Primed for Success: The Story of Scientific Design Company: How Chemical Engineers Created the Petrochemical Industry

209 Pages·2019·6.22 MB·English

by  Peter H. Spitz

Peter H. Spitz
Primed for Success:
The Story of
Scientific Design
Company
How Chemical Engineers Created the
Petrochemical Industry
fi
Primed for Success: The Story of Scienti c Design
Company
“More than a company history, Primed for Success is the story of the chemical industry in the
United States. It is comprehensive in scope and detailed in its treatment—an essential read for
anyonewhostudiesthechemicalindustryorhasbeenpartofit.”
—ThomasM.Connelly,ChiefExecutiveOfficer,ACS
“PeterSpitz’detailedandengrossingaccountoftheriseofthepetrochemicalindustry—whichset
inmotionthebuildingblocksofthemodernindustrialeconomy—captureshowtransformativethe
industryhasbeentonotjusteconomicdevelopment,buttosomanyaspectsofmodernlife.”
—AndrewN.Liveris,FormerChairmanandCEO,DowChemical
“PeterSpitzisopeningupanewchapterinthehistoryofthepetrochemicalindustrythatprovides
a lasting platform and remembrance of the great entrepreneurs of the industry. The new book
shouldbeveryvaluableforthenewgenerationofchemicalengineersastheyrecognizethevision
andcreativityofmanycourageousscientistsandengineers.”
—WernerPraetorius,PresidentPetrochemicals(ret.),BASFGroup
“PeterSpitzdeliversanessentialhistorywithPrimedforSuccess.Hedetailstheinsidestoryofa
disruptive startup that invented the breakthrough technologies that would help usher in the
petrochemicalage.Thebook’sinsightsonentrepreneurship,successfulinnovationandtherisksof
overreachandhubrisofferenduringlessonsfortoday’sengineersandprofessionalsaswell.”
—RobertWestervelt,Editor-in-Chief,ChemicalWeek
“Ralph Landau was one of the giants of the chemical engineering profession. Both experienced
and early-stage chemical engineers can appreciate how Ralph created a new business model as
wellaslearnmanylessonsfromhistechnicalandbusinessleadership.”
—JuneC.Wispelwey,ExecutiveDirector,AIChE
Peter H. Spitz
Primed for Success: The
fi
Story of Scienti c Design
Company
How Chemical Engineers Created
the Petrochemical Industry
123
PeterH.Spitz
Scarsdale, NY, USA
ISBN978-3-030-12313-0 ISBN978-3-030-12314-7 (eBook)
https://doi.org/10.1007/978-3-030-12314-7
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This book is dedicated to a group of largely
chemical engineers who worked at Scientific
Design Company for periods between its
founding in 1946 to the early 1980s, when
its management took an immense gamble
and effectively lost the company. Those of us
who worked there will never forget the
Camelot-like atmosphere that prevailed and
allowed us to achieve extraordinary results.
Foreword
In 1948, as a recently graduated mechanical engineer, I joined Imperial Chemical
Industries,thedivisionofwhich,situatedinNorth-EastEngland,becameknownas
Heavy Organic Chemicals Division.
ICI,atthattime,waswaryofthenewdiscipline—chemicalengineering—which
wasbeginningtoflourish,mainlyintheUSA.ThephilosophyinICIthenbeingto
recruit chemists, expecting them to pick up the rudiments of engineering, and
engineers, expecting them to learn, on the job, some of the chemistry of the
products and processes involved in their particular division of ICI.
A very senior engineer, on a recruiting mission to the nearby university from
whichIwasagraduate,cametotellthoseofusabouttograduate,oftheveryhigh
levelofengineeringinvolvedindesigningchemicalprocesses,involvingdesigning
muchoftheequipmentrequired,andhavingthembuilt.Allthiswasnewtome,as
was ICI,of whichI had,untilthen, never heard. To underline hispoint,he invited
me to visit an ammonia plant nearby.
HeandIwalkedandsaw,indetail,themile-longprocess,startingwiththecoke
oven plant, to the ammonia reactors, designed to operate at two hundred and fifty
atmospheres and requiring very novel engineering at that time. “There you are,
youngman”said myhost attheendofthetour, “itisall high-qualityengineering,
except what goes through the pipes, and in the reactors.”
I was hooked!
What a transformation in the petrochemical industry then ensued! The plastics
era took off. Hardly a month went by when there was not an announcement of a
newplastic,orfiber,oranewandbetterprocesstomakethem,hittingthenews.It
was averyexciting time forthechemists,chemical engineers, andengineers ofall
kinds to be involved.
Scientific Design Company was right in the middle of all this activity. It had
found aunique niche for itself. ICIendedup having tolicense fiveprocessesfrom
SD, because, even though ICI had a very large research program on products and
processes,SDbeatthemtothepatentofficeonfiveoftheprocessesonwhichthey
were working!
vii
viii Foreword
Chapter7ofPeter’sbooksetsoutverywellwhySDweremoreagilethanmost
chemical giants of the time.
ICI in the early 1950s eventually embraced the, then new to the UK, discipline
of chemical engineering.
One of the principal reasons, in my opinion, for SD’s success and rapid rise to
becomeamajorplayerinthepetrochemicalworldwasthatthefirmrecruited,right
from the start, very smart chemical engineers. They were an outstanding group of
individualswhoworkedtogethertoformaformidableteam.Probably,onlyDuPont
at the time could claim to have such a productive team of chemical engineers.
Iwould addthree other pointstoPeter’sChap.7whichapplied toICI.Perhaps
some of these points applied to other chemical companies.
(cid:129) ICI set up a Corporate Laboratory wholly dedicated to “blue skies” research.
This,inmyopinion,tendedtheresearchdepartmentsofthetenICIdivisionsto
take their eye off the ball regarding a search for a better chemical route to the
desired product. There grew a tendency to expect from corporate, but not
divisional research, a new breakthrough.
(cid:129) Therewaslittleornoeffortexpendedontheengineeringprocessoftheexisting
chemical route. This did not start, in earnest, until the main board of ICI
sanctionedfundsfortheconstructionofanewplant.Thereislittletimethento
develop the engineering process, other than incorporating minor changes,
because the urge was to build the new plant.
(cid:129) Also, there became in the UK, as well as at ICI, a wariness against new pro-
cesses for chemical routes, because of troubles that arose in the many new
nuclear power plants and ammonia plants being built at that time with untried
processes.
Peter Spitz, in this book, captures the fascinating story of SD and Halcon/SD,
very accurately. The book is a comprehensive and well-written account of those
transformingyearsofthepetrochemicalworld,andthepivotalanduniquerolethat
SD played in it.
ItwasnotrealisticofRalphtothinkthatHalconcouldbecomealargeoperating
company. Halcon did not have the necessary staff with the relevant experience to
achieve it. Ralph had already achieved one of his goals, that of being renowned
throughout the world.
Heshouldhavebeencontentwiththat.Hebecameaswellknownandrespected,
worldwide,ashiscontemporariesatMIT,manyofwhomhadbecomepresidentsof
major oil and petrochemical companies.
Peter’s book is a fitting tribute to the vision and entrepreneurship of Ralph
Landau and Harry Rehnberg.
London, UK Sir Robert Malpas, CBE
Member, Main Board ICI (retired)
Preface
In the summer of 1956, I saw an advertisement in the New York Times for a
position for a chemical engineer, posted by a firm I had never heard of: Scientific
DesignCompany.Atthetime,IwasagroupleaderatEssoEngineering,adivision
ofStandardOilDevelopmentCompany.IhadgraduatedfromMITwithbachelor’s
and master’s degrees and was convinced that chemical engineering would be my
chosen profession. At MIT, I had been fortunate enough to have both Professor
WarrenK.LewisandEdwinGillilandasinstructors.Lewis,inparticular,hadmade
a lasting impression on me.
ForthefirstsevenyearsIdesignedandstartedupanumberofpetroleumrefining
plants and then felt I wanted to become more involved in petrochemicals, at the
timeinahighgrowthmode.IwasinterviewedbyRalphLandau,oneofthefirm’s
founders, and shortly thereafter started to work for the company we would always
refer to as SD.
Thechangefromworkingforoneofthelargestcompaniesintheworldtojoining
afirmwith,atthattime,lessthanonehundredemployeeswasamazing.WhileIwill
always feel that my work experience at Esso Engineering was extremely rewarding
andenlightening,theatmosphereIbecameapartofatSDwasmuchmorefulfilling:
the opportunity to work in an entrepreneurial company that had to live by its wits,
while competing with established chemical operating companies and engineering
contractors. For a small company with a small laboratory, SD at that time was
already engaged in dozens of projects involving a number of chemicals. When a
project was secured by Landau or other sales executives, the client did not realize
that we often did not have a depth of knowledge of the process upon which the
design would be based, but we were resourceful, were able to gain information
quickly, and had the chemical engineering skills to come up with a good design.
What helped the situation was the fact that many companies wanted to get into
petrochemicals production, but could not obtain the needed technology from the
established producers. So, they turned to SD, realizing that they had to trust us to
help them build a plant that could compete in the new, exciting industry.
ix
x Preface
For eight years,I worked on process design and process development. At some
point,Iwasputinchargeofdesigningandstartingupaphthalicanhydrideplantfor
WitcoChemicalwithouthavingtheslightestideawheretostart.Idecidedtolookat
reportsthatAmericanchemicalexecutivesbroughtbackfromGermanyafterWorld
WarII.Thatprovedinvaluable.Weusedthosereportsandothermaterialtodesign
theplantandtofindanappropriatecatalyst.StartedupinacoldwinterinChicago,
the plant immediately experienced fires and explosions and was hampered by the
need to re-weld over a thousand reactor tubes without taking the reactor down.
Somehow,wemadetheplantworkandthiswasmy“baptismoffire,”inarealsense,
as achemical engineer.
At some point, I was put in charge of process licensing, ending up working
directlyforRalphLandauandbecominganofficerofthefirm.BobDavis,whohad
joined SD just before me with a Ph.D. in chemical engineering from MIT, had
distinguishedhimself,developing anethyleneoxide processandcatalystunderthe
directionofBobEgbert,anotherofSD’sfounders.Hewasputinchargeofprocess
development and also became an officer. Davis and I soon recognized the unique
natureofSDandbelievedthatweshouldhave“asmallpieceoftheaction.”When
this was refused, we decided to form a consulting firm called Chem Systems.
Overtheperiod1964to1998,ChemSystemsbecamewhatwebelievedwasthe
leading petrochemical management consulting firm, with offices in New York,
London, Paris, Tokyo, and Bangkok. We also built a laboratory that worked on
processes for maleic anhydride from n-butane, propylene oxide, and methanol, the
latterusingfluidizedbedtechnology.Inthe1980s,ChemSystems’consultingarm
had a strong strategy and financial practice and was often selected to work in
tandemwithlargeWallStreetfirms,supportingmergersandacquisitionsthatwere
very common during this period, when petrochemical firms had to decide on their
long-range goals.
Iwrotemyfirstbook,Petrochemicals.Theriseofanindustryduringthisperiod,
motivated to do this because I was interested in interviewing some of the, then
already much older, people who had played a role in the events that led to the
conversion from coal chemistry to hydrocarbons. With the help of Dieter Ambros,
then a high level executive of Henkel, and a good business friend, I spent an
afternoon in Mannheim, Germany, with his father Dr. Otto Ambros, earlier an
executiveofI.G.Farbenindustrie,whoheadedupacomplexthatmadeBunarubber
duringWorldWarIIataplantnearAuschwitzandwasconvictedasawarcriminal
because he had employed “slave labor.” Rehabilitated, he told me about his
post-war experiences working for W. R. Grace’s chemical business, but he also
recounted stories of his career at I.G. Farben.
In 2002, I wrote my second book, The Chemical Industry at the Millennium:
Maturity, Restructuring and Globalization, continuing my involvement and fasci-
nation with the global petrochemical industry.
IhaveperiodicallybeenbacktoMIT,atonetimegivingaseminarsponsoredby
Dr.RobertArmstrong,thenheadofthe ChemicalEngineeringDepartment,onhow
tocreateaconsultingfirm.Whenthebreakthroughonshaleoilandgascamealong,
IwasaskedtogiveaTed speechonhowchemicalengineershelpedtobringabout
x
Preface xi
arenaissanceintheenergyandpetrochemicalfieldsafteraperiodwhenthepublic
had started to think of these as “smokestack” industries.
About two years ago, Alan Hatton, head of MIT’s Chemical Engineering
PracticeSchool,askedmetospeakattheannualmeetingattendedbytheCourseX
chemical engineering faculty and by graduate students. Alan was familiar with a
keynotespeechIhadgivenayearearlierinDubaitotheGulfCoastPetrochemical
Association, in which I discussed the historical technology development of the
petrochemicalindustry.Asitturnedout,bothspeechesstronglyfeaturedtheroleof
Scientific Design Company as a leading source of breakthrough petrochemical
research. While I had been away from SD for a number of decades, I could never
forget the exciting time that my colleagues and I spent at the firm when the
petrochemical industry was in its infancy.
Soon thereafter, it all came togetherin my mind. The story ofScientific Design
and its leader Ralph Landau was compelling, even if it ended badly, with the firm
closely avoiding corporate bankruptcy after deciding to become an operating
company. I again recognized the important role of MIT in leading the creation
of the chemical engineering discipline, which was so crucial in rapidly building a
syntheticrubberandaviationgasolineindustrythathelpedtheAlliestodefeatNazi
Germany and Japan. And I thought about the fact that the petrochemical industry
wascertainly uniqueamongotherheavyindustriesindisrupting along-term status
quoinrawmaterials.Overashorttime,chemicalsthatweremadefromcoal,wood,
and alcohol would now be made from petroleum and natural gas.
I knew that I could not write this story without knowing more about what
happenedatScientificDesignafterIlefttoformChemSystems.Also,Iwondered
how it was possible for a small, undercapitalized firm with great ambitions to
developbreakthroughtechnologiesandthustooutperformtheresearchdepartments
of storied firms like DuPont, ICI, BASF, and Monsanto. I decided to interview as
many “alumni” of SD that I could locate. A stroke of luck then allowed me to
peruseanumberoforalhistoriesofchemicalexecutiveswhohadbeeninterviewed
over the years as part of its Oral History Program by the Chemical Heritage
Foundation (now called Science History Institute) in Philadelphia.
When writing this book and deciding on what kind of information to include, I
optedtoprovidesomedetailsontheactualchemistrydescribingthepetrochemical
intermediatesandend-productsthatmadeupthenewindustry.Attheriskofgetting
too granular, I decided to provide simplified flow diagrams, illustrating processes.
These will be easy for readers with a little chemical background to understand.
Perhaps there is some nostalgia involved here, as the chemistry covering
petroleum-based molecules reacting to form petrochemical end-products was
always a fascinating area for me. I recognize that researchers in the chemical
industry now appear to have largely moved on to biochemistry, material sciences,
nanotechnology, and other new areas. The heyday of petrochemical process
development only lasted for a few decades. It seems worth remembering.
Scarsdale, USA Peter H. Spitz