Category Archives: Business

Sigh

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What a horrible week.  >>>>>>***Sarcastic comment stricken from the record***<<<<<  Things have gotten too Machiavellian.

Let’s talk about sunshine and daisies instead:  Some things about Th’ Gaussling that may not be widely known- I wear a Mickey Mouse watch, even on business trips, and I am a daily user of a pocket protector. My current pocket protector is emblazoned with the logo “Buca di Beppo”.  I’m considering having some Lamentations on Chemistry pocket protectors printed up for distribution from this site.

Email Etiquette- Going Nuclear

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A pet peeve I have with my some fellow adult co-workers is their bad habit of excessive cc’ing people on emails. The most pernicious version of this is an email where a list of grievances is sent around with the conspicuous presence of some upper level manager carbon copied, or worse, blind copied.

This habit is a transparent kind of tattle-tale leverage used in the art of persuasion. Once someone has “publically” complained to upper level folks, everyone else has no choice but to opt for CYA.  It is like a nulcear weapon- once released, it knocks everyone down. I refer to these situations as “going nuclear”.

People feel that they have to respond in kind.  One email escalates to many. Soon, there is a flurry of emails clogging the inboxes of those trapped in this fetid tidal pool. Eventually, the tempest dies down leaving the boss wondering about the judgement and temperament of the staff. 

The worst kind of cc is the bc, or blind copy. This method is favored by practitioners of the dark arts. It is a truly reprehensible practice and people who do it should be hunted down like the rabid  curs they are and tarred and feathered. Neutered, maybe.

Ab Initio Chemical Plant Design

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So, dear reader. If you were going to design a general/multi-purpose chemical plant capable of doing a wide variety of chemical transformations, what kind of features would you install now that you’ve had some experience in the field? No high pressure vessels, just ambient to 80 or 100 psi. I’m talking about a plant with 50 to 2000 gallon reactors- say, 8 of them. What kind of configurations would be desirable starting from the ground up?

No GMP capacity- too bloody expensive. We don’t want to do API’s.  No gas phase chemistry. No scary oxidation chemistry or energetic materials.  Just the kind of garden variety specialty organic or inorganic compounds and transformations that you might find in the Aldrich catalog.  Synthons, reagents, etc.

One interesting thing to ponder are possibilities with the use of passive architectural features to attenuate the propagation of upset or emergency conditions. 

PGM Prices Remain Strong

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The Platinum Group Metals (PGM’s) continue to trend upwards.  Last friday 0n the EIB rhodium opened at US$9,050.00/toz. Rh remains in strong technical demand and prices are propped by a great many overlapping factors. Uncertainties in the mining business in South Africa buoy uncertainty among investors. Recent electrical distribution shortfalls and blackouts have interrupted production as have mine floods, labor disputes, and a shortage of experienced miners and managers.

Automotive pollution catalytic converters dominate the demand for platinum and rhodium. As demand for Pt and Rh continues to grow, look for companies to switch to palladium in key applications.  Russia holds a strong position in Pd inventories. As demand for Pd rises, look for Russia to exercise its muscle.

As Au and Pt prices continue to climb, look for jewelry demand for these metals to taper off.  Asian demand for these metals is substantial. Eventually, jewelry prices will temper demand for gold and platinum.  Meanwhile, interest grows in North American PGM resources.

Password Blues

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Our IT guy has been hounding us to make better choices for login passwords into the company information system. More characters, digits, and the use of mixed case is recommended. Like many people, I have accounts in diverse systems that are not connected. Not every system gives me a choice of login names and passwords.  Eventually one ends up with a variety of codewords that one has to keep straight. Soon it becomes a little burdensome.

There is a website that purports to provide random character strings. It is Random.org.  The operator of the site is a lecturer in computer science at Trinity College and uses atmospheric noise from a group of radios to capture random events that are somehow translated into character strings.

If you need strings of random digits, there is von Neumann’s middle square method. It can be done on a calculator. While it is hard to guarantee that there isn’t some kind of periodicity, von Neumann felt this method suited his needs.

I wonder to what extent the shaky state of internet security depends on the structure and prevalence of Microsoft code?  I have no idea.

Literature Swim. The Guo-Liu Catalyst.

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Guo & Liu Catalyst

The literature train station is overflowing with diverse catalysts for the large variety of coupling reactions out there, as is the patent literature. Parties scramble to get window seats on the IP Express, the high speed non-stop to that Golden City on the Hill. 

A recent JOC article disclosing an inexpensive catalyst system that struck me as interesting.  The article by Guo and Liu emphasizes economy and so discloses a phosphorus-free bidentate ligand system that affords Heck and Suzuki-type coupled products.  There are pluses and minuses to this system, as is the case for most catalysts.

On the plus side with the Heck and Suzuki reactions, both activated and deactivated aryls gave decent yields. On the minus side, the Heck coupling reaction is a bit slow. A fair amount of energy input was needed- 130 C in DMF over 30 hours. On the Suzuki side, most reported reactions resulted in good yields, except for the aryl chlorides. The relative inertness of chlorides is not particularly unusual, but it may cause this catalyst to be passed over in some applications where the less atom-efficient bromides and iodides have been targeted for replacement.

Finally, the apparent requirement of DMF is rarely happy news. Regardless, I have no doubt that this catalyst will find its way into the future literature and many clever applications will be revealed.  As of this writing, I was unable to find a US patent by inventors Guo and Liu claiming this technology. Since there is a 1 year limit on the filing of a patent application following disclosure, this technology could be in patent prosecution at present. Or not. Wouldn’t it be a happy thing for it to be in the public domain?

Economic Katrina

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I’m reluctant to sound alarmed, but with the apparent shape of an impending economic Katrina moving over North America, it is getting harder to grant the benefit of the doubt. The dollar is sinking, exposing this import-heavy nation of ours to price increases in nearly every sector. The petroleum resources that energize global production and grease all economic skids is generating considerable doubt and turmoil in financial circles.

Oil production is flat in many key regions but the demand for consumer goods by the global middle class is expanding.  Our television-enchanted population, brains scrambled to numbness by chronic exposure to American Idol, are seeing only what the media powerbrokers want us to see. The eternal message that comes from TV is spend, spend, spend. 

The popular economic indicator is the stock market. The DJIA up- good. The DJIA down- bad. It is a sort of pallative. We’re lulled into a false comfort zone by the meta-stability of todays stockmarket.  Other dots are beginning to line up into a harmonic convergence, however.

Yesterday, as a humorous conversation starter, I asked a senior colleague well placed in the petroleum industry this question- “when will crude oil hit $150/bbl?”.  His reply surprised me. He estimated that it would happen this summer. Later, tempering his answer somewhat, he suggested that it would be more like $130/bbl, and mostly on the strength of nervousness in the market. He added that at present, crude oil stocks in the USA were in ample supply. 

The extended weakness in the dollar seems to favor American exporters and disfavors import consumers. Hmmm.  Does gov’t inaction on the weakness of the dollar amount to bias for corporate constituents and neglect of unincorporated citizens? Curious.

Advice- payoff as much debt as possible. Insulate your house. Get rid of that gas guzzler. Accumulate greater savings. A lot of the soon-to-be-unemployed are going to face higher higher gasoline prices for their commute to the new job at the auto salvage yard. And when they get back to their trailer at night, the thermostat will be set low due to higher heating costs. Beans and weenies, Mac-n-Cheese. Bon apetite!

Polyolefin Migration

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The worlds burgeoning middle class has a voracious appetite for polymers and this has compelled other regions of the world to execute a refining and manufacturing buildup that will cause an upcoming oversupply situation. In particular, Middle Eastern and Asian PE and PP capacity will take a sharp upturn, shifting supply patterns and causing margins to fall. Demand for North American (NAm) polyolefin (PO) products will enter what is projected to be a permanent decline as capacity and market share shifts to other longitudes.

Fortunately for US interests, many PO producers have anticipated this and have diversified through significant structural changes increasing access to the far regions of the world. This fact alone should buffer the upcoming downturn in the industry. Projections I have seen suggest that the NAm PO market should be back up to present levels by 2012 as the new capacity operates as price taker rather than a price maker. Eventually for NAm and the EU, finished goods imports will overtake market growth and a period of decline will ensue.

The new world I am describing is projected to happen in 2009. We are about to feel the gravitational pull of the “New Gulf”. The Old Gulf- Gulf of Mexico- will take a back seat to the Gulf in the Middle East.

One weakness of the New Gulf seems to be ethylene. US capacity for the extraction of ethane from natural gas and its conversion to ethylene is an advantage that will buoy NAm PE business for a while. But once Middle East and Asian operators learn to run their plants efficiently, NAm facilities will face the somber truth of the marketplace. NAm will become a net importer of PO’s. 

Asian demand for PO’s is growing so rapidly that it may never become a net exporter of PP and PE.

One factor that I do not understand yet is the effect on petroleum supplies and the cost pressures therein. Increased capacity giving lower prices could increase petroleum and gas scarcity resulting in increased prices of petro-energy.

IBM, Thy Patent Portfolio Runneth Over

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IBM people are prodigous inventors. In 2007 alone, IBM was allowed 3,125 US patents. In the period from 1993 through 2007, IBM has acquired 38,707 US patents.  I can visualize the torrents of office actions flooding out of some pipe from the USPTO into the mailroom at IBM Galactic Headquarters.

Imagine trying to enforce this collection of patents. Crimony! With this many patents- and who knows how few are abandoned- IBM must be involved in litigation almost continuously. Imagine the legions of confident, white-shirted IBM attorneys marching in lockstep, “Think!” banners streaming in the breeze!  It would be fascinating to see how they make these patents actually result in cash flow. Who knows, IBM may have the biggest patent picket fence in the universe?!

Changing Petrochemical Center of Mass

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The Middle East (ME) is currently undergoing a dramatic change in petrochemical supply and refining capacity. Multiple projects in several countries are underway that will offer greater capacity of key hydrocarbon feedstocks as well as fuels. 

The current run up in crude oil prices has produced an abundance of cash for oil producing states in the ME.  Acutely aware of the transient nature of their oil reserves, the cash generated has been applied to infrastructure. Social infrastructure as well as industrial infrastructure has been expanded in the ME with facility no doubt eased by the nationalized nature of the petroleum companies. 

In the USA, a run up in crude oil prices has not resulted in a major uptick in refinery capacity, port expansion, or the birth of new universities. Instead, US oil companies have plowed investment into new discovery activity in an attempt to sustain the current rates of consumption. Profits are channeled into CEO salary packages and to shareholders, who, in turn, go to great lengths to shelter their funds from taxes that support US infrastructure.

Saudi crackers alone are expected to add 14m tonnes/year of extra ethylene capacity by 2015. ME market share of PE and PP is expected to double by 2011. So large will the demand for ethane be that there is considerable skepticism that the full potential of the buildup will be realized.

Since ethylene comes from the cracking of ethane, and presently a large share of ethane comes from natural gas, the question arises as to the effect on natural gas prices as ethane scarcity becomes apparent.  Naphtha crackers are part of the answer to the question of supply. The US has (had) abundant natural gas and a corresponding reliance on the extraction and cracking of ethane from this resource. Elsewhere in the world, a large fraction of ethylene comes from naphtha feedstocks.

And so it is that the Saudis are building crackers to bolster their feedstock supplies. The Dow/Siam Cement JV is also addressing their ethylene supply issue with a second naphtha cracker in Map Ta Phut (ICIS, 2007, December 3-16, p 6).

The largest petrochemical complex in the world is under construction at Ras Tanura in the eastern province of Saudi Arabia.  This US$20 Bn project is being developed jointly by Dow and Saudi Aramco and is expected to come onstream in 2012. The goal is to integrate the existing Ras Tanura and Yanbu refineries into a single operation offering petroleum refining and production of value added hydrocarbons like ethylene.  Clearly, the principals have downstream conversion in mind. The project will have the first naphtha cracker in the ME and will offer ethylene cracking and aromatics capacity as well.

According to the article in ICIS, Basell claims that the ME will be the only net PE and PP exporting region by 2011.  And so it was that the petroleum scare in the first decade of the 2000’s financed and expedited the migration of dominance in the polyolefin industry to the Middle East.