Category Archives: Business

NIH Manditory Open Access

According to C&EN, the NIH has issued a rule that publications resulting from NIH funded research be submitted to PubMed Central for posting.  Naturally, organizations with copyright interest in published research is  less than enthused by this ruling.

What has happened over the last century is that a sizeable publishing industry has grown up around the publication of periodicals specializing in scientific research.  In exchange for release of copyrights, authors get free or nominally priced access to publishing and distribution of their work. For their part, publishers tap into a continuous stream of refreshed content that is virtually free of charge. 

Counterbalancing the low cost of content are the sad facts of subscriptions.  Many (most) journals suffer from low distribution numbers, so the zero cost of content helps to keep overhead down, but publishing and distribution costs cannot benefit from the economy of scale.

The special interests seem to be sitting in watchful waiting, but they have raised the issue of copyright. Their concern is that they are being forced to distribute their property by the strong arm of NIH without the chance for reimbursement.  This could resolve to a property rights battle and as such, I can’t imagine that the NIH would prevail in the courts.

Fork in the Road

Storms here in the Colorado Territory.  A spring upslope storm guides moisture up the rising terrain and drops frozen water on the high plains. Unlike the Eskimos, we have reduced it to a single word- snow.

I’ve spent much time lately with the attorney crafting business agreements. It is a delicate art. Sins of commission or omission can come back to clobber you.  Having been involved in a few of these things, I am beginning to see the patterns and whorls of terms and conditions, vision and revision, twisting and turning to morph, vanish, and crystallize over time. Hammering out a business agreement is a learning experience for all involved.

Over the course of negotiation, both parties learn about each other. They learn the strengths and weaknesses of the respective organizational structures and of the individuals involved.  Expectations that began as firm requirements slowly undergo plastic deformation into other shapes.

There are two main fears for most negotiators. Making a blunder of some sort and leaving money on the table.  Nobody wants to immortalize bad judgement or inattentiveness in an iron-clad document that will be in force for years. And notbody wants to aim too low in their expectations of performance or price.  Parties speak piously of win/win, but secretly they want WIN/win.

Buyers need a bargain trophy to parade before their bosses at the next performance review. Sellers want to appear shrewd in front of their bosses. Participants in a negotiation need many things and the appearance of sound, shrewd judgement is not the least of the needs.

Most large companies have whole departments that manage contracts and license agreements. They have specialists on staff to manage business agreements- maybe even a few lawyers. Chances are, if you are a chemist/engineer who has strayed from the lab and find yourself in business development or sales, you may be working on supply agreements, tech transfer agreements, tolling contracts, secrecy agreements, etc., already.

At some point in the career of a chemist/engineer, a choice will be given as to the kind of upward mobility opportunities one may take. Some, like myself, chose the path of business. A chemist may be assigned to a procurement job where chemistry skills are applied to buying chemicals for your organization.  Others may move into sales and represent a territory or become one of the Knights Templar of commerce- a business development manager.

Laboratory work is fun and gratifying. But so are many other activities. The operation of any scientific endeavor is complex. Universities and industry alike require that at least some of its soldiers move into administration so they can continue to operate.

Scattered Bits and Bobs

No rest for the wicked. I have been requested and required by the boss to attend the ACS meeting in NOLA.  Lots to get done before departure.  I’ll have to get my liver conditioned for a visit to the French Quarter.

I have been using the thermogravimetric analyzer (TGA) for fun and profit lately. It is quite useful in solving certain kinds of problems in process development.  Of course, if we attached a chain it might make a dandy boat anchor too.  Just kidding … mostly.

Lots of chemistry is presently under development in the USA. It is premature to concede the future of technology development to Asia just yet.  There are lots of companies struggling to get their new technologies to market- I see this every day. This is in stark contrast to news of the tragic comedy on Wall Street. It is important to remember that the stock market is only one of many indicators of economic vitality.  It seems to me that the current maelstrom is based on negligent banking practices, not industrial weakness.

Back to the hood. Gotta ice the trap on the vac line.

Disposable Reactors

Disposable reactors are here. According to ICIS, Marlborough, MA, based Xcellerex is offering disposable bioreactors for biologics manufacture.  These single-use reactors are available in the 40-2000 Liter working volume range.  The company offers several reasons for why their product might be desirable. They argue that more time will be available for productive reactor operation as opposed to having production down part of the time for reactor cleanout and validation.

The battle for high throughput moves to a new level. Xcellerex states that the installed capital cost is ca 1/2 that of hardpiped reactors. They make the case that delays due to cleaning are reduced and that plant time is used more efficiently.  

Monte Carlo Analysis

Th’ Gaussling is surfing the net looking at freeware. The possibilities are amazing. It’s like I’ve crawled up from underground onto a sunny Brazilian beach full of nubile sunbathers frolicking in the waves. It’s all just too wonderful to be true …

[sound of needle scratching across record]

So I’m new to Monte Carlo simulations. I have some economic modeling to do and it has become apparent to me that mere spreadsheet grinding isn’t enough.  To make a more convincing case I need to introduce plausible cost variances somehow by mixing and blending various kinds of guesswork distribution curves from the elements of the project. There is a particular Project Risk and Contingency Analysis software that seems reasonable to start with. It would be interesting to hear of experiences others may have had with Monte Carlo project modeling.

Ear to the Ground

My comments on recession come strictly from news and from petrochemical industry publications. I have not seen any indication that manufacturing of specialty chemicals (at least in the waters I swim in) are as yet affected by the economic turmoil that the lending fiasco triggered. Eventually orders will taper some, but the how much and when is not at all clear.

It takes a while for the effects of a downturn to filter upstream to all sectors of chemical manufacturing. The first effects will likely be a pushback on delivery of existing orders. Then, the period between succesive orders will lengthen as businesses closer to the consumers will start to trim down inventories and throughput.  Finally, sales forecasts will begin to report spotty sales projections 2 or 3 quarters out. Eventually, you run into those weak quarters and have to find a way to limp through them.

The important question relating to petrochemicals (aromatics, naphtha, ethylene, propylene, etc) is where does price elasticity really kick in for hydrocarbon intensive goods as crude prices continue to rise and the dollar continues to devalue? 

Packaging materials like PE, PS, and PP, etc. are very often not the primary product consumers are looking for. They are produced for sellers of consumer goods as packaging materials. The purchasing decision maker is not the person strolling down the isles of Wal-Mart, but rather the product manufacturers who have to package the goods. 

This economic disturbance seems unique. Demand from the global middle class is growing as the US economy falters.  Demand for hydrocarbon fuels and manufacturing feedstocks is strong from Asia for their own consumption. But Asian production is also strongly linked to the demand of their products from the west. Predicting how this thing plays out is very tricky. 

Polymer membranes, HDPE pipe, PVC pipe, automotive assemblies and fascia are all large consumers of hydrocarbon products. Demand for these materials, obviously, should parallel the health of construction and automotive industries. But as the US transitions to a net importer of polymers, the connection to US economics is murky.

I suppose the best business to be in is war profiteering and security, at least as long as a war president is in office. It seems to be shielded from the raw forces of economics. As long as the gov’t can print money, special interests can be paid.  A good career would be as a translator between Arabic and Mandarin.

Platinum Group Metals Update

14 March, 2008. As the deepening US gravity well continues to tug at the recession asteriod that is looming ever larger in the sky, we see a steady line of investors boarding Platinum Group Metal (PGM) investment vehicles for immediate launch off this doomed planet. 

Monday and friday opening EIB prices over the week of 3/10/08 thru 3/14/08.

Silver–  US$19.70/toz;  US$20.77/toz.

Gold–  US$971.55/toz;  US$1,0005.86/toz

Palladium–  US$470.00/toz;  US$516.00/toz

Platinum–  US$1,960.00/toz;  US$2,110.00/toz

The geology of PGM deposits is quite interesting. There are numerous resources detailing the Bushveld Igneous Province (or Complex) in South Africa. Check it out.

Green Innovation Lag

It is not unusual for a long time to elapse between an initial customer inquiry and when commercial quantities of product are loaded on the truck and driven out the gate. I have seen it happen over 1 to 10 years, with 3 years being quite common. The chemical industry is not like the semiconductor business. The paradigm shift period seems much longer. In fact, any given chemical processing technology can last for a large part of a career or more. The last big chemical paradigm shift I have noticed is high throughput experimentation (HTE).  Maybe others have a more recent example.

Green chemistry is considered by many to be a new frontier of opportunity. To its detriment, many of us are unsure of what green chemistry really is and how to implement it in manufacturing. Realistically, for green chemistry to find wide acceptance, it needs to turn a profit or offer some kind of concrete advantage. Pollution avoidance is too abstract. For any new method or technology, there must be a payoff.

It seems simple. Reduce VOC emissions by using aqueous solvent compositions. Increase atom efficiency in transformations. Minimize persistant pollutants, organic or metal. Increase space yields, reduce consumables.  Green chemistry is not so easily demonstrated to the public and it may not be in the public domain. Your green technology may be proprietary, so the ballyhoo factor will collapse to zero. The processor may have to labor down the green path in silence.   

A process changeover to a green process may require many people in several companies to align to the change like compass needles to the north pole. A chemical process change must offer some kind of improvement that, by consensus, is meritorious. There is a good chance that the change will require notification of the customer and possibly even their permission. Customers often want a price concession when there is a process change so they can capture some of the value, so this may mean reduced sales volume and profits for the processor.

The customer may require that the proposed process change will be cause for a new validation of their customers product, in which case, the final user will also have to perform a validation.   In all likelihood, you are proposing a green change to a process that previously offered no problem to the downstream users.

Obviously, the time for green process implementation is at the very beginning of process development. The development chemist must have an existing toolbag of techniques, transformations, and reagents to choose from to go forward with implementation. The best way to get to this point is with curriculum change at the university level. Chemists need to have green chemistry awareness from the beginning of their training. Converting souls when they are already within industry is the hard way to do it.

Microscale labs in the undergrad experience maybe green for the university, but it is hard to see how it translates to the implementation of green technology in industry. The green revolution must come from textbooks that use green transformations in chemistry and engineering coursework. It must come from professors who weave it into their lectures and provide examples of such transformations and practices in the lab experience.

Chemists and engineers from such backgrounds must move into industry and become group leaders and managers. Only at this point will green chemistry become “normal” and expected.

Shermer’s “Mind of the Market”

Google has been posting a series of interesting talks by contemporary authors. This talk is by Michael Shermer, author of Mind of the Market, and editor of the popular magazine Skeptic. It is a lengthy 53 minute video, but I would highly recommend it. I think Shermer has a good grasp on the anthropology of our present world.

This is off-topic, but useful. This link gives a bunch of really good hints on how to save money for your start-up company.

Incident Attenuation in Chemical Plant Design

If you work in a location that handles or processes hazardous materials, eventually you have to come to grips with the matter of risk and accidents. It is possible to design procedures that prevent certain kinds of accidents and casualties.  It is possible to install devices and automated contrivances that can eliminate specific failures and the resulting cascade of multistage calamities that might follow.

Over time and with plenty of thought, a chemical plant can be fool-proofed to a large extent. But in the end, residual margins of safety depend on the man-machine interface. People have to undergo recurrent training and certain staff must be assigned to specialize in safety.

All devices have a failure rate. The rate may be small or large. A device may fail safely or not. Most chemical plants are, to a large extent, hand built. They are fabricated by skilled tradesmen who connect pre-fabricated parts to one-of-a-kind assemblies built on-site. In this way, expertise is captured from the plant designers, contractors, and the manufacturers of the installed equipment.  In the end though, it is up to the designers to assure that there is compatibility and some margin of overdesign in the finished facility.

While it is possible to assemble a facility from the very best equipment, the fascinating question of design for the attenuation of accident propagation is not often discussed, at least openly.  Accidents can usually be reduced to a few characteristic phases. They are initiation, propagation, and termination. 

An incident begins with an initiating event. Some release of hazardous energy is presented to the surroundings that may begin a propagation of undesired events. Events can propagate in series or parallel chains.  Hazardous energy can be electrical, chemical, or mechanical. The initiation is the tipping of a domino as a triggering event that causes the release of other hazardous conditions to ensue. Eventually, the propagation of the hazardous energy release is suppressed, extinguished, or simply exhausted in the termination phase.

One of the best ways of learning about the phenomenon of accidents is reading about them. A website worth visiting is the US Chemical and Hazard Investigation Board. It is useful for chemists and engineers to study the anlyses of the CSB and gain useful insight into the dynamics of chemical plant accidents.

It is possible to configure a chemical plant in such a manner as to attenuate the propagation of hazardous energy during an incident. In general, a large distance between reservoirs of potential energy is the easiest solution. Explosives manufacturers have known this for a long time. One well known German manufacturer of energetic materials has a manufacturing site spread over a large rural area and has built in bunkers with berms and trees to attenuate the propagation of shockwaves and allow flying fragments to land safely in an uninhabited area.  Fortunately, not many manufacturers have processes and products requiring this kind of design consideration.

Situations of “ordinary” risk magnitude do require some thought, however. Consider the storage of drums of flammable materials. Most companies that handle palletized drums of flammable liquids meet the minimal fire and insurance codes for the handling of these materials.

But consider this. What if a forklift driver spears a drum of solvent with his lift, and then in a panic, backs up and pulls the fork out of the drum resulting in a spill? At this point, policy and regulations are irrelevant. The only question is this-  Where does the liquid and the potential fire go?

Indoor storage of flammable materials requires fire suppression. Fire suppression is not the same as fire extinguishment. It is about knocking down the fire to a manageable level for emergency egress, to suppress the spread of the fire, and for firefighters to make some kind of attempt to extinguish the blaze. This is routine firefighter stuff.

What is less than routine, however, is the issue of BLEVE’s. I have written on this phenomenon previously.  Fire suppression is one thing, but BLEVE’s – Boiling Liquid Expanding Vapor Explosions- are quite another matter to deal with.

This is where a well designed facility with passive architectural features to attenuate the spread of hazardous energy can be helpful. An indoor BLEVE is virtually assured to accelerate the pace of a disaster.  So, in the planning phase of a plant, it is important to consider how energy release during an accident may propagate.  Drummed flammable liquids should be isolated from work areas and egress paths. This is pretty obvious to initial designers, but not necessarily years down the road during an expansion.

Consideration should be given to the anticipated direction in which energy is released. Where possible, energy should be released away from populated areas and away from major capital equipment. A fire in a materials storage area shouldn’t lead to an extended plant shutdown due to damaged process equipment. Segregation is key to plant safety and business viability.

Smoke is a potential killer and there are architectural tricks that can add provide slightly greater safety margins. Ceilings designed to collect and channel smoke out of the space could reduce the likelihood of suffocation of stranded workers and suppress the chances of a flashover. Smoke curtains properly placed can channel smoke away from hallways and the resulting spread.

Another concern is the fate of spilled flammable liquids in a storage area. Where should the spill go? Should the spill be concentrated in a small space or channeled to another space where a fire can burn with lower negative consequence? Nobody likes to pay for an overengineered warehouse, but fire resistant partitions in a solvent storage area can go a long way toward the isolation of a fire and attenuation of a larger scale calamity.

One major plant accident I am familiar with has a number of attributes that other operators would do well to consider.  A 750 gallon reactor explosion resulted in the complete fragmentation of the vessel.  A few pieces ejected from the hole in the roof were found lodged in the walls of neighboring structures off-site.  Fortunately, this reactor was in an enclosed space with no other reactors or stored hazardous materials. In one way, this accident was isolated due to passive attributes. However, the building space was interconnected to other spaces by a series of adjacent rooms and hallways. While fragmentation and fire damage were contained due to the happy fortune of isolation, the shockwave was able to follow all of the connected and enclosed pathways.  The connected pathways were a convenience to the workers, but this feature channeled a pressure wave throughout the entire facility, lifting the roof enough to damage large -remote- sections of it as well as badly damaging overhead doors and windows throughout the facility.

Take home lessons? 1) Leave open space walkways between production and storage buildings and the rest of the facility. Collateral damage is likely to be suppressed with this cheap, passive feature. 2) isolate and dedicate certain vessels to hazardous operations. 3) Store hazardous materials well away from processing areas. Storage and processing have their own hazards and a disaster in one area should not be allowed to propagate to the other.

The matter of flammable solvent storage and accident attenuation is only partially solved with enclosed flammable materials lockers. It seems to me that some research should be done to advance the level of best practices in this area.