some specialized hut very important 2648
products, heavy chemicals of an “extractive” nature are supplied by the xestein states to the rest of the nation. The fact that the Far \Vest is at least selfsufficient as to heavy chemicals is due in part to abundent natural resources and in pa .t to economic necessity. The iiecessity arises froni high trimportation costs as coniparer! xiith product value a t the point of manufactuie. As a loose generality, the ratio of mestern production to western ao~~sumptionof chemical products is an inverse function of product price. There are few chemical products in the one to five cents per pound category in which the western states are not substantially self-sufficient. As prices iiicreaee, there is a higher proport,ion of chemicals of which there is no wcstcrn production or a deficient western production. At the other end of the price scale (chemicals which are sold for dollar^ per pound rather than cents per pound) relatively few chemicals are manufactured in the western states. These generalizations, t o which there are niany exceptions, have a ready and obvious firplanation. Tonnage chemicals selling a t low unit’ prices must’, if a t ail possible, be made close to the point of confuniption if t h e cost to the consumer is to be within reason. Conversely stated, a manufacturer of a heavy chemical selling a t a small unit price can compete very succ,essfully with a distant supplier even though the local manufacturer may have somerThat, higher manufac furing coste than those of thg distant supplier. A4sunit values rise, the economies incident to large scale manufacture tend t,o become the dominant considemtion and transport,ation costs become niuch less important. There is a familiar concept in the chemical industry known as “minimum economic scale of manufacture.” Although this concept is not susceptible to rigid mat,hematical analysis, it nevert,heless has a considerable degree of reality. This is particularly true of products -xhich can he made by continuous processes utilizing equipment that can be construct’ed in almost any desired size. Somewhere along the &art uf uiiit costs versus scale of ma,nufacture the curve tends to fla’iten out. On tlhiR part of the curve a point is chosen and c a l l d the “minimum economic scale of manufacture.” For many chemicals, primarily organic in nature, the capacity of a plant of minimum economic size is greater than the available market in the western United Slates. However, with continued growth in population, followed by expancliing industrialization, more and more chemical markets reach a size that permits the installation of manufacturing facilities to supply western ma,rkets. With these facts in mind, the Far West chemical industry may be analyzed and divided into various segnbt::it3 on the basis of the following economic breakdown: 1. Those parts of the chemical industry that depend on utilization of natural resources of a unique or a t least unusual character 2. Those parts of the chemical industry t h a t do not depend on unique or unusual natural resources and are directed to the
INDUSTRIAL AND ENGINEERING CHEMISTRY
December 1981
supply of chemical producta wholly or mainly for consumption in
the West 3. Those parts of the chemical industry that do not depend on unique or unusual natural resources but nevertheleas serve to supply a national or world market
In the first subdivision, among the prime examples of chemical dwelopments based on unique or unusual raw materials are such heavy chemicals as borax, pot&, and natural soda ash. The manufactureof salt by solar evaporation and phosphorus, which will be d e e d to later, might also be placed in this category. The interesting and expandhg lit of chemicals made from wood and m o d wastes is worthy of mention; BO also is algin and its derivatives, made from seaweed. Perhaps the industries utilizing large quantities of hydroelectric power could be included with those based directly on unusual natural r e s o w . If so, such diverse developments as the production of aluminum and hydrogen peroxide would follow. The chemical dwelopmenta in the Far West, based solely or primarily on the exietence of western markets, wmpriea a vast congeries of pmjects and pmducts. Included BIB such important chemicals 88 sulfuric acid, caustic soda, chlorine, nitric mid, and butadiene in which the West in in appmxunste balance between supply and demand. A substantial portion of western 9 u i m e n t a for benzene, phthalic anhydride, ammonia, and phenol are produced in the area, but it is not yet self-su5cient. PI-, announced or impending, for the construction of new plants should bring s ~ p p l yand demand for these products into approximate balance. A recently announced ethylene glycol plant, the first m the West, should supply a quantity of this chemical regsonably in balance with demands. Prominent among the remaining major deficiencies are methanol, formaldehyde, and vinyl chloride. These are relatively low-priced chemicals, and the dbiencies are due to relatively high raw material (natural gas) values in the West and the fact that
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chemical industry are those in which a national or world market is served !: despite the fact that the chemicds involved are not baaed on unique or unusual natural resources. Developments of this nature revem the historically normal flow of goods fmm . ,. ., . , , .. Eaat to West within the continental , , , . United States. They take advantage of the fact that New York is no farther fmm 9an Francisw than Sari Francisco is from New York. This is an obvious truism from a geographicalstandpoint. The difficultyfor the western chemical industry lies in the circunstance that the eastern manufactuer is likely to 6nd the bulk of his market in the eastern United States and only a small part of it on the other side of the continent, whereas the western manufacturer must, in many instances, deliver the major part of his product at a great distance from hia plant location. The successful development of distant markets reyiree a set of circumstances which includes the ability to construct a highly economic plant and the ability to minimize transportation costs. I n many instances, transportation costa can be greatly reduced by taking advantane of water movements. If chemicals have a-monably high &it value and am adaptable to movement by tanker, transportation chsts often constitute a relatively minor element. When these conditions prevail, a western plant cm become economically feasibleeven though the minimum economic capacity greatly s~ceedsthe &e of the western market. Such industrialization can be based either on the concept of a plant ,(
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INDUSTRIAL AND ENGINEERING CHEMISTRY
which throughout its life will ship a major portion of its output to distant markets or on the concept of a plant having a capacity well in excess of the present consumption in the western states but in line with western market demands anticipated to develop a t some future date. Examples of branches of the Far Rest’s chemical industry which serve a national or Tyorld market rather than a purely local one occur often in the so-called petrochemical field-for example, detergent intermediates, p-xylene, and various ketones and alcohols such as acetone and isopropyl alcohol. Examples from other fields include sodium glutamate] methionine, and certain chlorates and perchlorates. Reverting to the r a v material situation, the Far JVest has made rapid strides in recent years, and particularly in recent months, toward self-sufficiency in sulfur supplies, utilizing sulfur compounds from petroleum refineries, from unusual natural gas fields, and from other sources. Much progress has also been made in increasing the production of ammonia and its derivatives to bring westein supply more nearly in line m ith western demand. Great advances are being made in the manufacture of phosphorus; construction of three multimillion-dollar plants has recently been announced. Major expansions have also occurred in potash production. The agricultural pre-eminence of the Far West has also encouraged expansion of insecticide manufacturing
Vol. 43, No. 12
facilities, and the current chlorine expansion program includcs a t least four important western projects. The availability of hydroelectric power in the Northwest has, in addition to chlorine manufacture, led to expansion in other fields previously mentioned. Some major gaps remain: The pharmaceutical industry is underdeveloped, and a dyestuff industry is almost nonexistent in the \Test. The Pacific Northm-est is one of the great lumbering areas of the lvorld but lacks a rayon industry. California is an important cotton-groiving state and a great center of clothing design and sportswear manufacture] but’ the textile industry is largely absent. Likewise, California is prominent in the nianufacture of plastic articles, but the chemicals from which these plastics are made usually come from other areas. A recent exception is polystyrene, now made in California. There are, of course, major problems in filling these gaps; otherwise the gaps xould not exist. However, it seems obvious that they will be filled, as so many other gaps in the mstern chemical industry have been filled in the recent past. Indeed, the very term “western chemical industry” is almost a guaranty of continued rapid strides, for it refers to an area in which the pioneering spirit is most t’horoughly alive and to an industry Tvhich has an unsurpassed vitality and growth potential. RECEIVED September 20, 1951.
Raw Material Availability A. C. BYRNS AND FRED LOHSE KAISER ALUMINUM & CHEMICAL CORP.. 1924 BROADWAY, OAKLAND 12, CALIF,
The Far West, i n spite of its late start, vast distances and extremes of climate, difficulties i n transportation, and relatively small population, has already established a thriving chemical and chemical process industry. A rapid increase i n population, establishment of other chemical consuming industries and new process developments may be expected to give a good rate of future growth. Many raw materials, hardly touched i n the past, will soon be used, and new materials will be found i n many of the areas only poorly explored i n the past. Salt, sulfur, coal, petroleum, alkalies, lime, and a host of other vital ma-
terials are available within the West and it seems not u n likely that entire new industrial areas may soon be developed. Typical of new developments of this nature have been the chemical transformation a t Henderson, Nev., and the production of electric furnace phosphates i n the Idaho area; the latter should soon be the United States leader i n this field. The problem is not one of raw material availability; i t is rather one of distances, transportation, and a population growth which will open u p adequate local markets to justify their increased developm e n t and use.
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spread north and eastm ard. The romance of this era 11 ab a rcal part of all our youthful hours with stories of the Pony Expiess, and the developments of mines, cattle ranches, and agriculture, until finally a railroad \?as built to span the continent. Those very things ahich have made the history of the JJ est so romantic] and made it a familiar vacation area for millions, have restrained its general industrial growth until recently. Vast and steep mountain ranges made railroad construction difficult, with access to only major areas. Of a total area of 960,000 square miles, theie are probably a t least 200,000 squaie miles not served by railroads, and navigable waterways are virtually unknown. Primitive areas still exist which have been almoet totally unexplored for raw materials of interest to the chemical and chemical process industries. Until the advent of the automobile and truck, the industiial growth of the Far K e s t mas slow and dependent mainly on a few natural advantages. This growth has been speeded by the automobile and good highways which opened up many othera ise inaccessible areas to economic transportation. World War I1 added further impetus to industry generally, and greatly speeded the groxth of population, a trend which has continued since. Perhaps as much as any single factor, this population growth hap.
HE Far West is still the frontier of the chemical and chemical
process industries, just as it has been the last land frontier of the United States. The story of chemical raw materials must be the story of the tT7est and its development; it is a story of distances and extremes, of a people x-ho came for gold and stayed to develop a new land. It is a story of long treks across the continent by covered wagon or around the Horn by ship, of traders and trappers %Thoventured into the distance and brought back the picture of vast areas suitable for agriculture and cattle. It is the story of nearly a third the area of the Cnited States, extending 1200 miles from the Canadian line to the Mexican border and nearly 900 from the Olympic peninsula to the eastern boundary of Montana. It is the story of a chemical industry which received its start in the long desert trek of twenty-mule teams hauling borax from Death Valley. Even today this area represents a good example of extremes, Jvith potash, borax, and other chemicals produced in the desert area of California and tungsten mined within 200 miles a t an elevation of 11,000 feet where s n o w stop all winter operation. It is the story of a romantic era which started on the Pacific Coast with the discovery of gold and the rapid rise of San Francisco Bag as a port and trading area, Yith a population which
