End of an era: Dow spins off chlor-alkali

imgresDow Chemical has agreed to sell its Chlor-alkali assets and associated derivatives businesses to Olin Corporation in a transaction that in one stroke separates Dow from its main heritage business and makes Olin the largest domestic chlor-alkali producer. Dow will end up owning about half of Olin’s stock (to be eventually spun off to Dow’s shareholders) and has a 20-year contract to supply ethylene to Olin’s vinyl chloride and other chlorine derivatives businesses it will now own. Readers will recall that Dow was never a PVC (polyvinyl chloride) producer (except in a very minor way), and sold its styrene/polystyrene and polypropylene businesses a number of years ago. It remains a large polyethylene producer, where its proprietary technology and low cost ethylene production has given it some competitive advantage in this otherwise relatively commoditized business. Dow is getting closer to its announced goal to be largely a producer of specialty chemicals and differentiated consumer-oriented products.

It is hard to avoid comparing this and other Dow transactions to what happened with England’s premier chemical firm ICI over the last decades of the Twentieth Century: Yes, “breaking up is hard to do” when companies want to transform themselves from being largely a commodity producer to a producer of specialties. ICI failed spectacularly in this respect, following a different playbook than Dow. It decided to (a) divest its chlor-alkali and polyethylene businesses and (b) to split off as a stand-alone company its highly specialized and profitable pharma, ag chemicals and other businesses in a so-called demerger. As a much leaner firm, it then acquired a number of relatively specialized businesses from Unilever, making ICI, at one time one of the largest and most successful global chemical firms, a much smaller company with several partly differentiated businesses. Unable to establish itself as a important player with a bright future, ICI eventually was acquired by Dutch producer AKZO, which coveted ICI’s valuable coatings and adhesives businesses, bringing to the end a failed strategy of transformation for a storied company.

Dow followed a somewhat similar, but strategically superior path. Its transformation got off to a bad start when it acquired Union Carbide, which greatly increased Dow’s exposure to the wild ups and downs of the petrochemical industry. Then, seeing the light, it embarked on its own quest to become a much more differentiated chemicals producer. Already engaged in supporting strongly its differentiated plastics and performance chemicals businesses, it acquired Rohm and Haas, one of the world’s leading specialty chemical companies(electronic chemicals, coatings) in the process taking on so much debt that its future financial condition for a time became uncertain and its management under stress. (Dow had expected the Kuwaitis to buy part of Dow’s commodity assets but the Kuwaitis reneged on the deal, leaving Dow very short of cash to pay for Rohm and Haas). But Dow had continued and still continues to spend a lot of money on research to create and/or acquire additional differentiated businesses(e.g. batteries, solar roof panels, water treatment). It had also kept some of the excellent specialty businesses (e.g. ag chemicals) that ICI spun off in its demerger. Dow has also greatly benefited from the “shale revolution” giving it a very low cost ethylene business, as mentioned earlier. It is now financially sound and is highly diversified, smaller than before, and completely different from what it looked like in the past – no longer recognizable by the ghost of Herbert Dow, its iconic creator who started to produce bromine derivatives in Michigan in the late Nineteenth Century and who died in 1930. It is now probably time to move Dow’s headquarters from Midland to a more cosmopolitan venue, a move that was always resisted by Dow’s traditional management.

While a few U.S. chemical companies (Westlake Chemicals comes to mind) are still in commodity petrochemicals, most of the other large firms (think Eastman Chemicals, Ashland, Huntsman) have largely transformed themselves into producers of differentiated chemicals. Dow, always considered a leader, has now come around to recognize that commodities cannot be an important part of its future even though the shale revolution briefly gave the U.S. petrochemicals industry a typical exciting interval.

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California water crisis deepens: Graphene membranes could provide a breakthrough

imgresThis blog has recently featured articles on the growing worldwide water crisis and on the potential of a new material called graphene which has exhibited amazing characteristics (strength, chemical resistance, flexibility) that could lead to breakthroughs in a number of areas. It is therefore big news that researchers at the Department of Energy’s Oak Ridge National Laboratory have found that this material, when acting as a membrane in reverse osmosis desalination, can substantially reduce the energy required to make fresh water out of salt water. This is because a thinner and more porous membrane greatly reduces the pressure required to push the (fresh)water through. If the use of graphene in this application can be commercially proved out, desalination would become a much more attractive technology for providing fresh water to regions that desperately need it, not least California.

Getting a little technical, the one atom thick membrane was constructed by flowing methane through a tube furnace at 1000 degrees C over a copper foil that catalyzed its decomposition into carbon and hydrogen. The chemical vapor deposited carbon atoms that self-assembled into adjoining hexagons to form a sheet with a thickness of one atom(!). This sheet was supported on a silicon nitride chip. Oxygen plasma was used to knock carbon atoms out of the nanoscale chicken wire lattice to create pores.

The membrane allowed rapid transport of water and rejected nearly 100 percent of the salt ions. The Center for Nanophase Material Sciences, another DOE unit, assisted with this research. It was published in the March 23 online issue issue of Nature Nanotechnology. (People who know me would attest that I am probably not an avid reader of this journal).

Commercial application must prove  out structural stability and resistance to biofouling. which may prove to be a high bar.

 

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Humanity’s Critical Resources: Planning for Interactions

EnWaFoScientific American magazine’s February 2015 issue contained a very interesting article explaining the interaction of what may be the three most important problems confronting planners for the future of humanity. In particular, it stressed the urgent need for planners normally considering only one of the three issues to fully understand the relationship between the three as capital spending decisions are made. And to add to the puzzle, decisions involving the reduction of carbon emissions should also be informed by the continuum of energy-water-food system interactions. Unfortunately, decisions in the three areas are usually made by completely separate governmental or private entities, which makes intelligent decision-making (taking the interactions into account) extremely difficult. To add to the problem, many of the world’s population centers are hit with or facing drought, energy production is encountering increasing environmental restraints and the world’s food supply is straining to keep up with demand, with decreasing amounts of arable land available.

To frame the problem, consider California now suffering the worst drought in its history while still producing much of this country’s fruits and vegetables. The need for more water, the largest percentage of which is for farm use, is becoming almost desperate.  California shut down two nuclear reactors in part for lack of cooling water. Still, environmentalists opposed the construction of a salt water desalination plant near San Diego (see my January 31st post) because the process is so energy intensive. And who will decide whether it makes sense for California to produce oil or gas via fracking (a water-intensive process unless exceptionally well managed) when other parts of the country (e.g. Pennsylvania, parts of Texas) have plenty of water.

Uruguay provides another good example of these interactions. The Uruguay River, which has a dam capable of generating as much electricity as the Hoover Dam was at very low levels in 2008.  Eventually eleven of the fourteen turbines were shut down because of the need to store large quantities of water above the dam, as needed for farm irrigation and consumer use. Effectively, the citizens had to choose between food, water and electricity! Lake Mead may soon face a similar problem.

The article identifies some interesting choices, based on recent studies. As an example, intermittent wind power is more economically valuable when it is used to produce relatively clean water via (low energy-intensive) desalination of brackish water rather than producing electricity. This water can then be used to irrigate crops.

To look at another interaction, nuclear power plants and carbon capture installations at coal-based power plants are prime choices to avoid carbon dioxide emissions. However, both are very high water users. How to balanced the carbon problem against the growing shortage of water? These are the kind of tradeoffs that planners should take into account when new plants are being considered and where regional choices exist.

The article recommends funding research on energy technologies that are “water-lean”; water technologies that are “energy-lean”;  and food production and storage that reduce energy and water use. Even without research, we already know how to make electricity distribution more efficient(e.g. smart grids) and how to reduce water use by eliminating leaks with wire sensors – allegedly 10-40 percent of flowing water is lost through leaks. Israel is a leader in this area – not surprising in a country short of water.

 

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All solar; all the time

imagesCan a sentence including the words “solar” and “Tesla” make sense. Cars can not run on solar roof panels, but such a sentence would make sense if it also includes Elon Musk who is the CEO of both his eponymous car company and of Solar City which is responsible for a quarter of America’s residential solar panel installations and which just announced the acquisition of high efficiency cell manufacturer Silevo for             $ 200MM. Musk believes that prices of solar panels are coming down fast enough to disrupt the entire electric utility industry. His vision is backed up by his proposal to build an enormous battery plant in Nevada which is integral to providing solar energy around the clock. So, when solar energy provides enough power to become a major factor for electric utilities, Tesla cars would run on solar energy!

Is solar a realistic large scale source of electric energy? A Tunisian company, Nur Energy, together with British investors, is developing a 2000MW export project that will generate solar power on the North African coast, which will be delivered by high voltage direct curren underwater cable across the Mediterranean to Italy and from there via underground cable inland and to other countries. Its capacity is large enough to serve 2.5 million households.

In another development, Abengoa Solar, a Spanish firm which uses solar panels to heat circulating oil or molten salt to generate high pressure steam at supercritical pressure, claims that its technology is already competitive with natural gas-based power plants. The company completed a 280 mw plant in Arizona and is building other plants in the Middle East and elsewhere. (A somewhat similar plant, Ivanpah, in California, has had problems with bird kills as they fly into hot mirrors.)

Back to Elon Musk, there has been speculation that Musk will sell Tesla to Apple, which has already announced serious intention to get into the automobile business, as electronics for cars are now a top research goal in Silicon Valley. Musk, as owner of both solar energy and battery companies, is also deeply involved in developing space travel rocketships for private parties. ( A successful test launch was just announced today) A sale to or joint venture with Apple would seem to make a lot of sense for this century’s leading inventor and entrepreneur who, like the rest of us, has only 24 hours each day to move his many visions forward. Musk has been in discussions with Apple and has hired a number of Apple employees, but the companies may be far from entering any kind of agreement.

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Nanocrystals for tagging: A possible breakthrough

imagesResearch carried out at MIT and funded by the National Science Foundation, the Army Research Office and National Institute of Health has led to the successful development  of tiny, smartphone-readable particles that, inventors say, could be used to authenticate currency (see also my Jan 13th, 2013 post), electronic parts and luxury goods, among other products. These invisible particles contain colored stripes of nanocrystals that glow brightly when exposed to near infrared light. The new particles are about 200 microns long and include several stripes of different colored nanocrystals doped with rare earth elements such as ytterbium, gadolinium and others.  These microparticles can be dispersed within the manufacturing or packaging process, incorporated into 3-D-printed objects or printed into currency notes, the inventors have stated. They can withstand extreme temperatures, sun exposure and heavy wear. To authenticate bank notes to fight fraud, the particles would be incorporated in the printing ink.  They could also be mixed into the paint used by artists, again allowing for authentication. ( P.S. note: Auction houses like Sotheby’s and Christie should be interested in this work)

The similarity of this approach to current bar coding techniques is striking. Using the above procedure, a very large variety of unique tags can be created. With six stripes,              1 million different color combinations can be created. If more than one particle is used, there would allegedly be enough combinations to coat every grain of sand on earth(!).

“What separates our system from other anti-counterfitting technologies is this ability to rapidly and inexpensively tailor material properties to meet the needs of very different and challenging requirements, without impacting smart-phone readout or requiring  complete redesign of the system.”

The invention is further described in the April 2014 issue of Nature Materials magazine and in the Fall 2014 issue of XCurrents, a publication of MIT’s Chemical Engineering Practice School.

We have entered a new era where coding methods are really changing our life. It is now possible to shop at stores and supermarkets like Stop-and-Shop and use a smartphone to price items as we look at them and keep a running tally of the total price of all items in our shopping cart before reaching the checkout counter. Chemistry and electronics keep making an ever larger impact.

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Finally: Waking up to the folly of biofuels

imgresThe corn-based ethanol producers in Iowa and elsewhere must be throwing money at their congressmen as their industry is starting to look more and more threatened, both short term (high corn and low crude prices) and long term(Do we need corn-based gasoline when we are awash in domestic crude oil?). And we haven’t heard much about biodiesel recently, though this is more of a European issue, where diesel is a much more important car and truck fuel.

A recent story in the January 29th issue of New York Times is very timely. It points out that in almost every way, it is very clear that growing a crop on purpose for making a biofuel does not make sense versus other alternatives to generate useful energy while keeping a low carbon profile. As far as ethanol is concerned, it has always been obvious that growing corn for the purpose of making gasoline is very poor practice, given the effect on corn price, the world’s growing need for food (70 percent more required globally in 2050) and the world’s decreasing amount of arable land. It is true that oxygenates (including alcohols, including ethanol) are in fact, needed in relatively limited quantities to blend with gasoline for producing a clean combustion mixture for cars, but technology for making ethanol from crop wastes (e.g.cornstalks), switchgrass, etc has been commercialized in Europe and is now in operation at an Ineos plant in Vero Beach, Florida that uses wood waste and non-food plant wastes and makes 8 million gallons a year of ethanol while sending 6 megawatts of power to the local community.. A 25 million gallons per day cellulosic ethanol plant using crop wastes built jointly by Poet and DSM is about to start up in Des Moines, Iowa. Others are planned, though the amount of potential feedstock is limited and logistically difficult to assemble and transport to processing units versus corn, which is already collected in large silos, giving a ready-made infrastructure. In any case, cellulosic (nor corn-based) ethanol technology should be the only process receiving government subsidies under the Renewable Fuels Standard. Renewable energy costs from solar are now quite low: the article points out that solar panels are 50 times more efficient at capturing the energy of sunlight than growing corn on purpose for making biofuel(!).

Another use of biomass is also coming under criticism. An increasing amount of wood, converted into pellets, is being substituted in Europe and the U.S. for coal as part of a strategy to replace fossil fuels. Newer thinking is that it would be better to let the trees stand to capture more carbon and again rely instead on solar and wind energy to replace conventional fuels.

Fundamentally, we are talking about sunlight or wind power converted into energy. If the world were facing a dramatic decline in crude oil and natural gas production and alternative technology were not economical or practical, biofuels might be an answer (except for coal and nuclear). But is is now obvious that “peak oil” will not be reached any time soon. So we don’t need to make biofuels from perfectly good edible corn. Some of the corn-based ethanol plants could be converted to non-corn based cellulosics.  So, let’s ease off on “gasohol” and do the right thing carbon-wise!  Congress and the Administration, are you listening?

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Desalination becoming important contributor in drought-stricken California

DroughtDesalination is a technology that has been around for a long time (a classmate of mine at MIT became one of the founders of Ionics Corporation shortly after he graduated) but it has had little impact on life in the United States. There have been a couple of fairly large plants – one notably in Santa Barbara, California – but the capital and operating expense associated with desalination plants and the general availability of drinking water in this country has kept this country from installing such plants.

A different situation has led to the construction of a large number of desalination units in the Middle East, Israel and in other regions where water supply is limited.

Now comes news of a mammoth desalination plant under construction in Carlsbad, San Diego County using an Israeli firm’s technology. The decision to build this plant should come as no surprise, given the terrible drought now plaguing California(see graphic). The plant will desalinate 100 million gallons of Pacific water daily, providing 10 percent of the county’s water supply.  It will use reverse osmosis technology. which uses considerably less energy than distillation or vapor compression, though it is still a very large energy user. It will consume 35 megawatts of electricity, enough to power 30,000 homes This accounts for the fact that the plant’s product will sell for around $2000 per acre-foot, which is 80 percent more than what Carlsbad on the average pays for water from current sources.  The plant will add $5 to $7  to the average residential monthly water bill.

With California suffering $ 1.5 billion in agricultural losses in 2014, there is no question that much more desalination will be installed, regardless of its high cost. Since treating brackish or waste water with reverse osmosis costs much less, increasing amounts of currently untreated water will also be recovered in this manner.

Reverse osmosis involves using high pressure to pump a solution of brine against a semipermeable membrane that allows the water to pass through while retaining salt and other inorganic impurities behind. The Carlsbad plant will be built with 2000 fiberglass tubes that hold the membranes. A typical membrane consists of cross-linked aromatic polyamide on a polysulfone support layer. Cellulosic polymers are also used. These membrane are fairly thick, accounting for the high pressures needed to push the water through.

With desalination becoming increasingly important (16,000 plants- many small- built world wide) research to lower the cost is being stepped up. Some nanoengineering approaches in membrane design have shown promise. Graphene membranes could cut energy use substantially, but this is looking far into the future.

 

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