Document DdjnZo3JJLJkB6v71Zg2Dxzd

MONSANTO INDUSTRIAL CHEMICALS COMPANY WELCOMES MR. M. J. MC DONOUGH WESTINGHOUSE ELECTRIC CORPORATION St. Louis, Mo. June I, 1972 HONS 043104 INDEX BACKGROUND DISCUSSION PAPERS SECTION I MICC SUMMARY POSITION ON DIELECTRIC AROCLORS II WESTINGHOUSE PURCHASES OF CAPACITOR AND TRANSFORMER INERTEENS 1968-1972 (Eat.) III MONSANTO DIELECTRIC FLUIDS - Pricing Capacitor Aroclor to Westinghouse 1953-1972 - Pricing Tranaformer Inerteen to Westinghouae 1968-1972 - Pricing Characteristics and Cost Increases IV MONSANTO PRESENTATION TO FEDERAL GOVERNMENT PCB TASK FORCE V SUMMARY GOVERNMENT PCB TASK FORCE REPORT AND RECOMMENDATION VI MONSANTO RESEARCH PROGRAM - PCB REPLACEMENT PRODUCTS. COOPERATIVE PROGRAM WITH WESTINGHOUSE PAGE 1 2 3 4 5 6 ZL MONS 043105 0 HONS 043106 MONSANTO INDUSTRIAL CHEMICALS COMPANY SUMMARY POSITION ON DIELECTRIC AROCLORS lew of the PCB ecological situationaf^y/ CO'nTrri-*!-? ~nH *Mrr T(, 7i) Monsanto decided to^wnwi in the dielectri Aroclor business because of the electrical industry's need for these products based on their unique performance characteristics, and because i industry supported Monsanto with special agreemteents ofr, irnndemmnniiffiiccation. T./fa f/jtJst-f tJ!./ 2) Monsanto lMR voluntarily phased out of^imany fa rJ " sell! only to approved -rr\f/n fa i This decision was U supported recently tby'the U.S. Government PCB Task Force. 3) Monsanto wit] l/raore env, yixata= /> ^ '41^ Mon3anto4costs for dielectric Aroclori have increased because of: - Lost sales volume/lower production divisor - Pollution clean-up costs - Research & development expenses on new products - Toxicity, biodegradation test work - Plant investments 5) MonsantoNias had (since 1969) a research and developtnentxorogram to find "PCB" substitutes in the dreleb^ric area: - To date sane prbmising leads - A capacitor^experimental sample . - Transformer Fluid - no candidates as yet - At least 2-3 years away from commercialization 6) On balance, the ecological risks have been substantially reduced by Monsanto and customer actions. B) Mofvsatfto has long valued our relationship with Kestir.ghouse and desire to\work cloie^y with yoxkat all levels of Mana^g^ient. \ HONS 043107 MQNS 043108 m WESTINGHOUSE PURCHASES OF CAPACITOR AND TRANSFORMER INERTEENS LOCATIONS Bloomington, Ind. Total Capacitor Inerteen POUNDS 1968 1969 3,610,000 2,724,000 3,839,00c1 2,724,000 1970 1971 1972 Est3 2,557,980 1,032,600 2,046,000 2,566,38o2 1,051,6502 2,100,0002 Notes: 1) Includes small sales to Vicksburg 21 Includes small sales to Cleveland . 3} Annuallized, from first four months Sharon, Pa, So. Boston, Va. Phoenix, Arlz. Service Shops Total Transformer 5,873,000 -- -- 1,003,000 2,596,000 2,051,000 237,000 740,300 2,244,520 3,469,120 323,900 1,399,866 1,213,000 4,083,000 225,000 285,000 270,000 3,927,000 270,000 393,000 6,876,000 5,624,300 7,437,406 5,806,000 4,860,000 6 0 U * SN0W Total Westlnghouse 10,715,000 8,348,300 10,003,786 6,857,650 6,960,000 MONS 043110 Historical Price of Capacitor Aroclor Sold To Weatlnghouse Year 1953 1957 I960 1964 1966 1970 1971 1972 Price Per Pound (Bulk) 14.0* Not Delivered 13.88* Delivered 14.98* Delivered 14.50* Delivered 14.95* Delivered 16.00* Delivered 18.00* Delivered 20.50* Not Delivered Product Aroclor 1242 Aroclor 1242 Aroclor 1242 Aroclor 1242 Aroclor 1242 Aroclor 1242 Aroclor 1016 Aroclor 1016 t HONS 043111 Historical Price of Transformer Inerteen Sold To Westlnghouse Electric Company- Year June 19^8 Jan 1, 1971 April 1, 1972 Price Per Pound (Bulk) 13.^5# Not delivered. 16.50^ Not delivered. 19.5C# Not delivered Product Inerteen 54201CM (100* Aroclor 1242) Year July 1, 1970 Jan 1, 1971 April 1, 1972 Price Per Pound (Bulk) 14.70^ Not delivered 16.70^Not delivered 21.00^ Not delivered Product Inerteen 54201 KA (70* Aroclor 1254 + 30* TCB) II tl ( HONS 043112 ( MONSANTO DIELECTRIC FLUIDS Pricing Characteristics 1. Unusual price stability until 1970 even though ----- Cost Increases labor Coats: Raw Materials: Indirect Fixed Costs: 197J< Increase (1953-1972) 20% Increase (1953-1972) 4l Increase (1953-1972) (e.g. Capacitor Fluids Increased by only 7%, 1953-1969) 2. Increase 1970 - 197ijiue to: A. Successful Development of Aroclor 1016 , B. Loss of 45ft PCB Sales to other markets -- Divisor loss. C. Costs of Environmental Control Programs --( Incinerator Program Plant Clean-up > C MONS 043113 [ hqns MONSANTO PRESENTATION TO FEDERAL GOVERNMENT PCB TASK FORCE MAY 15, 1972 OBJECTIVES O PROGRESS REPORT ON LABORATORY BIODEGRADATION OF PCB'S O RESIDUE ACCUMULATION STUDIES IN FISH, BIRDS AND MAMMALS O TO SHOW REDUCTION IN LESS BIODEGRADABLE PCB'S AS A RESULT OF MONSANTO ACTIONS ON SALES AND PRODUCTS X O z ir  MONSANTO PCB ACTIONS O PHASE-OUT OF PCB SALES WORLDWIDE IN ALL APPLICATIONS EXCEPT DIELECTRICS O CONVERSION OF DIELECTRIC FLUIDS TO MORE BIODEGRADABLE PCB'S HONS 0 4 3 1 1 6 '"N MONSANTO PCB SALES IN U.S.A. (million pounds) DIELECTRICS ALL OTHERS TOTAL Co 1969 37.0 30.0 67.0 1970 H0.5 33.5 79.0 ' 1972 (est.) 32.a -- 32.0 MONS 0 4 3 1 X 7 MQNS 0 4 3 1 1 8 *. \ EFFECT OF PHASE-OUT POLICY PCB SALES REDUCED IN U.S.A. BY 30 TO 33 MILLION POUNDS. OR A5X  PCB PRODUCT CHANGES IN DIELECTRICS CAPACITORS ^ 97% CONVERSION TO AROCLOR 1016 TRANSFORMERS ELIMINATION OF AROCLOR 1260 HONS 0 4 3 1 1 9 DEGREE OF BIODEGRADATION OF PCB'S BASED ON DATA PRESENTED O TRANSITION IN BIODEGRADATION OCCURS AROUND PENTA-/HEXA-CHLOROBIPHENYL O DISAPPEARANCE OF ALL HOMOLOGS BELOW HEXA-CHLOROBIPHENYL OBSERVED O PENTA- AND HIGHER PCB DETERMINED BY SPECIFIC GLC/MS TEST METHOD PCB'S USED IN CAPACITORS PCB AROCLOR 1254 AROCLOR 1242 AROCLOR 1016 MAJOR USE PERIOD 1930-1952 1952-SEPT. 1971 OCT. 1971 l PCB (PENTACHLORO- AND HIGHER 77.0 9.0 1.1 i PCB (HEXACHLORO- AND HIGHER 29.0 1.0 0.1 HONS 0 4 3 1 2 1 ll CAPACITOR FLUIDS WHY CONVERT TO AROCLOR 1016 ? O 9-FOLD REDUCTION IN PCB'S OF PENTACHLORO- AND HIGHER O 10-FOLD REDUCTION IN PCB'S OF HEXACHLORO- AND HIGHER O MINIMUM INDUSTRY TESJING REQUIRED SNOW CAPACITOR FLUIDS WHAT IS THE EFFECT OF AROCLOR 1016 ? U.S. CAPACITOR FLUID SALES (1972):~20 M LBS. IF AROCLOR WAS Z PENTACHLORO- AND HIGHER PCBs WOULD BE* Z HEXA CHLORO- ' AND HIGHER PCBs WOULD BE* 1254 1242 1016 15.UOO.OOO pounds 1.800,000 220,000 5,800,000 pounds 200,000 20,000 HONS 0 4 3 1 2 3 THIS DOES NOT MEAN AMOUNTS OF PCB ENTERING THE ENVIRONMENT WHAT IS CAPACITOR FAILURE RATE ? r> INDUSTRY SOURCES CITE : 0.02-0.2Z per year HONS O4*3 1 2 '* 3 X o e u K> U> IF CAPACITOR FAILURE RATE IS 0.2% PER YEAR (WORST CASE) PCB ESCAPE TO THE ENVIRONMENT* IS -- ALL PCB HOMOLOGS PENTA CHL0R0- AND HIGHER HEXA CHLORO- AND HIGHER AROCLOR 1242 AO,000 pounds 3,600 400 AROCLOR 1016 40,0QO pounds 440 `ASSUMES U.S. FLUID SALES OF 20 M LB./YEAR PCB CHANGES IN , TRANSFORMER FLUID APPLICATIONS % o AROCLOR 1260 BEING PHASED-OUT NOW O INCINERATION OF SCRAP PCB'S - 1971 NOTE: ASKAREL (PCB) TRANSFORMERS ARE TIGHTLY SEALED UNITS HONS 0 4 3 1 2 6 WHAT IS FAILURE RATE IN LIQUID TRANSFORMERS ? INDUSTRY SOURCES CITE: UNDER 0.2Z PER YEAR* *ALL LIQUID TYPES - MINERAL OIL AND PCB. MONS 0 4 3 1 2 7 IF ASKAREL (PCB) TRANSFORMERS FAIL AT 0.2%/YEAR HOW MUCH PCB IS AFFECTED' .? ALL PCB HOMOLOGS 24,000 lbs. (ESTIMATED PCB TRANSFORMER FLUID SALES IN U.S. 12 M LBS./YEAR) < `WITH INCINERATION FACILITIES AVAILABLE. NOT ALL THESE AMOUNTS WILL ENTER ENVIRONMENT. . B7TErO SNOW MONSANTO'S PRESENT PROGRAM TO PREVENT ENVIRONMENTAL POLLUTION BY PCB'S O NO MORE SALES WORLD-WIDE EXCEPT APPROVED DIELECTRIC USERS ---------- -- '* O RESTRICT OVER 97Z CAPACITOR FLUID SALES TO AROCLOR 1016 ONLY O ELIMINATE AROCLOR 1260 FROM TRANSFORMER FLUIDS * O CONTINUE INCINERATION FACILITIES FOR SCRAP PCB'S O ENCOURAGE DIELECTRIC INDUSTRY THROUGH ANSI C-107 TO ENFORCE STRICT ENVIRONMENTAL CONTROL OVER PCB'S HONS 0 4 3 1 2 9 I i* v MOMS 043130 M 2 (NO. 5) INDUSTRY AND AGRICULTURE (DI-IK) 5-15-72 District* 1 - IV-Licenscd refinery crude and un- 2. The Foot! and Drug Administration proposed lln.n, T,bi'f, 1S1 b/d; licensed petrochemical crude on March 18 new regulations which inciudi.- new ami more ar.d unfinished ell*. 175,08* b/U; licensed finished petro stringent action levels for PCD's in food, stejw to prevent leum products, 312,nil b/d; licensed rcriduol fuel oil. rCU'a in food packaging, and measure* to prevent luntami- 1,955,943 b/J; exempt import* irom Canada. 7,91-1 b/d of nation of food from accidents in food plants. : TM linloliod petroleum products; and exempt import* Irom The Task Force report, entitled PCB's and die Mexico, 33, 2S3 h/d of unfinished oils. Environment,'' is die result of a su-month review by eight District V--Liccncd refinery crude and unfinished federal agencies. It Includes detailed information on the oils, 418,2i)y h?d; licensed petrochemical crude and un production, use, and distribution of PCB's. die benefits of finished oils, 20.242 b/d; licensed finished petroleum pro the chcmicols, the effects of PCD's on man and wildlife, and ducts, 23, 862 b/d; licensed residual fuel oil. 1,556 b/d; a variety of other data related to tlic problem. nd exempt Imports from Canada, 222,774 b/d of crude Despite finding "much data that It regards as In oil, unfinished oils and finished petroleum products. adequate and many questions that remairt unanswered. fberto' Rico--Licensed crude and unfinished oils, "the Task Force concluded, from all of the available 390,059 b/d; licensed finished petroleum products, 3,962 scientific information on the rCB problem that: b/d; snd licensed residual fuel oil. 4,768 b/d. L All uses of PCD's thnt are not essential should Shipments from Puerto Rico during December were; be discontinued, and to the extent that they must be used To Districts 1 - IV--lnflntshcu oils, IT.'2oi b/d; finished great care should be taken to prevent release of the sub petroleum products. 107,551 b/d; and residual fuel oil, 0 stances to the environment. b/d. 2. The chemicals can have serious adverse effects District V consists of Alaska, Arizona, California, on human health, but, so far as now known, these adverse . Hawaii, Nevada, Oregon and Washington. Districts 1 * IV effects will not occur as a result of the levels of PCB's are comprised of the remaining states. currently in the environment. 3. PCD's are highly persistent sad can be found in I -0- almost all parts of the environment. 4. High levels of PCB's have occurred In food as a i STANDARDS: USDA LOWERS GRADE REQUIREMENTS result ol accidental release of the substance. Steps taken TOR FLORIDA, IMPORTED SEEDLESS GRAPEFRUIT by FDA and the Department of Agriculture will minimise die occurrence of such accidents in dit future and avoid ' The Department of Agriculture has revieod grade the food and economic losses that have accompanied the requirements for Florida and imported seedless grapefruit. accidents. The minimum grade lor fresh shipments of seedless 5. The use of PCB's should not be banned entirely. ' grapefruit grown in the Interior District of Florida and If currently available substitutes were used In transformers marketed under a federal marketing agreement and order has been lowered to U.S. No. 1 Russet, effective May 12, 1972. For scccUesj grapefruit from the Indian River Dis and capacitors there would be a greatly Increased likelihood $of fire and explosion, resulting In deaths, injury, and damage to property. Furthermore, such use can be controlled so trict, the minimum grade will be lowered to U.S. No. 2 that it does not Insignificantly contribute to environmental Russet on May iv. me previous minimum grade require contamination. menta were U. S. No. 1 and Improved No. 2, respectively. 6. The major gap In die regulatory system to deal . Grade requirements for all Imports of seedless with PCff's is the absence of sny broad federal autltorlty to grapefruit will bo lowered to U.S. No. 2 Russet on May 19, restrict use or distribution, to control imports, and to so as to be comparable to the requirements for the Florida- collect information. The task force believea that such produced grapefruit. The current grade requirement for authority is needed. It would be provided by the Admini all such seedless grapefruit is Improved No. 2. The Agricultural Marketing Agreement Act requires that Im stration's Toxic Substances Control Act, now pending be fore congress. The Monsanto Company, the sole U.S. * ports of certain commodities, including grspefruit, muat producer of PCB'e, has reported voluntarily taking a number moot the same or comparable requirements as those im of actions, including discontinuing sales of PCD's for use in posed on domestic commodities regulated under a Federal paints, plasticizers, sealants* adhesives, and all other open- marketing order. No change is being made in the minimum sis* re aystem uses. 7. PCB's are widely manufactured In Japan, Italy, quirements ter Florida-produced seedless grapefruit os FranccrWest Germany, and Russia, and possibly in Brazil. Imported soedleas grapefruit. Presently, both Florida aad Argentina, India, and East Germany. Mirny electrical pro Imported soedleas grapefruit must be at least 3-7/16 Inches ducts Imported from those or other countries into die United in diameter. States may use PCD's. The Task Forca knows of no way to monitor this supply unless the Toxic Substance* Control Act or similar legislation is enacted. Until then, buyers of pro * ducts which may contain PCB's are cautioned that they should CHEMICALS: TASK FORCE FINDS rCD'S NO HAZARD question their overseas supplier* about the potential presence TETflEniTil. OUT RECOMMENDS USE RESTRICTIONS of PCD's and consider the substitution of suitable alternatives. As an additional measure, die United States iu* asked A Federal Government Task Force on the chemicals the Organisation for Rcooomic Cooperation and Development known as PCDs**polyi:hiorlnatcd biphenyls--over the week (OECD) through its environment committee to make a special end Issued a report recommending that all current uses of review of member states' national policies concerning PCD's the chcmteals. nmipt In electrical capacitors and trans and also to identify products moving in international trade formers. be discontinued! ~~ Afthc sonic limb, the Task Force concluded that current environmental levels don't constitute en imminent hasard to heaUh, but the effects of long-term exposure are largely unknown. In conjunction with the issuance of the report, the which contain PCD's. OECD, whose membership includes i ail major western lnduetralised states plus Japan and Australia, has been giving priority attention to tin: problem of PCD's over die past year. The 192-page report "PCD's sod the Environment" is available at $0 irom the National Technical Information ser I Covernmont announced several actions to deal with the PCD vice, Springfield, Virginia 22151, or die first floor oi die problem: commerce building, Washington. D. C. I. The Environmental Protection Agency will rc A strict tfe discharge of i'll industrial effluents ot PCD's from PCS users into water so thnt level* of PQI's in river* er iakn* do net exceed 0.hi ports ;xr billion. * A- / . PuMiahrd by THE UURKAU OF NATIONAL AFFAIHS. INC . WASHINGTON. D C- 20037 ,,0S 'u3` MOWS 04313i tl/iOIiSwiaO MONSANTO INDUSTRIAL CHEMICALS CO. flOO N. lindbefQh Boulevard Si louts. Missouri 63166 Plions OU) 8B4-IOOO May 19, 1972 Kestinghouce Electric Corp. P. 0. Box 341 Bloomington, Indiana t Gentlemen: Monsanto Company, through its operating unit Monsanto Industrial Chemicals Company (hereinafter "MONSANTO"), possesses certain proprietary and confidential information relating to dielectric fluids useful in electrical apparatus, particularly in electrical capacitors. MONSANTO understands that Westinghouse Electric Corp. (hereinafter "WESTINGHOUSE") is desirous of evaluating the per formance of certain of said dielectric fluids and MONSANTO is willing to make samples thereof available to WESTINGHOUSE under certain terms and conditions. . To enable WESTINGHOUSE to evaluate performance of the samples it may be necessary for MONSANTO to disclose to WESTINGHOUSE certain confidential information concerning the nature of the dielectric . fluids, their performance, test methods and the like. Furthermore, the furnishing of fluid samples to WESTINGHOUSE will provide WESTINGHOUSE with certain knowledge of the fluid characteristics. Ail such disclosure and knowledge received by WESTINGHOUSE is hereinafter referred to as "Dielectric Fluid Information." It is understood and agreed that WESTINGHOUSE will not, for a ' period of five (5) years following the date first set forth above, use (except in connection with evaluation of test samples of dielectric fluids) or disclose to others, unless specifically authorized by MONSANTO in writing. Dielectric Fluid Information obtained under this Agreement; provided, however, that WESTINGHOUSE shall not be subject to the restrictive obligations set forth herein with respect to Dielectric Fluid Information which (1) is known to WESTINGHOUSE at the time of its receipt from MONSANTO which can be established by documentary evidence, * unit of Monisnlo Compiny MOMS 043133 Kuscinghouse Electric Corp. -2- May 19, 1972 (2) is or through no fault or act of WESTINGIiOUSE becomes part of the public knowledge or literature, or . ' (3) lawfully becomes available to WESTINGHOUSE from a source other than MONSANTO without restriction on disclosure or use. Specific portions of Dielectric Fluid Information shall not be deemed to be in the prior possession 'of WESTINGHOUSE or in the public knowledge or literature merely because it is embraced by more general information in the prior possession of WESTINGHOUSE or in the public knowledge or literature. ' ' Xu is understood and agreed that WESTINGHOUSE will not analyze (or have analyzed) fluid samples furnished by MONSANTO. WESTINGHOUSE agrees to return all unused portions of the samples to MONSANTO upon completion of the evaluations. WESTINGHOUSE shall not transfer the samples to third parties within the term of this Agreement. If the foregoing terms and conditions meet with the understanding . and approval of WESTINGHOUSE, please show the acceptance and agree ment of WESTINGHOUSE by having an authorized representative of WESTINGHOUSE execute this letter in duplicate at the place indicated below. ' Very truly yours, MONSANTO COMPANY ACCEPTED AND AGREED TO: WESTINGHOUSE ELECTRIC CORP By ______ Titled Date ___ WHD-.map Director, Specialty products i^' MONS 043134