THE CHEMICAL WORLD THIS WEEK

we should be encouraging American businessmen to seize the opportunity of the times.,,

Accordingly, he called for passage of the resolutions that would urge the President to "fix a firm date" for terminating the investment control program.

The Commerce Department, on the other hand, is strongly opposed to the Tunney resolutions. In a letter to the House Foreign Affairs Committee, the department said that, although the controls may be eased soon, they will not be abolished until the "balance of payments circumstances permit/' Noting the Administration's opposi­tion to capital controls, James T. Lynn, the department's general counsel, said that the "unnecessary" resolutions "might create the impres­sion that capital controls will be terminated sooner than would be ad­visable."

Commerce believes that the "over­all balance of payments situation has not yet improved to the point where the mandatory investment control program can be immediately abol­ished." And, contrary to what Mr. Morton said, Mr. Lynn pointed out that the department does not feel that the program has hurt the U.S. balance of payments position in 1968, or that it will this year.

MCA's Gen. G. H. Decker, speaking for some 180 member firms, told the panel that continuing the mandatory controls will adversely affect the bal­ance of payments by limiting the potential earning capacity of foreign affiliates and by limiting expansion of the export market for chemicals. He said that because of the investment curbs, U.S. chemical firms are being forced to take certain unsound finan­cial actions. These include foreign borrowing at rates higher than in the U.S.

U.S. chemical companies have had to curtail overseas acquisition pro­grams as well as postpone exploration operations in certain countries because of the curbs, Gen. Decker pointed out.

Aside from this, he said, the ex­cessive costs and time—clerical, ac­counting, financial, and executive-required to meet the periodic report­ing that the controls require, "impose a heavy burden on corporate manage­ment and prevent prompt, flexible responses to opportunities in the mar­ket place."

In addition to the counterproduc­tive characteristics of the controls, Gen. Decker noted that insofar as direct investors bid for foreign bor­rowing these funds are no longer available to contribute to the U.S. balance of payments.

Φ • α

President Nixon To AID, or not to AID

FOREIGN AID: Nixon's Time of Decision President Nixon will soon have to de­cide what changes, if any, he wants to make in the U.S. foreign aid pro­gram to make it more reflective of his administration's philosophy, more efficient and effective, and more pal­atable to the Congressional holders of the purse strings. One thing is sure— the President will get plenty of advice from many quarters on what needs to be done. For example, last week the National Planning Association, a pri­vate group, issued a report on changes it considers to be badly needed. And a few days earlier the National Se­curity Council gave the President its appraisal of an interagency report on a revamped foreign aid program.

The NPA proposal is aimed at trans­forming the Agency for International Development from a large institution extensively engaged in overseas oper­ations into a much smaller organiza­tion primarily concerned with policy making and the allocation of funds, part of which would be administered by other agencies.

NPA would make these major changes:

• Eliminate direct U.S. participation in technical assistance by establish­ing an autonomous Technical Assist­ance and Development Research In­stitute. The institute would function primarily as a clearinghouse and fi­nancing agency; it would refer requests for technical services to appropriate institutions and individuals in the U.S. and would finance these projects when other funds were not available.

• Create a Private Enterprise De­velopment Corp., which, among other things, would take over current AID programs such as investment guaran­tees and investment survey programs.

• Transfer up to one third of U.S. development assistance funds to the World Bank group.

If President Nixon goes along with the NPA proposals, which is doubtful, Congress would probably go along with the first two, but any proposal to relieve Congress of detailed control of lending programs would probably be defeated.

The changes appraised by the Na­tional Security Council, and reportedly favored by the President, are relatively mild. No new agency would be created to handle foreign aid.

Development loan funds, the major part of AID's program, would con­tinue to be directed by AID. How­ever, a larger proportion of these loans may be channeled through multina­tional agencies. In addition, in a man­ner similar to one of NPA's sugges­tions, a new government-supported corporation would run the private overseas investment programs now handled by AID.

STRATEGIC STOCKPILE: U.S. Revises Objectives The Government 11 days ago revised its conventional war objectives for 18 of the 77-odd items in its $4.2 billion stockpile of strategic and critical ma­terials. For only four of the 18— rare-earth oxides, natural rubber, tin, and vanadium—are present govern­ment stocks below the new target level. One, corundum, now has been removed from the strategic and critical materials list. For two others, the new objectives are the same as the old. For 11 of the 18, the Government

U.S. lowers strategic

Material Cobalt (pounds) Corundum (short tons) Kyanite-mullite (short dry tons) Manganese, battery,

synthetic dioxide (short dry tons) Mica, muscovite splittings (pounds) Mica, phlogopite splittings (pounds) Quartz crystals (pounds) Quinine (ounces) Rare earths (short dry tons) Rubber, natural (long tons) Shellac (pounds) Talc (short tons) Tin (long tons) Thorium (short tons)

Vanadium (short tons)

Source: Office of Emergency Preparedness

12 C&EN APRIL 7, 1969

Nuclear blasting to get second gas well test Government and industry officials ink contract for Project Rulison, the second collaborate experiment on the use of nuclear explosions to spur natural gas production from " t ight" formations. Scheduled for late May, the experiment calls for detonating a 40-kiloton device 8400 feet under­ground in a natural gas formation near Rifle, Colo. It is aimed at sup­plementing the economic feasibility data obtained from Project Gasbuggy, the first joint government/industry gas stimulation experiment. Signing the agreement are, from left: Herbert E. Grier, president of CER Geo-nuclear Corp., Under Secretary of the Interior Russel E. Train, AEC Chair­man Glenn T. Seaborg, and C. Wardell Leisk, chairman of Austral Oil Co.

now says that it has more than it needs to ride out a conventional war.

The new objectives are the result of a continuing study of wartime indus­trial needs, explains George A. Lin­coln, director of the Office of Emer­gency Preparedness. His office de­termines the kinds and quantities of items the Government should stockpile for war emergencies. Within the next six months, he adds, the conventional war objective of all items now main­tained in the nation's hoard of strategic and critical materials will be reas­sessed. At that time, according to an­other OEP source, the office will turn its energies to a similar study of nuclear war stockpile objectives.

Natural rubber shapes up as the touchiest item among the 18. Since Feb. 20, when the General Services Administration announced that it had been directed by OEP to halt im­mediately all use of government-held natural rubber in U.S. aid programs, the product's price has climbed stead­ily on the international market ap­parently in anticipation of new gov­ernment purchasing. But OEP di­rector Lincoln says that he does not regard the 15,000-ton shortage (be­tween the new 385,000-long-ton con­ventional war stockpile objective and the 370,000 long tons which the Gov­ernment now has on hand) "suf­ficiently critical to purchase new quan­tities at this time."

Mr. Lincoln says he will authorize GSA to seek Congressional approval to dispose of material found to be in excess of stockpile objectives.

need for 12 items

objective 42,000,000

2,500

4,800

6,700

22,200,000

1,300,000

650,000

4,130,000

3,000

130,000 8,300,000

200

200,000

250

1,500

objective 38,200,000

Removed from

4,800

1,900

19,000,000

950,000

320,000

3,600,000

6,500

385,000 1,000,000

200

232,000

40

2,100

FUELS:

Gasoline from Coal Somewhere in the coal fields of Ap-palachia, on a reasonably level plot of land where the soil has good bearing quality, where winter is only mod­erately severe and transportation by highway, rail, and waterway is avail­able, and where—most importantly— coal is in bountiful supply, a gasoline-from-coal plant has been designed, built, operated, and maintained hypo-thetically. Data on this still paper-bound operation are contained in the Office of Coal Research's interim re­port on Project Gasoline, prepared by Ralph M. Parsons Co., Los Angeles, Calif. [The production of gasoline, synthetic crude, and chemicals from coal are three related, but separate, OCR projects (C&EN, Jan. 6, 1969, page 40; June 12, 1967, page 96).]

The report is a followup to Parsons' feasibility study published in Septem­ber 1962 which was based on a con­fidentiality agreement with Consolid­ation Coal Co. and Standard Oil (Ohio). The present report contains process details not revealed before.

To fully appreciate the report, it might well be better to read it from back to front. About half its total consists of a voluminous and detailed appendix which contains material balances and flow diagrams (complete with equipment sizings) for each of

the process's sections. These sections include coal pretreatment; extraction; cyclone separation; carbonization; hy­droconversion; catalyst regeneration; hydrotreating and hydrocracking; and catalytic reforming.

Further forward in the body of the report the limitations of this hand­iwork are set forth. "This design," the report says, "is conceptual and no pretense is made that all of the prob­lems are solved or even recognized." The report goes on to note that design work was done, "mostly by short-cut methods" though inaccurate equip­ment sizing that has resulted should not substantially affect the cost of the plant. It then lists areas where ad­ditional work is needed to push toward an optimal design; these areas include many of the process's basic opera­tions.

Based on scaleup of laboratory and small pilot-plant data, the report says, a commercial plant can turn out 48,-026 barrels per day of gasoline using a charge of 20,522 tons of coal. Es­timated plant costs are about $244.5 million, excluding land, catalysts, royalties, and working capital. To return a 6.4% after-tax profit on in­vestment, gasoline from the plant would have to sell at about 15.5 cents per gallon at the plant delivery rack, a price at which, the report admits, "the economic feasibility of the project continues to be marginal."

APRIL 7, 1969 C&EN 13