Part 3 of Greenpeace summary of CHEMICAL WEEK chlorine conference

[IATP@iatp.org (IATP)]

WATER TREATMENT

LAWRENCE R. GESS, Marketing Manager, Nalco Chemical and MARVIN R.
RUSSELL, Jr., Plant Manager of Swerage and Water Board of New
Orleans.

Gess guesses that substitutes for chlorine in water treatment
will be difficult and costly to develop; if regulations drive
change, the costs will be passed onto their customers.

Russell, giving the operational perspective, says the New Orleans
Water Board commissioned a study by the Malcolm Pirenny Group to
look at treatment alternatives.  They looked at ozonation but
nevertheless recommended pretreatment with chlorine.

The Safe Drinking Water Act have raised concerns over
Trihalomethanes and chloramines; the Surface Water Treatment Rule
also affected them, requiring that operators be nationally
certified, that plants do continuous (every 4 hours)
monitoring for chlorine concentrations.

Other rules (DOT/OSHA/EPA) have made water treatment with
chlorine more costly because of many additional safety
requirements, some of which he described as burdensome or
unnecessary, including the addition of sniffing sensors
near enclosed storage areas (required when storage is near a
school, etc.), additional DOT requirements for lights and cameras
near 90-ton chlorine tank cars, and new hazmat training
requirements.

American Water Works Association recently (some time in March)
published a study on alternatives.

He says cryptosporidium and giardia are resistant to chlorine,
Chloramines don't kill enteric viruses. Zebra mussels, now
showing up in their system, tempting them to use more chlorine.

PULP AND PAPER

THOMAS WEISEMAN, Manager, Pulp Manufacturing Services,
International Paper.

I didn't get to this workshop, but it was basically a pitch for
ECF (chlorine-dioxide based process).

PVC  WORKSHOP

FRED KRAUSE, of Geon and FRANK BORRELLI, with the Vinyl Institute
and formerly Georgia Gulf.

"Greenpeace would like to ban PVC.  They say they want a phase-
out,  but a mandatory phase out is in fact a ban."

"PVC is all around you every day."  Yes, indeed.

He used Franklin Associates' data for comparing PVC's energy
efficiency with alternative materials, and the Chem Systems
report.

For PVC pipe his main arguments were:
* transportation costs are lower
* water supply security is greater: less water leakage loss
(cited the Scarborough, Toronto figures on water main breaks --
none in PVC lines because it "flexes while others break.")
*  Ductile iron uses more energy, pollutes more at mining,
material refinement (smelting, coke ovens).

FRANK BORRELLI

Announced that next month CMA will publicly recognize 24 plants
with perfect compliance records.

Concerns over recycling have been dealt with by the industry by
its development of sortation technology.  "6 million pounds of
packaging were recycled in 1994."  More recycling of business
machines, wiring.  They are still working to make recycling
economically viable, though it's not very viable in most
instances today.

They expect publication of the ASME incinerator study (showing no
correlation between PVC in and dioxins out) by late summer.

Vinyl Institute is committed to characterizing dioxins from the
production process (a recognition that they are weak there, and
might as well try to control the debate).  They expect to
characterize dioxins from effluents, vent gases and solid wastes
in 1995, and minor streams in 1996.

Mark Hammond, a British consultant with Harriman Chemsult (who
publish "Plastics in the Environment Newsletter") suggested that
bans in Europe are becoming less popular.  Cited Belgian ministry
of the environment's position that there's no reason to
discriminate against PVC.

They are confident that the public doesn't distinguish PVC from
other plastics, and that there's no understanding of the links
between PVC, chlorine and dioxin.

CHLORINE AND PRODUCT STEWARDSHIP

TOM PARROTT, Vulcan Chemicals

This presentation was straightforward and fairly unrevealing.
Product stewardship is result of disasters of the past.  Lessons
from "Manville" (asbestos): "Our society has moved from a rule of
'let the buyer beware' to 'let the producer be responsible'."

Think about Vulcan products like PVC and Perc. when you read the
following definition of Product Stewardship: "The responsible and
ethical MANAGEMENT of the health, safety and environmental
aspects of a product THROUGH its entire LIFE CYCLE." (emphasis in
original)

(Will Vulcan pay for all those Superfund sites created by dry
cleaners?  Does Vulcan pay for cleaning up the dioxins created by
PVC fires or insure its products for the damage to firefighters
from HCl emissions?)

"The real challenge is to get companies focused on tomorrow's
laws rather than today's. That is the standard to which we are
ultimately accountable."

Product Risk Management and stewardship is CMA's response to
escalated calls for TUR and bans, and key plant in CMA's TSCA
reauthorization advocacy.

Summary & "Take-home" Thoughts:
* Hazard and EXPOSURE must both be considered (i.e. a
product/chemical in its particular application).
* Product Stewardship/Risk Management is THE appropriate
alternative to product bans/TUR.
* "Aggressive implementation of Product Stewardship
programs/processes throughout the Chlorine value chain is
critical to our future"


RON WHITFIELD, Charles Rivers Associates.

At lunch Ron asked me to please not quote him out of context.  I
responded by suggesting that Greenpeace wasn't the one who
reported him telling the industry to prepare for "sea changes,"
but rather an industry trade press reporter.

There are two relevant scenarios for the industry in the
future:
*  Balanced growth (diminished political pressures, some sectors
take up slack in others); or
*  Permanent decline (aggressive marketing of green alternatives,
heavy political and environmental pressures).

Three risk categories:
* Decline (P&P, solvents)
* Potentially at risk (EDC/VCM/PVC, propylene oxide, Agricultural
chemicals, phosgene, epichlorohydrin)
* Most protected (Water, pharmaceuticals, TiO2)

Characteristics favoring balanced growth include:
* diversification of end uses
* difficulty of replacing many applications
* strength of PVC
* high profile beneficial uses
* strength of U.S. on world market

Characteristics which favor permanent decline scenario:
* Some uses are easily replaced
* Regulatory tools exist to deal with adverse health
consequences, though that depends on breakthroughs in science
Other factors:
*  Market place issues:  aggressiveness of green competitor
industries, pace at which customers develop alternatives.
*  Activity of lobbyists at regulatory level.
*  Public attitudes and perceptions (now in favor of Cl-)
*  Triggering event or events.

Wild card: pace of offshore development of chlorine-dependent
industries.

(DDT, Pb in gas, asbestos, CFCs).

With CFCs, PCBs, DDT the actual market decline came before the
ban was imposed.  For asbestos and lead declines were more
gradual and litigious.

Changing market creates winners and losers:
Winning strategies:  canabalization (substitutes developed in the
same company), positioning yourself in high value markets (e.g.
DuPont's development of CFC replacements).

Losing strategies: fight to the bitter end, denial.

Markets will be the most imporant battleground.  Governments and
regulations will not be the driving force, but companies will
need to respond properly.  Successful positioning is possible
with both balanced growth or decline scenario.

"Don't be distracted by small losses.  Large segments of the
market will remain, even if some disappear. The range of
opportunities is greatest for early movers."

ROGER SHAMEL, Consulting Resources Corp.

The industry needs to find simple supportive expressions, using
tactics like Greenpeace:  for instance, how ridiculous it is to
talk of banning chlorine when there's so much in our bodies.

Solvents, chlorinated benzenes and paraffins, and phosgene for
diisocyanates and urethanes will decline.  HCl, TiO2 from
Titanium Tetrachloride will experience moderate growth.
Environmental concerns will slow the growth of the water
treatment market.

Bold prediction: One of the major 5 -- Dow, Olin, Oxychem,
Vulcan, or PPG will leave the chlorine market by the year 2000.

Up and coming chlorine market players are LaRoche and Pioneer.

45% of chlorine will go to EDC production by 2005.  Global demand
will grow by 3 MM Tons in next ten years.  Most rapid demand will
be in the developed area of the world.  "EDC will be one of the
few large-scale investment opportunities in the next ten years."

Promising areas for R&D:
  -  Improved methods for making products, including improved
membranes which provide greater energy efficiency.
  -  Rationalization: continuous production of customized
products, so producers can vary output according to customer
demand.

Sees little threat from regulation, though there's a maturing
anti-chlorine sentiment, because substitution is largely
unnecssary and impractical.  "User, Regulator, and Consumer
Education can lead to common sense solutions."

The next industry threat will come from within:  blind optimism
will lead to the construction of overcapacity.

BILL TITTLE, Chem Systems

Predicting 2005 seems easier than could turn out to be.  Think of
10 years ago:  would you have predicted the P&P/dioxin link,
Montreal Protocol, TRI?

Key Drivers:  Risks to Chlorine-Based Chemical Processes:
*  Links bet. OCs and human health, ecosystem problems.
*  Limited science on these issues.
*  Experts strongly disagree on fundamental biological science
and derivative risk issues, so science will take longer than
smoking/health and ozone depletion issues.
*  Public (and government) having been through these public
health crises/debates may lose patience and regulate/ban on
limited scientific evidence.

Importance of PVC in future industry structure is clear.

Need to Emphasize that Lifecycle Analysis Shows Environmental and
Resource Conservation Advantages of PVC:
*  Lifecycle analysis (LCA) increasingly mandated by gov'ts in
formulating public policy and deciding among technical
alternatives.  It's also favored by the private sector in
decision-making.
*  LCA considers the full range of emissions, resource
consumption, and other environmental effects of all the steps in
and supports for raw material acquisition, manufacturing,
fabrication, transportation, use and disposal/recycling of
commodities and products.
*  Significant tradeoffs exist between PVC and all of its
alternatives.
*  PVC is relatively unscathed from a half-decade of intensive
analysis--LCA's have reversed some government policies and other
opposition against PVC in Europe.
*  LCA Observations--Advantages of PVC:
    - Lower energy use and CO2 emissions than many competing
materials;
    - Other plastics use more petroleum
    - Most stable/least dispersed chlorine end use; the only
major use essentially more inert and benign than salt  - VCM
production a "classdic in-process waste minimization"
highly optimized by EDC production integration with
VCM via oxy-chlorination of HCl
    - Low VCM discharges since 1970's
    - Only minute residual monomer
    - Naturally fire retardant
    - Use in construction improves energy-efficiency.
*  LCA Analysis from East Asian Venue:
    -  For water pipe, PVC consumes less energy than ductile
iron, even if iron 100% recycled.
    -  Compared to PE pipe, requires less energy to produce, but
if fossile fuel values of PE are aggressively recovered by
combustion or material recycling, PE can equal or better PVC's
energy economy.  If PVC is also recycled (more of a challenge),
it can regain the advantage.
      -  Concrete sewer pipe shows manufacturing advantages over
PVC in energy consumed; however, transportation and installation
energy/costs can mitigate the advantage, depending on distance
and terrain
*  Packaging in decline, auto uses increasingly at
risk, and some replacement has occurred in flooring in Europe.

Global rebalancing as a result of changing supply/demand.  1
million tons of production capacity will be shut down, but there
will be overall growth.  Concentration of growth is in Emerging
Markets and Restructuring/Consolidation in Industrialized
Markets. Continued shutdown of inland plants linked to declining
users (P&P in northwest, e.g.)

Chem Systems did a recent PVC/EDC/VCM/Chloralkili multiclient
study.

3/4 of global chlorine demand growth will be in developing
countries.  Increase in EDC trade (esp. from U.S. gulf coast).
Case studies of Global supply patterns:
* Indonesia has substantial operating cost disadvantages.
* Brazil: much lower operating cost penalty; currently PVC
exporter.

Despite transportation costs and duties, imports are cheaper to
places like Indonesia. Import duty levels in developing countries
is an important factor but GATT will pressure it down.

China and CIS are major questions.

CHARLES MEARS, OxyChem

U.S. chloralkili is well positioned: low costs (salt, brine,
energy).  Less Hg cells.  Larger-scale plants.  Most
sophistocated  distribution system.  US exports growing steadily.

Chlorine demand buoyed by EDC/VCM/PVC chain.

With 1% chlorine growth and 2% caustic growth (tied to GNP),
balance favors chemical caustic growth or primary soda ash.

END - END - END -END -END -------------------------------------

Jackie Hunt Christensen
Institute for Agriculture and Trade Policy
1313 5th St. SE, #303
Minneapolis, MN 55414 USA
phone: 612-379-5980
fax: 612-379-5982
e-mail: iatp@iatp.org