Document O3g0wn1YjrQzGm7d09wj2RD7j

-.Q 5t;* Lcuid >% r.ics3'jri y April 13, ;; vsjiyi C3&&&3B risesoeri *?crsr-eca C'Ksaloal , .,, *1* Ti, Claris Xk \ ^* * I I } ! i Evasion opor&tioau Prco other so^resa ao ao that they twra tcca fortes to suspiencat uith parchaa&i tsatCi'ial to sscot thols* pcex^iuxats to Csa-y Cbesicala*. . Ssvovsr.theS1 mxt still fca?I&3 plenty of trouble ulth t? e-ir aractylom fearsord. Jew 1Ctn*a e-wctlsg to ^holhy ha visited the ship cbasfKKfl piystv --.hoot ten cays e<p srsot Volco:^ to td*s coot t:-cy lied isoejKi to rwa tialf of ttm burner "eilo c-lv rains tho holsnee Sn rder to I&k cofr-e *.* *"V - all tfcret-- irr they have beer. \3csicoafaI Present o& Is to run las v.hoio plant for 'five to tlx dv-TS^- ' ---* s&ei desa saa clean cest 33t. t ^W?-T/,//-V-*> ' ' ` > `. ' jtei-naa J* les&s .. \ CBY 1023692 J5 RSV0031848 Texas City, Texas April 19, 1963 W. . Alexander W. J. Burkett L. B. Bullock L. A. Schroeder - Spfld. Eng. Central Files C. I-- Knowles, Jr. St. Louis Chet, I am not a VCM expert, and in the time you have allotted or your answers 1 will not be able to become one. Adding to my problem, Burnie Bullock, who ie an expert, is off on a Japan tour. However, before he went I did check the following answers to your questions of April IS and believe I have correctly understood Bernie. You ask how much new capital was needed to expand VCM production to 170 M lbs/yr. No new manufacturing capital is needed - that is the plant as it stands, assuming adequate acetylene, can make approximately 175 M pounds in our estimate. You recognise that proportionately more utilities are con sumed, and whether these require new capital or not depends upon the timing and operating rates in other parts of the plant. I do not have firm estimates of manufacturing costs of the expanded rate. However, the drop in cost should be about 2/10 cents/lb of VCM. You asked about the relative merits of expanding via ethylene versos acetylene. Many studies have been made on this subject in the past and undoubtedly more will be needed throughout the future years. Generally these studies have inclined toward usage of acetylene as being more economical for us. You recognise that the attractiveness of incremental acetylene versus incremental ethylene has influenced the studies iu this fashion In the past. My own estimate Is that ethylene-based VCM will tend to prove more attractive in the future than it has in past studies, as improved oxidative performance, {which I antici pate) is realized, and as better estimates of costs of ethylene at Chocolate Bayou become available. 1 regret not being able to state a position any.'firmer than this. The newest plants (Teoneco and Monochem) are both on acetylene, you will note. I doubt they are finding acetylene as cheap as anticipated when they made their choice. You asked for our judgment on how Monsanto's VCM process compared with Dow or Ethyl. As you perhaps remember, we sold Ethyl the process they practice, an ethylene-chlorine route with by-product HC1 utilised in tetraethyl lead operations. Accordingly, Ethyl's process is identical with our's, and any CBY 1020270 RSV0031849 C. L. Knowles, Jr.' - April 19, 1963 - page 2 differences in economics would depend on ethylene and HC1 Values. I doubt that Ethyl can buy ethylene as cheaply as we know we will have it. They do probably value HC1 higher than we, as it permitted them to shut down some expensive HC1-generating furnaces. We made a study on Monsanto versus Ethyl in I960, which 1 have not had time to update. Broadly it appeared that. If Ethyl could value HC1 at chlorine value, we must value acetylene at 6 lb to reallae an equal return. Dow's technology also should he quite similar to ours. We strongly suspect they practice oxidative chlorination in Louisiana. They probably do not practice it in Teas, as they merchant the HC1 to Tenneco for their Houston vinyl chloride operation. Of course, Dow is basic in chlorine: X learned that Shawinigan Chemicals will be phased out of the vinyl acetate supply to Shawinigan Resins over the neat two years. It was correct that our appropriation request on vinyl acetate predicted a sellout by 1965 when supplying only half of Shawinigan Resins' business. Accordingly, the vinyl chloride inpact cm vinyl acetate should be negligible. As you know, part of the capital you received on vinyl acetate is for ethylene used to supply-.the acetic. This too is forecasted to be consumed by 1965. Accordingly, 1 suggest we drop vinyl acetate from this study to simplify an already complex picture. I questioned Lou Schrooder on your approach into the plasticiser operations. As no buying was involved, his inclination was to omit consideration of this end. If Plastics stop consuming the plasticisers, it seems reasonable to believe that Organic# Division will be quite affected. Feedstocks to plastici sers include naphthalene and xylene from Chocolate Bayou, another segment of capital we had not discussed. Chet, I am not trying to make the problem more complicated than it is - I just think it is more complicated than can be properly answered by April 23. We will be back in business on April 23 should you have more questions. Note your carbonees were not covered. /mj R. W. Klenker CBY 1020271 RSV0031850