Houston, We’ve Got Good Chemistry

By Randy E. Velarde (Published in the Volume 4, Number 1 2001 Issue of Energy Houston)

Did you brush your teeth with clean water this morning? Drive a car to work? Check your e-mail when you got there? If you did any of these things — or many more, from taking an aspirin to watching a movie to placing a cell phone call — here’s a fact you should know: Good chemistry makes them possible — and a lot of that chemistry is being discovered and produced right here in Houston, the petrochemical capital of the world.

With 368 chemical plants and an aggregate employment exceeding 37,600, the economic impact of the chemical industry on the Houston area is staggering. The Houston-Gulf Coast region has nearly 49 percent of the nation’s base petrochemical capacity – more than quadruple that of its nearest U.S. competitor.

Base petrochemicals are the raw materials for producing many plastics and resins, and Houston dominates U.S. production of two major resins used in the manufacturing of plastics, with 32.6% of the nation’s capacity for polyethylene and 63.0% of its capacity for polypropylene. As a result, in 1998, 1,566,689 tons of primary plastics valued at $1.48 billion were exported through the Port of Houston.

Houston’s production abilities also include 35.7% of the U.S. capacity for benzene (700 million pounds per year), 56.1% of the U.S. capacity for butadiene (2.4 billion pounds per year), 52.6% of the U.S. capacity for ethylene (27.6 billion pounds per year), 62.8% of the U.S. capacity for polymer grade propylene (10.9 billion pounds per year), 25.3% of the U.S. capacity for toluene (400 million pounds per year), and 37.6% of the U.S. capacity for xylenes (4.9 billion pounds per year).

But recent research shows that most people don’t associate chemistry with the more than 70,000 daily products it makes possible. According to a recent poll, many people believe chemistry is responsible for making good products, but few can name what they are. Even here in Houston, where companies like Atofina, Dow and Shell Chemical are on the cutting edge of innovation and corporate responsibility, most people don’t know about the link between chemistry and the products they take for granted.

That in itself may be a sign of just how important good chemistry is: It’s so woven into the fabric of our daily lives that we often don’t notice it’s there. But without chemistry, many of the products we take for granted wouldn’t be possible.

The $419 billion business of chemistry (a.k.a. the chemical industry) is one of the oldest US industries. It is a dynamic, forward-looking high-tech industry, a keystone of the “new economy” and a leader in protecting the environment. It is also an enabling and transforming business and an essential contributor to our standard of living. The many benefits arising from chemistry and its products greatly enhance our quality of life. Included in the more than 70,000 products of the chemical industry that enable rising US productivity and living standards are synthetic fibers and permanent-press clothing, life-saving medicines, health improvement products, technology-enhanced agricultural products, improved foods, more protective packaging materials, longer-lasting paints, stronger adhesives, faster microprocessors, more durable and safer tires, lightweight automobile parts, and stronger composite materials in aircraft and spacecraft. In fact, innovations in chemistry helped put a man on the moon.

Two everyday products transformed by chemistry include microprocessors and automobiles. It is silicon chemistry and high-performance polymers that make the microprocessor possible. Every automobile contains nearly $2,000 worth of chemical processing and products. From the polyurethane seat cushions and neoprene hoses and belts to air-bags, brake fluids, rust proofing and nylon seat belts, the performance, safety and fuel efficiency depend upon thousands of products of chemistry.

Composition of the business of chemistry has been changing as companies evolve to a more knowledge-intensive focus in life sciences and other high value-added businesses such as biotechnology, high-performance polymers and elastomers, new fibers, and other advanced materials that have applications in other industries. Companies operating in basic chemicals and specialty (or performance) chemicals are also evolving to a more knowledge-intensive focus. This knowledge and innovation will increasingly embrace new products, processes, services, and means of serving customers. The business of chemistry in the US is segmented (with revenues) as follows:

  • Basic Industrial Chemicals – $163 billion
  • Fertilizers – $14 billion
  • Specialty Chemicals – $96 billion
  • Life Sciences – $100 billion
  • Consumer Products – $46 billion
  • Total – $419 billion

With numbers like that, the chemical industry is the largest exporting sector in the United States. In 1998, US chemical exports totaled over $68 billion — larger than either agriculture or aircraft/aerospace. More than 10 cents out of every dollar of exports are chemicals and related products. Balanced against imports of nearly $55 billion, this provided a 1998 trade surplus of over $13 billion, continuing a more than 70-year uninterrupted history of trade surpluses. Indeed, during the 10 years ending in 1998, the industry rang up trade surpluses totaling $169 billion.

The US chemical industry is the world’s largest single national chemical industry, accounting for over 27% of the $1.53 trillion in world sales of chemicals. Moreover, the business of chemistry in North America (US, Canada and Mexico) is larger than that of Asia/Pacific and as large as Western Europe, which includes over 20 national chemical industries. World output of chemicals is valued as follows:

  • United States – $419 billion
  • Canada – $21 billion
  • Mexico – $15 billion
  • Other Latin America — $92 billion
  • Western Europe — $455 billion
  • Central/Eastern Europe — $51 billion
  • Africa — $31 billion
  • Mideast — $27 billion
  • Asia/Pacific — $422 billion
  • Total — $1,533 billion

Americans employed in the business of chemistry are among the most productive in the world. The increasingly complex nature of the business of chemistry requires new and more highly developed skills, and better-trained and educated workers. The need for more high-technology skills, as well as increased productivity has resulted in wages that are, on average, 31% greater than those paid by manufacturing as a whole. The over one million employees of the business of chemistry can be found in all 50 states and the District of Columbia.

Investing over $26 billion dollars annually in research and development (R&D), US companies engaged in the business of chemistry have remained internationally competitive, constantly creating new products and processes to solve performance, safety, environmental and efficiency problems in a number of industries and arenas. My company, The Plaza Group, services the chemical industry, providing outsourced marketing services that allow producers to focus on core business activities like safer, more efficient production methods and R&D. Employing over 95,000 R&D scientists, engineers, and technicians, US companies involved in the business of chemistry account for one out of every seven patents that are issued. Their efforts create daily miracles. It’s these everyday miracles we should remember next time we hear a negative report on the chemical industry’s impact on the environment. In fact, many of the products of chemistry themselves are used directly to improve the environment, protect health, or provide safety. For example, activated carbon is used to filter water and clean air while medicines derived from chemistry conquer disease, and polycarbonate resins are used in worker safety goggles. Many other products of chemistry indirectly contribute to protecting the environment. Plastics in automobiles, for example, not only provide cost-effective and stylish design solutions, but also reduce weight and boost fuel efficiency, thus causing less fuel to be burned and lower emissions. The results of the industry’s commitment have paid off. Since 1988,

  • Industry emissions are down 60%
  • The incidence of illness and injury is down 31%
  • While industry output volume was up 30%

Today, as you go about that business we call life, take a moment to think about all the positive ways our city’s good chemistry impacts your life and the lives of millions of people across the globe.

Leave a Reply

Your email address will not be published. Required fields are marked *