Tax on Lead - C&EN Global Enterprise (ACS Publications)

Jun 1, 1970 - The impact on the chemical industry of President Nixon's proposed tax of about 2.3 cents a gallon on leaded gasoline is uncertain at thi...
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purine antimetabolites limits design of new drugs, Dr. Montgomery says. He suggests three knowledge limits on which design can be based. One of these is the amount of metabolism of purine analogs. Another is the mechanism of action of these analogs in how they affect cells. The third is the effects of alterations in the chemical makeup of the analog on the amount of metabolism and on the mechanism.

PETROCHEMICALS:

Clear Sailing at Taft Union Carbide's trouble-plagued complex at Taft, La., is entering a new phase of its short lifetime—smooth operation. All of the units are now running at capacity or at rates needed for current market demands, except for an acrylates unit being started up, says Carbide's chemicals and plastic operations division president, Robert D. Bower. In fact, Mr. Bower optimistically remarks, the Taft plant "is running as well as any plant in the chemical industry." Mr. Bowrer indicates that the major problems that plagued the Taft plant for more than two years were mostly solved by last August. Its operation since then has continuously improved, he says. Many lessons have been learned from the engineering, construction, and startup problems of the plant, Mr. Bower notes. Especially, he adds, plant officials have learned the importance of a stable system of utilities for a plant with new technology used in units larger than ever before built. Experience developed at Taft will be helpful in building and staffing the Carbide plant under construction at Ponce, P.R., Mr. Bower says.

Many of the problems at Taft were not caused by design, size, or technology, company officials explain. Personnel was stretched too thin initially, and the plant was staffed for computer control over the long term. Result: During startup of various units, the available staff couldn't handle all the "bugs" in the equipment. Timing caused other difficulties. Because of construction labor problems, completion of the basic-oleflns complex was a year late. It had to be started up at about the same time as was a peracetic acid complex that uses raw materials from the olefins complex. Now, except for the new acrylates unit, all of the plant's units have demonstrated full-capacity production, says George H. Daniels, plant manager. Currently, the plant is using as feedstock 12,000 barrels per day of a medium naphtha (250° to 400° F. boiling range), 3000 barrels per day of ethane, and 4000 barrels per day of propane. An all-naphtha feed could be used in the plant, the company says, but not an all-ethane feed, because the mixture from the cracking furnaces would be too low in density to permit the cracked-gases compressor to operate economically.

GASOLINE:

Tax on Lead The impact on the chemical industry of President Nixon's proposed tax of about 2.3 cents a gallon on leaded gasoline is uncertain at this time. Some oil and chemical company officials view the proposed additional tax as unlikely to go into effect soon. These officials point out that by the time the tax is in effect, gasoline may contain

THE CHEMICAL WORLD THIS WEEK

less lead alkyls because auto manufacturers will have modified car engines beginning with the 1971 models to require lower octane fuels. The proposed tax is actually $4.25 per pound of lead used in gasoline. If refiners use less lead alkyls in gasoline, as some plan to do this fall, the added tax per gallon will be less than 2.3 cents. Government officials arrive at the proposed tax of 2.3 cents a gallon by using an average of about 2.5 grams of lead (added as lead alkyls) per gallon of gasoline in the U.S. The first effect of the tax, if it significantly affects competitive positions of various gasoline marketers, will be to increase prices for aromatics. To make more aromatics for fuels containing small amounts of lead or no lead at all, refiners first will increase use of catalytic reformers that make aromatics and will increase operating severity when possible. Aromatics have relatively high octane values and are relatively less sensitive to the absence of lead alkyls to raise octane than are paraffins. Additional quantities of low-octane paraffins, which could be useful feedstocks for olefin units, will be made if more reforming is done. If the raffmate (largely paraffins) left after extraction of aromatics from reformate is used in olefin plants, there could be increased output of olefins for possible use in alkylate for gasoline. Alkylates of olefins and isobutane do not have as high an unleaded octane value as do aromatics, but the octane is high enough to be suitable for regular-grade gasoline. The net impact on supplies of olefins as raw materials for other chemicals and polymers could be mild over the long term.

Carbide's Taft plant produces these major volume products Product

Capacity (millions of pounds per year)

Ethylene^ Propylene b Butadiene Alkylamines Acrylates c Peracetic acid Peracetic acid derivatives Glyoxal Ethylene oxide Ethylene glycol Benzene Other a r o m a t i c s Glycol e t h e r s Ethyleneamines

500 250 95 100 200 120 200 100 350 300 100l1 103'1

:i

Wulff unit makes additional 16 million pounds per year. Also makes 8 million h pounds of acetylene. Current output; varies with feedstock. c Startup; not yet demonstrated capacity. d Millions of gallons per year. ° Varies widely depending on product mix. 18 C&EN JUNE 1, 1970

Carbide's Taft, La., complex consists entirely of large-scale units

Cost changes, because they might affect supplies of aromatics and ole­ fins, are harder to pin down than op­ erating changes. If the 2.3-cent pro­ posed tax is a maximum and octane values hold at present levels, compe­ tition might add 5 cents a gallon to aromatics prices. The 2.3-cent figure can be con­ sidered indicative of the additional cost of making unleaded gasoline now, one refining consultant suggests. This is especially so since the idea for the added tax may have come from testi­ mony on March 25 by Robert C. Gunness, president of Standard Oil Co. (Ind.), the only major producer of unleaded gasoline, to a Senate sub­ committee on air and water pollution. Mr. Gunness said that unleaded gaso­ line costs more to make and must carry a higher price. The tax would equa­ lize the cost of leaded and nonleaded gasoline and eliminate a price penalty for people using nonleaded fuel.

CHEMICAL INDUSTRY:

New Route to Profits The chemical industry for years was profitable in spite of poor management but has now reached the age of ac­ countability. To bolster eroding prof­ its, the industry must develop new technology attuned to a shifting soci­ etal emphasis; combine chemicals, equipment, and know-how into a sys­ tems package instead of just selling chemicals; and integrate forward all the way to consumer products. These were the opinions of participants in a panel discussion on new directions for the chemical industry last week in Cleveland, Ohio, at a meeting of the Commercial Chemical Development Association. Keynote speaker Patrick Conley, vice president of Boston Consulting Group, told attendees that the period during which society hardly ques­ tioned the achievements of science and technology is over. After World War II, the Department of Defense, the National Aeronautics and Space Ad­ ministration, and the Atomic Energy Commission became the predominant government funders of research and development. Now society is severely questioning the judgment of these agencies. The pendulum is swinging away from the "missile gap" and the "space race" toward such concerns as environmental quality, economic op­ portunity, and consumerism. The R&D man has fallen from grace. His activities and resources will be closely controlled, his independence strictly curtailed, Mr. Conley says. Marketand society-oriented research will be the order of the day. Heavy govern­ ment sponsorship of R&D will con­

tinue, but with new directions. And companies that ignore the shift will suffer, he adds. Companies already afoul of govern­ ment and public opinion—detergent makers, for example—should acquire the attitude that environmental con­ siderations create demand for new products, says Edward Lipinsky of Battelle Memorial Institute. He sug­ gests that detergent makers think in such starkly innovative terms as de­ velopment of a total-recovery dry cleaning system or even an ultrasonic cleaning system that would do away entirely with the present aqueous washing system, instead of just replac­ ing phosphates in detergents with something else that would go down the drain into the water supply. Along with Dr. Lipinsky, Patricia Noble and C. H. Kline of C. H. Kline & Co. espouse a total systems ap­ proach to marketing chemicals. Their prescription for profit is: Get into proprietary positions with innova­ tions, formulated specialties, end-use know-how, high service, and advertis­ ing and promotion. Get into con­ sumer products. Develop complete systems—chemicals plus equipment. Diversify. Is the age of the marketing man in the chemical industry—as definer of problems, projects, and products, and gadfly to R&D—finally arriving? Cer­ tainly, the lack of marketing savvy—or at least failure to use available talent profitably—does appear to be a major deficiency of the chemical industry.

Consumer products are generally more profitable... Rank

Product

Return on

net worth (1969) 1 2 3 4 5 10 12

Soft drinks Drugs and medicines Instruments, photo goods, etc. Soaps and cosmetics Office and computing equipment Autos and trucks Clothing and apparel

21.5% 19.9 18.8 18.4 17.5 13.8 13.4

. . . than their ingredients 21 25 26 27 36 38 39

Petroleum products and refining Rubber and allied products Chemical products Paper and allied products Textile products Iron and steel Sugar

Source:

C. H. Kline & Co.

12.1 11.1 11.1 11.1

8.8 7.6 7.2

One meeting attendee commented that it's ironic that some members at­ tending a recent chemical marketing association meeting in New York City are suffering the same unemployment woes as the present surfeit of Ph.D. chemists. Perhaps these two groups, he says, with their common plight, could now successfully merge their diverse talents in an already suggested Chemical Earnings Development As­ sociation (C&EN, April 6, page 18). In the past, the observer notes, com­ munication between marketing and R&D has all too often amounted to "You make a product and Γ11 sell the hell out of it."

MOON SAMPLES:

Very Old Rock A chemically unique moon rock, re­ turned to earth by the Apollo 12 astro­ nauts, may be nearly as old as the so­ lar system itself, according to scien­ tists at the Lunar Receiving Labora­ tory at the Manned Spacecraft Center (MSC) in Houston, Tex. Preliminary estimates place the age of the sample at 4.6 billion years—the oldest rock yet found on the moon. The discovery was disclosed concur­ rently at Houston and at the 13th an­ nual meeting of the Committee on Space Research (COSPAR) of the In­ ternational Council of Scientific Unions in Leningrad, U.S.S.R. Anthony J. Calio, director of science and applica­ tions at MSC, and Dr. Paul Gast, chief of lunar and earth sciences di­ vision at MSC, made known the dis­ covery in Houston. Dr. G. J. Wasser­ berg of Caltech, Pasadena, Calif., pre­ sented the findings at COSPAR. The 83-gram specimen (sample 12013) was found to contain 20 times as much uranium, thorium, and potas­ sium as any lunar rock analyzed to date. The sample has a texture read­ ily distinguishable from breccia and igneous rock, and color variations on the surface of the sample suggest that it is inhomogeneous. Other rocks from Apollo 11 and 12 appear to have crystallized from an igneous liquid between 3.3 and 3.7 billion years ago. Isotope studies indicate that lunar breccia may be as much as 4.4 billion years old. Sample 12013 appears to be essen­ tially the same age as most meteorites. The time of formation of stone me­ teorites is generally thought to be the time of formation of the solar system. Just where the rock came from is not known, but MSC scientists think it might have come from the highlands or from rock underlying the mare. Further studies on the sample by in­ vestigators in the U.S. and England are under way. J U N E 1, 1970 C & E N

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