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I recently visited the town where I grew up, Fredericksburg, Virginia.  There is not much chemical history in this town that bills itself as America's most historic city.  In colonial time, alum was mined, really more harvested, in the area.  In my youth, there was a viscose plant on the banks of the Rappahannock River, almost across the river from where a young George Washington cut down a cherry tree.  Its stacks dominated the skyline and its odors reminded all of its presence.

 

The town plays off its history, multiple Civil War battles, many colonial era events involving the founding fathers and, somewhat surprisingly given the intensity of the battles that occurred, many buildings more than a century old.  Shops in the old downtown sell history.  Civil war bullets and belt buckles are displayed.  Mixed in among the colonial and Civil War items is the occasional item from the Richmond, Fredericksburg and Potomac (RF&P) Railroad: pictures, tools, or lamps showing the logo of the railroad that once connected the north and south.  The RF&P became a fallen flag in 1991.  Fallen flag is the term of art for a railroad company that no longer exists.  The Baltimore and Ohio, the Pennsylvania Railroad, the Reading Line, the Illinois Central, the Erie Lackawana, and many others now qualify as fallen flags. Most, like the RF&P, are still loved.  Shows devoted to collectors of railroad memorabilia occur regularly.  Model railroaders go to great pains to reproduce the look of the historic lines.  There are clubs devoted to keeping the memories alive.  People still feel love for these industrial companies.

 

I feel nostalgia for the RF&P, but I dont fully understand it. I lived very close to the main RF&P tracks during my college years.  Little more than the width of a street separated my window from the tracks.  The train disrupted life when it rumbled through town, stopping traffic, shaking buildings and stopping all conversation. Car encounters were not uncommon and never ended well for the car.  Yet, like many others, I fondly recall the trains and wax nostalgic for the blue and gray of the RF&P.

 

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Of the top 50 U.S. chemical companies of 1991, the year the RF&P ceased to exist, there are more companies that no longer exist than operating chemical companies today.  There is no term of art for the chemical companies that have faded away.  It is not just that there is nothing as poetic as fallen flags, there is no term.  If there are clubs keeping the memory of departed chemical companies alive, I couldnt find any.  There is the Chemical Heritage Foundation, of course, preserving the industry, but I couldnt find any swap meets devoted to the chemical industry.  I did find a few industry trinkets on Ebay, but it is a much more thinly traded market than railroads.    There are no exchanges where memorabilia and collectibles are traded, no clothing for sale bearing the logos.  Chemical companies just dont get the love that other industries, like railroads, get.

 

Returning for a moment to Fredericksburg, in the 1930's, the community welcomed the Sylvania Industrial Company.  Sylvania was a viscose processing plant making both cellophane and rayon.  The plant was sold to American Viscose and, ultimately, to FMC.  It was the FMC plant that closed in the 1970s.  The Fredericksburg of my youth had the large smokestack as a part of the skyline.  The sulfur smell from the plant was, depending on wind direction, a reminder that the plant was there.  The plant was a major employer in the area for nearly 50 years.  The area overlooking the plant is still referred to as Sylvania Heights, one of the last remaining references to the plants existence. I have never seen memorabilia from the plant for sale with the other relics of bygone Fredericksburg.  I cant find any club that is keeping the memory alive.  My recollection is that the community actually welcomed the closing as a sign of progress.

 

I have spent my career in the chemical industry. I don't recall a single time during my 25 years where I felt the industry being loved.  Soft drinks are mentioned as a cause of obesity and health issues, but society loves them. Even oil companies seem to have loyal fans. Chemical companies provide many things that make life considerably better.  Is your water safe to drink? Better thank the chemical industry.  Do you have food to eat?  Chemical industry, too.  Fertilizer, crop protection and packaging are all products of the chemical industry.  Did you take anything the last time you felt ill?  It was made through chemistry.  The list is near endless.  The American Chemistry Council brags that greater than 96% of the products we touch on a daily basis are enabled by the chemical industry.  Yet, we get no love.

 

I am resolved to the reality that the logo-bearing items I have collected over my career will never provide a windfall for me or my heirs.  I am not yet resolved that we can't change public perception.  We are facing daunting societal issues and the solutions require chemistry.  We simply have to do a better job of describing the benefits created by chemists, chemical engineers and the chemical industry.  Society loves our products and the advantages they bring.  It is a shame that love doesnt extend to the companies making them possible.

 

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Mark Jones is Executive External Strategy and Communications Fellow at Dow Chemical since September 2011. He spent most of his career developing catalytic processes after joining Dow in 1990. He received his Ph.D. in Physical Chemistry at the University of Colorado-Boulder doing research unlikely to lead to an industrial career and totally unrelated to his current responsibilities.

At the ACS meeting in Boston, I was honored to be asked to speak at a symposium commemorating the 100th anniversary of the birth of Dr. Henry A. Hill.  In 1977, Dr. Hill was the first African-American ACS President. He was elected to that office after a long career in ACS as an activist for professionalism within the chemistry industry.

 

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During his time in ACS Governance, The Chemical Professional’s Code of Conduct and the Guidelines for Employers were created.  The Guidelines specified ACS-approved ways for a company to treat its chemical professionals, including at the time they might be laid off. It was a controversial document to be sure.  Perhaps the Code of Conduct was a bit less controversial because it included “rules of the road” for both professionals and the companies they worked for.

 

To prepare for the talk, I read articles from C&EN from the early- and mid-1970s, and I was struck by how much has changed in the world and yet how similar the issues were for ACS then and now.  In his 1975 election statement, he wrote:

 

Chemists' salaries have not been keeping up with inflation.  Part of the reason for this is that there are too few jobs in chemistry in spite of the press of problems—in energy, in the environment, in materials—that need solving.  We must try to interact more effectively with Congress and the Administration to support studies which will solve these problems—not simply as a means of putting chemists to work, but as sound national policy.

 

Related to this is the problem of supply. Although we must not bar the door to bright, eager, young people, we must see to it that the quality of our graduates is improved and means for upgrading the excellence of the entire chemical community is achieved.

 

I was in grad school in 1975.  I remember the period of October 1973 to mid-1975 as economically dismal, what with wage and price controls, oil embargoes, gas lines and “stagflation.”  Another undercurrent for those of us in the sciences was the bursting of the Sputnik bubble.

 

In 1958, policy-makers were concerned that the Russians would own space, particularly for military advantage.  To catch up, the US invested heavily in educating new scientists.  I’ve heard many people refer to those as the golden years because there was so much interest in and money for science.  But that started changing in the late 1960s, and after about 1973, we got tired of going to the moon.  We cut our investment, and there was this glut of scientists.  Add to that the changing nature of the chemical industry, and all of a sudden there was an employment crisis.  Dr. Hill himself talked about launching a study in the late 1960s to understand “mass layoffs.”

 

In April, 1975, the ACS Council approved the Professional Enhancement Program.  This was a direct response to the employment situation, and included such things as increased assistance to members seeking employment or reemployment, including development of ACS employment counseling and clearinghouse programs, and increased support for chemists and chemical engineers in their relations with their employers.  It set out to define the causes of major layoffs and develop manpower supply and demand projections to help protect the profession from a recurrence of the present unemployment situation.

 

I found it interesting that this work continues today through the efforts of the Committee on Economic and Professional Affairs, the ACS Career Navigator programs, and various Presidential task forces.

 

When Dr. Hill was elected, C&EN wrote:

 

Hill has been an ACS member for 34 years. He has been particularly active on the national scene in recent years, responding to what he describes as his ‘timely exposure to the problems of the chemical professional in the 1960's when, for the first time, we had more chemists than we had jobs for them.’ (emphasis mine)

 

I was shocked to read those words.  Our predecessors—even before the dismal economic days of the ‘70s--had many of the same concerns with respect to employment and the balance between supply and demand as some of our colleagues express today.  In many ways, today’s situation is more difficult and complicated.  The enterprise is profoundly global, and it was not in 1975.  The business that employs so many chemists—big pharma—struggles to find its place in the context of 2015.

 

And even more startling: we’re graduating about twice as many bachelors and 50% more PhDs today than we were then.  Yet the overall unemployment rate is relatively low, even if it’s higher for new graduates.

 

So here’s a hypothesis: maybe then and now are not so different.  Maybe for some reason we virtually always have too many chemists and too few jobs…or if not always, maybe most of the time.

 

So if that hypothesis is plausible, what do we do about the situation, individually and collectively? If chemists are in oversupply, our first thought is to encourage industry to hire more of us.  But realistically, that only works for them if they can make more money by doing so.  That’s harsh, but it’s the nature of the enterprise.

 

I believe that each of us is a single-proprietor business—even if we work at a corporation or a university.  If we take that point of view and constantly work to improve our capabilities we have a greater chance of avoiding the tragedy of an atrophied career and a layoff because the enterprise changed and we didn’t realize it was happening.

 

Employers have a responsibility to us as employees, but our responsibility to ourselves is an order of magnitude greater.  That’s what it means to me to be a professional: to make a career a continuous series of learning experiences; adding to our toolkits; making ourselves better and more valuable in a competitive market.  ACS’ responsibility in exchange for your dues is to do what it can to enable you.  I think Dr. Hill might agree.

 

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Dr. William F. Carroll, Jr. holds a Ph.D. in Organic Chemistry from Indiana University, Bloomington, IN.   He received an M.S. from Tulane University in New Orleans, and a B.A. in chemistry and physics from DePauw University in Greencastle, IN. He holds two patents, and has over sixty-five publications in the fields of organic electrochemistry, polymer chemistry, combustion chemistry, incineration and plastics recycling.

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China’s economic slowdown has been having a major impact on oil and commodity prices over the past year.  As a result, oil prices are returning to historical levels (around $30/barrel), as the chart shows.

 

China’s $15 trillion stimulus program had been one of the main reasons for oil prices returning to the $100/barrel level after the financial crisis of 2008.  It fed the illusion that the country had suddenly become middle-class overnight, with US standards of living.  Essentially, it created what one might call “subprime on steroids” in China’s property sector, causing average home prices in the Tier 1 cities to reach 14 times regular earnings.  This was around double the peak of the US subprime bubble. 

 

The parallels don’t stop there.  As in the US, many Chinese spent some of their windfall gains on buying a new car, which caused auto sales to surge 50% in 2009 and by a third in 2010.  As a result, China’s imports of commodities such as oil, copper, iron ore and even polymers soared.  But it was all just a bubble.  Average Chinese income levels simply couldn’t support  this level of demand once new President Xi began to turn off the lending tap after taking office in March 2013.  Even in the affluent urban areas, incomes are only around $4000/year, and just $1500/year in the rural areas.

 

Slowly but surely, reality is now bursting the commodities’ bubble, just as it has been bursting China’s stock market bubble over the summer. As a result, a vast and growing over-supply now exists of most commodities.  Oil prices have already halved over the past year and they probably have further to fall, as supply continues to expand at “breakneck speed” according to the International Energy Agency.  Oil production is still profitable for US producers at today’s prices – for example, ExxonMobil’s average US cost last year was just $12.72/barrel.  Plus, of course, Iran is about to return to the market as a major seller, now that the nuclear agreement has been finalized.  And this at a time when oil inventories are already at record levels all around the world, including in the US. 

 

This return to historical levels is very bad news for the US petrochemical industry, which is currently planning to spend around $145 billion on export-focused investment.  The reason is that most of this new capacity was based on the assumption that oil would always stay at the $100/barrel level, giving US shale gas-based producers a major cost advantage versus most foreign competitors.  Oil has a higher energy value than gas, and has historically traded at around 10 times natural gas prices.  So $30/barrel oil would completely erode the shale gas advantage, assuming gas prices remain around $3/MMBtu. 

 

Clearly, companies will now have to re-examine the economics of all these projects in the light of China’s economic  slowdown and the oil price collapse.  This will inevitably be a very painful process, particularly where construction has already begun.  But in this case, it will be the lesser of two evils.  The alternative, having to operate loss-making plants for years to come, would be too awful to contemplate. 

 

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Paul Hodges is chairman of International eChem (www.iec.eu.com), trusted advisers to the chemical industry and its investment community. He is a member of the World Economic Forum’s Industrial Council on chemicals, advanced materials and biotechnology, and presents the ACS ‘Chemistry & the Economy’ webinars.