Part 1 of Greenpeace summary of CHEMICAL WEEK chlorine meeting

[IATP@iatp.org (IATP)]

THE POLLUTERS' SECRET PLANS: SUMMARY OF CHEMICAL WEEK
INDUSTRY
CONFERENCE ON CHLORINE

("The Changing Chlorine Marketplace:  Business, Science &
Regulations," Conference sponsored by Chemical Week,  April 11-
12, 1995. Fairmont Hotel, New Orleans, LA.)

by Charlie Cray, Greenpeace US Toxics Campaign
   847 W. Jackson, 7th Floor, Chicago IL  60607.
   (312) 563-6060, fx: 563-6099.

I have overheads from some of these presentations. Contact me for
copies.  I also have a list of attendees (about 200), speaker
biographies, etc.

The conference covered a wide range of issues related to the
chlorine marketplace including emerging science, policy and
strategy; risk management and communication; university-based
research, and the caustic/chlorine relationship.  There were also
workshops on PVC, Pulp & Paper, Water Treatment and chlorinated
solvents.

At the end a few consultants pulled out their crystal balls,
generally agreeing that growth in some areas (esp. PVC)
will offset continuous decline in other chlorine markets (Pulp &
Paper, solvents).  Other markets will still be attacked for
environmental reasons (some organic chemicals) and probably
decline slightly.  EDC/VCM/PVC will be under much attack, they
say, but will remain strong as some uses go.

The boldest prediction of the day came from Roger Shamel,
president of Consulting Resources Corporation, who said one of
the big five chlorine producers (Dow, Olin, PPG, Occidental or
Vulcan) will leave the chlorine market by the year 2000.  Seizing
on this prediction, perhaps we demand that Dow, the world's
largest maker of chlorine, get out of chlorine, since they've
always been an industry leader and are already producing some
alternatives, including olefins through insite metallocine
catalysis to substitute for some PVC use (autos, e.g.), and
chelating agents used in chlorine-free paper production
processes.

SUMMARY OF PRESENTATIONS

J. ROGER HIRL, President & CEO of Occidental (successor to Armand
Hammer).  Keynote Address, "The Chlorine Chemistry Marketplace"

Hirl led off with a quiz called "What's Your Chlorine IQ?."

Hirl then pitched an upbeat note, saying that due to the Chlorine
Chemistry Council (CCC) and specific company efforts, news
coverage is becoming more "balanced."  He also believes
"environmentalists are on the run" because they are
"associated with policies based on bad science." He suggests that
regulatory initiatives have finally begun to reflect this,
pointing out how much things have changed since when the Clinton
Administration "tried to ban chlorine" in their Clean Water Act
proposal without consulting industry.

He cautioned (a few others) that it "doesn't serve us well to
think we have the upper hand."  In other words, don't be fooled
by the Republican Congressional victory into believing the
pendulum can't swing back farther.

He said "there is little or no awareness of dioxin or its
relationship to chlorine among informed Americans."
(Something they are afraid could happen).

Then he sliced off this analogy, showing how much he hangs out on
Saturdays talking with informed Americans: it's the dose that
makes the poison.  After all, a golf ball is only a high risk if
someone like Jerry Ford is playing.

Then he got into a discussion of "natural" organochlorines (if
you know the work of Gordon Gribble, then you recognize this
gribblish):
Ecuadorean tree frogs, HCl food digestion.

Then how necessary chlorine is to avoid typhoid and cholera.

CCC's magnanimous gift of dry Chlorine sent to Rwanda to help
disinfect H20.

Memories of travels with Armand Hammer: "Russia's
problem in the 1980's was not being able to disinfect food and
keep it." (Hence the aggressive marketing of "crop-protection
chemicals" to our new market partners in the east)

Also, like so many others, Hirl pitched the need to continue
"doing the good science," especially on endocrine disruptors,
perhaps a subtle recognition that that issue is gaining political
momentum, and they need to control the discussion.

He finished, referring to the environmentalists, with this:  "our
objectives are identical, the difference is in how we get there."


DR. TERRY YOSIE, consultant with E. Bruce Harrison, the
conference co-sponsor, was one of the more interesting speakers
of the conference.  E. Bruce Harrison are crisis and risk-issue
consultants that counsel Fortune 500 Co's in crisis and risk-
management strategies.  Yosie is the former EPA Science Advisory
Board Chief (1980-88); then went to the American Petroleum
Institute (1988-92).  "Currently a member of EPA Administrator's
Environmental Futures Committee, a blue ribbon panel advising
Administrator on emerging environmental issues."

His presentation outline:
* Current landscape of the chlorine debate (science and
policies);

* Principal strategies followed by industry, government and env.
  community;

* Critique of those strategies;

* Company options in general.

THE CURRENT LANDSCAPE

So far as the science goes, he says the inadequate database is
spawning rapid research, leading to a cacophany of views.

All parties see estrogen-mimicking compounds as "a wedge issue."

He says a two year National Academy of Science study just begun
should define the research agenda for the next 10 years.  A
crucial arena.

In the area of Policy, Yosie also sees a shift in momentum on the
chlorine issue towards the business community, aided by Repub.
Congressional victory, which he also cautions should be tempered
by historical understanding of how the pendulum can swing.  For
instance, he cautions, "risk assessment legislation will raise
the prominence of estrogen-mimicing compounds."  Judicial review
of risk assessments may come back to haunt the industry, when
environmentalists find they can use the petition process. (Just
as the incinerator industry choked when indirect pathways of
exposure made them lose ground playing their own game.)

Key policy arenas: dioxin reassessment, MACT requirements (Clean
Air Act) esp. for incinerators, Wastewater discharge limits,
sludge burning and land application of chlorine-containing
sludges in P & P.

"Look out for ideas that float across the Atlantic": i.e. while
momentum shifted here with the election, not so in Europe.  (esp.
watch out for PVC, ecolabeling, taxes on cl- products, North
Sea).

INDUSTRY's CURRENT STRATEGY: Create a Flood of Science and
Economic Arguments

*  Recruit scientific allies and commission scientific reviews
that highlight uncertainties (goes along with what Harvard guy
says later -- bedevil us by examination of every picayune issue--
forcing us to go through a mountain of evidence).  If
"information is the currency" of democracy, then in this manner
they enhance the business sector's bargaining power.

*  After they have established uncertainties, "build a scientific
wall" by refocusing the debate on real vs. theoretical risks.

*  Communicate beneficial uses, economic benefits. (Another
speaker suggested that CMA/CCC do a commercial showing an average
family watching TV and little by little pull every item out that
relies on chlorine until you have them naked as cavemen...)

*  Industry needs to build communication outside the beltway
among industry, now that they've done a good job inside.

*  Advises them to communicate better to non-eggheads.

GOVERNMENT STRATEGY (No Strategy:  Except to Just Stay in the
Game)

EPA is like a hockey goalie: business and congress are on a power
play.

**  EPA is balkanized as to how to handle Cl- issues.   Like the
Movie Brazil:  there are different views in different
departments, not well coordinated (an argument for the chlorine
study?). Different statutes encourage different views and
different bureaucratic interests that are not well handled by the
top. Polarization between senior civil servants and political
appointees.  Result is willingness to do more research (e.g.
recent federal notice on estrogen-mimicking compounds).

**  For drinking water issues EPA is moving away from focus on
carcinogenesis toward pathogens.  EPA Drinking Water Office would
like to make the case that Cl02 is ineffective for
cryptosporidium, but policy and research people are also
skeptical of ozonation, other alternatives.  University
epidemiologists who specialize in the issue also see arguments
that Cl is not effective against pathogens.

EPA people see that in 3-5 years there will be a "wicked battle."
  - public concern will mount
  - cryptosporidium-like epidemics could be trigger events
  - counter reaction to regulatory reform

These scenarios are based on external forces, not creative
thinking by the agency itself.  They want to reassert leadership,
but have no plan.  Waiting to handle next crisis.  Most policies
respond to crisis (Love Canal --> Superfund; Bhopal --> SARA
Title III; Valdez --> New Oil Regs). EPA not always good in
crisis (uses ocean incineration as example).  Need to have
relationships in place to support structures in crisis because
debates are not scientific.

Believes EPA is looking for EPA/Industry collaborative study to
substitute for the CWA proposed study. "EPA-Amoco Yorktown type
project"

US ENVIRONMENTAL GROUPS' CURRENT STRATEGY: TIGHTEN REGS,
EDUCATE
CONSUMERS AND LEVERAGE THE MARKETPLACE
* Participate in scientific debate (T. Colburn)

* Drop chlorine ban proposals (Greenpeace excepted)
  I.e. more pragmatic.  With less resources, need to focus
  priorities.  E.g. Reshape issue to env. persistent compounds.

* Dialogue w/industry/push for substitutes.

* Personalize the issue (e.g. assault on the male) to do an
  end run around science focus to risk-avoidance focus.

* Flood consumer marketplace to leverage market.
  Example used was 3/7 Soedra Cell press release; EDF recycled
  paper initiative. Here the objective is to make sure that
  chlorine becomes a consumer issue and chlorine-free processes
  and products become a competetive issue.

CRITIQUE OF STRATEGIES:

Industry:
* Successful in legislative/regulatory arena in past year.

* Over time, debate will become less science-oriented:
  "Ultimately, Cl- debate is a business debate."

* Challenge of crafting future messages not yet met.

* No message to consumers:  may not be possible.  The burden is
on individual companies: trade associations can't do it.

* Risk of industry fragmentation if/when chlorine becomes
  a competitive issue.

* Preserve long-term reputation by avoiding short-term advocacy
success.  "It's easy to sacrifice credibility and a hell of a
time regaining it."  Associate yourselves with the best minds.
Get advanced information on where research is going.

* Industry faces a challenge from the populist mind-set.  Few
centers of authority can withstand withering media scrutiny, less
rational debate (OJ-obsessed media, etc.).  "Wildly swinging
pendulum."

*  Business community should look at enviro's tactics:  base
message on values.  Make arguments on quality of life.

*  Grassroots strategy:  Citizen Advisory Panels's (CMA tactic)
etc. work.  Splashy new campaigns are not needed unless see
specific threat.  Hence, quiet CCC network of chlorine champions
(3,500 names) is good strategy.

*  Focus groups are necessary for companies to understand other
stakeholders: get objective info, don't just rely on own
intuition.

*  Different state standards make it difficult to standardize, so
state-level strategies not always good, except in key states (LA,
TX, CA).

* Few Companies want to be seen as environmental leaders.  Can
get burned (e.g.: Body Shop, Mobil's marketing of Hefty Trash
Bags). It's better to take the pulse of your customers and stay
close to them.

*  It's also risky for chlorine industry's competitors to stand
up with enviro's to call themselves green:  market shifts won't
happen that rapidly.  Relationship w/enviro's won't be crucial to
business strategy.  Movement of the market is less rapid in the
U.S. than overseas, esp. EU, Asia.

* Pursue strategy of "quiet differentiation": Any company in
chlorine business ought to be constantly examining processes and
product lines because regulations may take a bite out of the Cl-
apple, and competitive industries may leverage regulatory systems
to block Cl- users.

* Demonstrating continuous progress in reducing organochlorine
releases (TRI counts) is a successful tactic.

EPA

*  Limited ability to identify private sector opportunities: too
tied up w/internal management challenges.

*  Expecting a crisis that will galvanize public concern and
bring them to prominence once again.

ENVIRONMENTAL GROUPS

*  Successful in placing chlorine issues on policy agenda, but
   losing momentum.

*  Continuing to influence the science agenda.  Enviros will
reconcile the contradictions between what they view as a "crisis"
and conflicting evidence like lower body burdens by asking new
questions about ecological effects, reproductive effects, etc.

*  Taking the longer-term view outside of Washington.

*  Could adopt same strategy Harry Truman used to get Marshall
Plan through Congress:  scare the hell out of the country to get
things passed.  Yet risk is that things like "assault on the
male" strategy is delivered at a time when the public is
skeptical of apocalyptic scenarios.  Media is tired of Chicken
Little, but pendulum can swing with Americans' perception of
insecurity.

* "Assault on the male" could be more prominent than women's
health issues because environmentalists calculate -- ??? -- that
males are power players and therefore vulnerable to this message,
and because of the strength of recent research linking human-
animal data for males. (E.g. Danish study on male reproductive
health)

*  Enviros have had marginal success so far in finding private
sector opportunities and allies, but could be big in the future.


INTERNATIONAL PERSPECTIVES

TONY G. HORI, Deputy General Manager of Membrane Sales &
Technology Dept., Asahi Chemical Industry Co., Ltd.

Frankly this one was a bit over my head, but Tony discussed the
relative benefits of different chloralkili membrane technologies.

Recent improvements of ion-exchange membranes.  Discussed
membrane structure, grades.  Plant performance efficiencies with
different cells, cell voltage composition, effects of Silicone,
Calcium, Iodine and Barium on membrane performance.

Present position of electrolytic NaOH process:
+  Elminates the need for further concentration.
-  Increases elctrical voltage needs.
Concludes that economic implementation limited to regions with
low cost electricity, and markets where Hg-conversion or new
plants.

DR. MARK HAMMOND, Industry Analyst with Harriman Chemsult Ltd.
Harriman publishes "Plastics in the Environment" newsletter.

Gave very quick overview European situation.

Environmental assault = attack on chlorine and downstream
markets, as well as the use of mercury cells.

Source of environmental pressure attributed to Greenpeace.
Cites PVC:  effective local campaigning, including Copenhagen
demonstration with Chlorissa.  Audience laughed at use of Barbie
(as if it is a ridiculous tactic to use).

Suggests cooperation among groups such as GP/WEN and FoE is
potential danger to the industry.

Gives interesting graph of net environmentalist gain on chlorine
issue in W. Europe, suggesting that peaked in early 90's when
industry didn't respond, and that its response has led to current
rollback.  Cites failed EU packaging challenge to PVC, recent
studies:  Enquete, French Academy of Sciences, Swedish National
Chemicals Inspectorate avoidance of PVC issue.

Industry proposed way forward:  EuroChlor voluntary agreements
for Hg emissions, PVC recovery, technology transfer to Eastern
Europe, ECVM Charter.  Better defense of products:  ECVM PVC
info. center.

Claims attack on mercury cells "not justified" when they have
reduced mercury emissions.  "At this point we're spending
$800,000/lb of emissions."  Considering the voluntary agreement
to build new Chloralkili plants with other technologies there's
no reason to shut Hg cells before they're worn out.


VICTOR SHANTORA, Director General, Technology Development,
Ontario Region, Environment Canada

He began by describing the importance of Great Lakes issues to
Canada.

Described how most levels of toxics have gone down, but residual
levels of persistent, bioaccumulative toxins are still a problem
in some instances.

Improvements in Great Lakes:  Return of bald eagle to Canadian
shores of Lake Erie ("the problem is now more one of available
habitat than toxic substances").   Improved cormorant, osprey
populations.  Common Tern reestablished in Toronto Harbor.

Problem not entirely solved.  Reproductive failures, crossed
beaks, hormonally-related problems.  He put up an interesting
overhead of levels of dioxins in Lake Ontario trout, which has
actually increased in the last few years up to around 50 ppt.
Data is from Dept. of Fisheries and Oceans.

He went on to suggest that the problem is not just in the Great
Lakes -- dieldrin in polar bear fat in northern Canada raises
concerns related to world atmospheric air movements.  Cold
condenses toxics released in the south.  For this reason Canada
is pushing a lot on the international (UN) level to establish
protocols to deal and eliminate the long-range transport of
chlorinated chemicals.

Briefly commented on specific industrial sectors:

Perc. (dry cleaning solvent) recently declared a toxic substance
in Canada.

PVC is a "wild card" in Canada.  Potential concerns exist about
toxic additives.  There's a lack of good data on PVC product
lifecycle.  Environment Canada is meeting with Canadian Vinyl
Institute to try to reach an environmental performance agreement,
esp. a memo of understanding related to additives.  ("Hopefully
the industry can satisfy the public with that")

He wasn't at the recent IJC Science Advisory Board workshop on
transition planning, but wants to make sure industry understands
importance of it, since "Greenpeace" recommended the use of PVC
as a model for Chlorine phase-out.  That process has no effect on
Memo of Understanding, but "I'm just trying to give people a
heads up."

"The best way to be a government-free mill is to be effluent
free" (working to obtain memo of understanding to reach TEF)
But also mentioned industry attempt to attribute toxicity of
effluent to pulping circuit, not bleaching.

THE CAUSTIC/CHLORINE RELATIONSHIP

Billy Tullos, Business Manager, Elf Atochem

Industry has traditional belief that historical cycles govern
chloralkili, but paradigms can shift.

E.g. U.S. Auto Industry used to believe no need to worry about
small car market, IBM missed key paradigm shift when $ went to PC
and software developers rather than mainframe makers.

Industry's perspective is that Cl- demands set the operating
rates, while caustic goes along for the ride.  This led to strong
cyclic price patterns (strong supply/demand imbalances).

Current situation.  High U.S. capacity utilization.  Strong ECU
demand (both Cl- and caustic high in demand).  1994 record year
in operating rate as well as tons produced.  95 not likely to be
as high because of maintenance, outages.  But demand still up
(temptation to build more).  High growth for key chloralkili
products:  PVC chain derivatives (EDC/VCM).  But negative
regulatory (perception) environment. This has led to difficult
investment scenario (where regulatory environment and market
prospect contradict each other).  Explains Formosa/Oxy
investments in difficult climate as net gain of zero, balancing
the closures of other plants in other regions.  "You would see a
glut of plants -- like in previous industry cycles -- if it was
attractive."

Oxychem most bullish of all.

Investment markets differ between different global regions.
European investment look weakest, since cost structure (raw
materials, energy) higher in Europe than U.S. Gulf, Mideast.
Experts very bullish about Pacific Rim, but investments will go
into value-added chlorine (EDC/VCM/PVC), not necessarily
chloralkili.

Projections (here everyone wakes up like they're in an E.F.
Hutton commercial):
*  Global ECU shortage.
*  Strong ECU values w/more balance.
*  Greater concentration of capacity, esp. in US Gulf, mideast.
(based on salt, ethylene, cheap power availability).  Most likely
to see fully integrated plants rather than chloralkili alone.
*  Alternate alkalis will rise in demand and value.
*  Reallocation of chlorine to most profitable market.  If
chlorine goes short, will canabalize own markets.



Luncheon Keynote:  KIP HOWLETT, of the Chemical Castration
Council

The pressure to build a coalition out of a group of companies and
industries with different specific interests means CCC has to
represent the lowest common denominator.  Thus Kip's speech
sounded like a cross between a pep talk and a pseudoscientific
rant.

He started with "These are very exciting times in Washington,"
and went on to recommend two books, "Death of Common Sense: How
Law is Suffocating America" by Philip Howard, and Newsweek
reporter Greg Easterbrook's "Moment on Earth: Why Nature Needs
Us," to help us understand chlorine issue in larger context.

Brad Lambert, an Associate with Harris, DeVille & Associates
(communications consultants from Baton Rouge) leaned over and
said, "Easterbrook also wrote a great editorial for last Sunday's
LA Times."  Wink wink nod nod, oh yeah our pundits and spin-
doctors have you pitiful ragtaggers on the run.

As one of the leading social scientists of our era, Easterbrook's
thesis is that we need to move from environmental management
based on a reaction to crisis to reasoned management balanced
with society's other needs.

(As if CCC is promoting "reasoned management" when they
mischaracterized the Clinton chlorine study proposal as a
proposed ban, whipping up a million letters from their customers)

"The strength of the American experiment in democracy is the
inherent strength of its people.  They've got lots of common
sense and they make good decisions every day based on common
sense.  they expect that industry will be a responsible steward
of its products and processes, unless they are given a reason to
think differently."

"Perhaps you've lived in a community that takes enormous pride in
its fire department, especially if it's a volunteer fire
department.  The American people are not going to have their fire
fighters losing their helmets and protective masks and the gear
on their firetrucks because environmental groups have chosen
chlorine as the stalking horse for the chemical industry."
(Hm...does that mean the chemical industry will stop making PVC
because the firefighters see the damage toxic gases create when
it disintegrates in a fire?)

"Dioxin and dioxin-like materials pose a real challenge to the
common sense and ecorealism issues we've been discussing."

"Efforts to put other compounds in same risk basket as 2,3,7,8
TCDD" are flawed.  Must look at furans and PCBs directly. (Stall
tactic)

"There is a health trade-off that is illustrative.  We can
regulate furans even more stringently from hospital incinerators,
the same furans that come from your household furnace, and not
affect what we carry in our bodies, and impose costs on hospitals
that preclude investments in new diagnostic equipment."

Forest fires and dioxin:  "mother nature carries the starter kit
for dioxin.  Do we bring Smokey the Bear to the Witness Box?"

Other snapshots from the Kipper:

"The goal of the CCC is to inject common sense into the debate."

"We have spent tens of millions of dollars on environmental
protection in this country.  I would make two observations.
First, we got bang for our buck.  This place is cleaner.  Second,
we had the dollars to spend."

"Greenpeace called for a ban then switched to phase-out" because
of the socioeconomic impacts.

"There is no questions but there have been legitimate questions
raised surrounding chlorinated organics.  We have dealt with
those issues and we continue to deal with the issues.  We have
committed to characterizing and reducing our sources of dioxins.
We are focused on the issue of those chlorinated organics that
persist in the environment and bioaccumulate up the food chain
and are toxic."

"We have characterized and are reducing our dioxin." (i.e. it's
not toxic, and it's from nature, so it's not our problem, but we
are reducing it anyway)

"Using Chlorine Dioxide, dioxin is not produced...  Chlorine
dioxide saves forest resources, because it produces the strongest
pulp and is therefore more recyclable."

PVC solves problems:  brings drinking water to the third world,
and saves energy by replacing ductile iron:  "Replacing that pipe
with ductile iron pipe would require about 22 billion pounds of
cast iron.  If we ask rhetorically about the environmental impact
of producing that much additional iron pipe, we must raise the
question about the impact of iron ore mining, and of smelters,
and of coke ovens.  We must also ask about energy consumption,
since we know it takes three times as much energy to process iron
pipe as it does to process vinyl.  And that doesn't factor in the
increased energy needed to transport, handle, and install iron
pipe...Vinyl's major uses are pipe and home construction.  What
little vinyl goes to packaging and finds its way to the waste
stream, if burned, can readily be controlled for dioxin and
dioxin-like materials by best available technology.  Burning wood
and coal combustion are also dioxin sources.  If our policy is to
eliminate precursors, then carbon and heat must go on the list."

And finally, chlorine has "proved the answer to feeding an
expanding population" because of it's use in "crop-protection"
chemicals. "Without having to expand the land we clear and farm."

"The chemical industry and the CCC subscribe to the codes of
Responsible Care.  At CCC, we have a very clear focus on the
stewardship code and are increasing our efforts on product
stewardship..."

MEASURING THE COST OF SUBSTITUTES - PANEL DISCUSSION

Dick Erickson, Weyerhauser

Summary

"Oxygen Delignification" and "Extended Delignification" are
becoming centerpiece technologies for the improved manufacture of
bleached paper products on a global basis.  These technologies
facilitate the elimination of elemental chlorine as the primary
bleaching chemical, allowing more emphasis on chlorine dioxide
and oxygen-based chemicals.  Although the debate around
chlorinated organics and their impact on the environment
continues in North America, the discussions elsewhere in the
world are moving to another level - bleach plant effluent
reduction.  Now terms like BEF (bleach effluent-free) and "closed
mill" are being added to the list.

During the Q/A portion, he answered a question referring to
Howlett's assertions by saying that if you build a new mill with
extended cooking, ozone, etc., the final end product strength
will be equal to what's coming out today (i.e. oxygen-based
chemicals produce a product which is just as strong).  It's only
if you have to go to Totally Chlorine Free with existing
technology where fiber strength could be an issue.

He basically said that as the technology develops you can close
the loop in an economic way.  "The costs of going Totally
Effluent Free will go away over time."

Why is Cl02 going down?  As move into extended delignification,
oxygen, you're using 2/3 les chemicals, and oxygen
delignification will become a centerpiece technology.

His gut feeling is that there will be a trend toward Cl02 in the
next 5 years, but then it will go down.

"It is clear that oxygen delignification and/or extended
delignification will play important roles in the reduction or
elimination of bleach plant effluent, even if some chlorine
dioxide is used in the future.  Weyerhaeuser's view is that these
lignin-reducing technologies applied prior to bleaching are
"centerpieces" to the strategy.  This view is supported by the
evolution of technologies around the world."


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