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July 31, 2006

Is the US headed for bankruptcy?

BUD CONRAD, THE DAILY RECKONING, JULY 21, 2006

Recently I had the pleasure of having lunch with the Comptroller General of the United States, David M. Walker. He heads up the US Government Accountability Office (GAO), the government’s internal watchdog. As he was about to give a talk on out-of-control government deficits, he had in his briefcase a chart on the size of the US government’s obligations over time. Our discussion about those obligations over lunch was followed by an email exchange, and Walker kindly helped me source additional GAO data, all of which allowed me to confirm my analysis of the budget with projections from the Congressional Budget Office (CBO).

I have also met with Douglas Holtz-Eakin, head of CBO, who can competently recite the situation of six different budget projections without notes. The combined scenarios of the GAO and CBO provided me with the basis to create the following projection of the US budget – as shown in the chart below:

A clear picture emerges of a government completely out of control. The blue line is the history of the US Federal Government debt. The green line shows the path we are now on, with debt soaring to impossible levels against projected GDP. Importantly, the source isn’t some crazy hand-waving blogger: these are the US government’s own projections—and we all know they have every incentive to accent the positive. If this is the best they can do at this point, then you know things are not just bad, they are calamitous.

This glimpse at the future clearly shows that the debt of the US will, in the foreseeable future, go from being a troubling yet manageable fraction of the economy to being several times the size of economy. That can’t happen without serious repercussions.

US debt: the consequences

The US government will be spending money they don’t have, which means creating more of it out of thin air and diluting the value of all the dollars that came before. It doesn’t take a Harvard MBA to know that the kind of deficits projected above guarantee a persistently weak dollar, higher inflation and higher interest rates going forward.

You may be right to criticise this analysis as only one of many scenarios being developed all the time and that there are other assumptions that lead to other estimates, and you would be right.

But I’ve looked at the assumptions, as has David Walker, and it is more likely that the assumptions have underestimated how serious the situation could become, maybe by a significant margin. For example, in the projections above, the interest rate paid by the US government stays flat. Interest rates fell for 23 years and have only just recently bounced off of 45-year lows.

The odds of interest rates staying at these low levels for decades into the future are, in my opinion, nil. I have analysed the scenario of the impact of higher interest rates. The problem can get out of hand because it feeds on itself: higher interest rates lead to higher interest on debt, which leads to higher debt, which leads to greater loss in confidence in the dollar, which leads to higher interest rates...and the loop makes itself worse.

US debt: who is to blame?

Who is responsible for this sin of profligate spending? You could start by pointing a finger at the House of Representatives as they are constitutionally charged with holding the purse strings of the US government. They voted for the spending and programs we are now saddled with, they pass tax programs, and vote in the big supplemental bills that fund the wars.

Entrusted with allocating the biggest sums of funding in the world, they clamour for more and, in the process, act like termites chewing away at the fiscal underpinnings of the economy, assuring the future bankruptcy of the nation. And it is not just the modern politicos that are responsible, but a failure to pursue sound monetary policies that extends back decades. Why do they do it? That answer is easy and reflective of human nature... they do it to curry favour with their constituents in order to get re-elected.

Which further points the finger at the American public, who instead of voting the bums out for wasting their money and handing a legacy of debt to their grandchildren’s grandchildren, happily pocket the pork belly doled out and reward the most prolific spenders with their votes.

The bottom line is that debt and deficits are baked into the cake, exacerbated by the demographics of retiring baby boomers and a government that not only shows no intention of slowing its spending, but quite the opposite. In fact, like a penniless smoker breaking a child’s piggy bank to buy a pack, the debt-addicted government has already spent the supposed "Trust Funds" of Social Security and Medicare.

US debt: government close to bankruptcy>

The US government is closer to bankruptcy than anyone who has not studied the situation can guess. You will hear government apologists claim that the government can’t go bankrupt because they are the government, and along with a complicit Federal Reserve, they can meet any debt obligation because they have the printing press. That is precisely the problem. They can print any amount of money they want. That has been theoretically possible since we went off the gold standard in 1971.

It is this loss of any constraint on US government spending that has let the genie out of the bottle. The track is now laid. The long-term future of the dollar is not in question. And to the extent that it is the basis of all other currencies, the reserve currency of the world’s central banks, all currencies are doomed.

Gold and the quality companies that produce or competently explore for it should no longer be viewed as entertaining speculations, but as portfolio requisites.

By Bud Conrad for The Daily Reckoning. You can read more from Bud and many others at www.dailyreckoning.co.uk

Bud Conrad holds a Bachelor of Engineering degree from Yale and an MBA from Harvard. He has held positions with IBM, CDC, Amdahl, and Tandem.
Currently, he serves as a local board member of the National Association of Business Economics and teaches graduate courses in investing at Golden Gate University. Mr Conrad, a futures investor for 25 years and a full- time investor for a decade, is also a regular lecturer for American Association of Individual Investors. As a senior researcher for Casey Research, LLC., he produces original research and analysis for the International Speculator.

For more information about Casey Research, click here: http://www.caseyresearch.com/

AND MORE FROM "THE DAILY RECKONING"

BILL BONNER, THE DAILY RECKONING, JULY 28, 2006

The American lifestyle and the concept of Empire...Americans dont like to think of our country as an Empire. Instead, they imagine it as a kind of proto-democracy...

"Vancouver is a great city, largely because it has so few native-born Canadians in it."

We were sitting in a Japanese restaurant named Tojo’s overlooking the city, when we made this observation. The sky was so clear you could almost read the license tag numbers on cars driving up the distant mountains. Then, as the sun went down, the whole city sparkled with lights, like Hong Kong.

And the fireworks began. Rockets, booms, shimmers...

We wondered what the occasion for the bash was.

"Nor-ing spe-al," said our charming waitress. Dressed in traditional Japanese dress, she could have been an extra from a WWII movie.

Our cab driver was from India, the staff all Japanese. They were operating an expensive samurai sushi restaurant with a large outside terrace.

"Excuse me," said another friend to a waiter. "I ordered yellow tuna."

"Dis, yella tuna," replied the samurai.

"No, it’s bluefin," our friend persisted.

"Bluefin...yella..mix togerer. Good. You eat."

Doug and your author, both products of the Irish diaspora, were surrounded by foreigners. One of our dinner companions was from Italy. Another was from Pakistan. The busboy was from Sri Lanka.

"Yes, this is a great city, I’m moving back here," Doug announced. "Not to stay here all year. I like Asia too much for that. But this is almost like being in Asia, and with snow-capped mountains all around you.

"You know, we’re so lucky. We can live anywhere we want. I feel sorry for the average guy in America. He’s stuck. Like you, the older I get, the less I know for sure, but it certainly looks to me as though we’re in the early years of a great bull market in commodities. And that will be just fine with me. But then, I don’t live out in the suburbs and drive a huge land-barge fifty miles to work every day and I don’t have a mortgage being adjusted upwards."

America of the land-barges is the place where, in theory, every man is created equal. But each equal man is dealt an unequal hand at birth. He plays it the best he can. For the last two centuries, Americans have picked up their cards and found aces high. By 1900, they had the largest economy in the world. They were on the winning side in the two biggest wars in history – without suffering a single casualty on their own soil. And they walked away from each conflict with a bigger slice of world commerce.

Still, all institutions age and decay. In the 1950s, the US was already on top of the world. By the late '80s, its only military competition had thrown in the towel. But the starch of the early 1900s was slowly replaced by the elastic of the late 1900s. Everything began to stretch and bulge – the constitution, the dollar, public and private finances; everything from the behaviour of teenagers to the girth of their parents.

And then the deck was shuffled and the cards dealt out again. They don’t realize it yet, but it looks as though this time around, Americans will be on the losing side of history.

"The whole world can’t live at the standard that we Americans have come to expect," Byron King explained yesterday. "There’s not enough cheap energy."

Americans have a lifestyle that many in the world envy and few can afford – not even Americans themselves. Faced with rising oil prices, rising housing payments and stiff competition from Asia, standards of living for the bottom two-thirds of US society are probably going to slip.

And finally, we come to the last of the Big E trends – the Empire. Americans don’t like to think of our country as an Empire. Instead, they imagine it as a kind of proto-democracy; they picture it as Norman Rockwell painted it, with honest, thoughtful people coming together in local schoolhouses in town meetings where important issues are discussed. We are too modest for empire, they say to themselves. Besides, empires need emperors. They don’t have an emperor; they have an elected president, meant to do the will of the people. And they have a society that believes in individual liberty, not collective glory.

And don’t empires need people in funny hats? We Americans don’t wear hats, except maybe baseball caps that advertise where we went on our summer vacations. What’s more, America is a democracy of, by, and for the people. We don’t remember anyone every running for high office on an Empire platform, so it stands to reason we couldn’t have an empire. We never voted for it.

But it’s a strange and wonderful world we live in. Sometimes we get what we did not intend and what no one in particular ever wanted. If you watch the next presidential press conference, you will see the American eagle on the lectern. A symbol of empire, it comes from the Roman era, when the eagle was on all the Roman standards. And if you listen to the president’s remarks, you will find that he spends a lot of time talking about war in exactly the same places where the Romans did their fighting – the edge of the empire, Mesopotamia, where Roman soldiers died by the thousands taking and retaking ancient Babylon. And it is Mesopotamia too, where the soldiers of the British Empire washed up again, on the same river banks, done to death by the same desert tribes.

Then, at the end of the press conference, especially when some new offensive has been announced, you will hear how liberty and modesty die - to the sound of thunderous applause.

America began as Rome did, humbly. It began as an idea – that anyone who wanted to could come to this New World and make do as best he could. You needed no passport, no visa, no blood test, no police record. You just showed up and you were on your own.

The rot set in almost immediately. Before long, it led to a war between the states to determine who got to tell whom what to do. Then, the country tried to turn itself into the kind of nation-state that had proved so successful in Germany and France. A pledge of allegiance to the flag was composed. Social security and other collectivist programs were put in place. They were no different from Bismark's social welfare programs in Germany.

Yet, even while dumbly imitating the Old Country, people out on the plains were trying to convince themselves that they were a race apart - 100% New World. They squinted suspiciously at foreign-sounding names and customs. A congressional candidate even tried to smear his opponent by reading from the menu of the fancy restaurant at which the man dined. "Cuisse de grenouille," he would say out loud, stretching the words out like a corpse, to let listeners get a good look and be appropriately appalled. "Do you know what that is? Frogs' legs. My opponent eats frog legs!" He did not have to say anything more, not in a country where the only foreign language taught in the schools was English.

But side by side with America-the-nation, America-the-empire was developing rapidly too. As WWI progressed and the British found themselves exhausted by the expense, they looked across the Atlantic for help. Woodrow Wilson foolishly took the bait – a lead role in the imperial theatre in exchange for war-time aid.

Naturally, the world-weary Europeans stabbed the naïve Princeton professor in the back as soon as he landed at Le Havre. And the stage was set post-haste for an even more calamitous war. In that one - and then the Cold War - America played yet bigger and more spectacular roles in the world theatre, until, with the fall of the Soviet Union, there was no one left to up-stage her. America was now the sole hegemon, the world’s unique superpower, a country, with such an overwhelming military advantage over the rest of the world that it was compelled to play an imperial role, like it or not.

And soon it seemed to be liking it. But, a taste for empire is, of necessity, a transient one, for we have to ask ourselves - what happens to them? The list of defunct empires is about as long as the list of defunct currencies. Tout passe. Tout casse. They all go away, in other words; they all breakdown.

The Roman Empire itself lasted for nearly a millennium, it is true. But it did so only by reinventing itself, by becoming almost an entirely new empire from time to time. There were civil wars, mass murders, coups d'etat, rebellions, insurrections, revolutions. Blood ran in the streets of Rome often – and long before the city was sacked by barbarians. When Octavian took over from his great uncle Julius Caesar in 43 BC, for example, he had 130 senators put to death. The idea sounds appealing still to many of us today.

In ancient Rome, it was almost de rigeur. Octavian had as many as 3,000 leading citizens bumped off. Old Cicero, who once mocked him, tried to make his getaway in a litter, when he was overtaken by a centurion on the 7th of December, 43 BC. He was reading the 'Medea' of Euripides. He put down the book, it is said, stuck his head out of the window and volunteered: "Here, veteran, if you think it is right, strike." The centurion cut his head off.

But eventually, it is the Empire itself which loses its head. It rots, just like everything else in life, and dies. And it dies in entirely predictable ways, becoming too expensive to operate, or attracting too many parasites, hangers-on, and hustlers. The costs rise, while what you get for your money goes down. The Empire weakens and collapses from the inside...if it is not first defeated from the outside.

Americans don’t see any external enemies fit to bring their empire down. But on the inside, they are not so sure. Each year, the internal rot seems to get worse. Rome may have lasted nearly a thousand years, but Rome wasn’t thrice crippled with the Federal Reserve System, the dollar, and the US Congress. Between the three, the country is probably broke already. The measure of our indebtedness - $65.9 trillion – far surpasses any ability Americans have to pay. It amounts to more than $200,000 for every man, woman and child in the country.

That means revolution, or more likely, inflation. Debt and life-style both will erode simultaneously while millions of households go broke. Of course, we can also imagine much worse, for superpowers do not normally go so gently into that good night.

Either gracefully, or clumsily, one way or another, the trend has to run its course. So you see, dear reader, everything is predictable. We just don’t know how it will turn out.

Regards,

Bill Bonner
The Daily Reckoning

Posted by bhola at 10:12 AM | Comments (0)

July 29, 2006

Dow Chemical takes a dive

KATHARINE SANDERSON, CHEMISTRY NEWS, JULY 28, 2006

Dow Chemical, the US’s largest chemical manufacturer, has blamed ‘unrelenting’ raw material and energy price rises for its disastrous second quarter performance: the company’s net income fell by 19 per cent and share prices tumbled.

Since this time last year Dow’s net income fell from $1.27 billion to $1.02 billion. Share prices dropped by 10 per cent.

Geoffery Merszei, executive vice president and chief financial officer for Dow, said increases in feedstock and energy costs ‘out-paced our ability to raise prices’. Merszei cited escalating costs of oil, naphtha and other feedstocks for the poor financial performance. ‘Prices of some of our other raw materials, such as co-monomers for polyethylene, escalated by almost $250 million year-to-date from the same period last year,’ Merszei said. He also blamed market-driven limits on the price increases Dow could make, in particular for polyethylene, and a poor performance from the company’s agricultural sciences business.

Dow’s predicament is typical of the commodity chemicals market, according to the Chemical Industries Association’s economic advisor Alan Eastwood, and is a short-term problem linked to the recent sharp increase in oil prices. ‘This is the sort of thing that always happens when you get sharp movements in input costs,’ he said.

It’s quite likely that many other companies in this sector will show a similar effect for this quarter. ‘Everybody’s using the same raw materials, everybody’s paying global prices for them,’ Eastwood said. ‘If Dow were caught out, so will their competitors.’

Ian Shott, technical vice president of the Institute of Chemical Engineers, says that Dow’s drop in income is a systematic problem for companies trapped in the middle of the market, supplying chemicals and chemical intermediates. Oil price rises can be ‘a bit of a double whammy’ for these companies, Shott said, because they affect both the cost of raw materials and the processing costs. Yet these price hikes cannot be passed on to customers as quickly as the price of oil moves, he added, leaving companies facing a large deficit.

Posted by bhola at 06:22 AM | Comments (0)

July 28, 2006

Worldwide race for water launched at UN

ASHFAQUE SWAPAN, INDIA-WEST, JULY 28, 2006

A foundation dedicated to helping provide solutions for potable water around the world July 25 announced an around-the-world relay next year at the United Nations, Rajesh Shah, one of four members of the foundation, told India-West.

"It's very exciting," he told India-West during a phone call from the United Nations. "We are a small foundation with a very big dream and out of the blue we got a lead sponsor.

"Dow Chemical heard about us, and they liked our message, and the CEO met with the founder of Blue Planet Run and decisions were made in literally weeks, and we are from zero to hundred. All this at the United Nations was all decided in the last six weeks."

The event, attended by over 100 people, was conducted by Amir A. Dossal, executive director of the United Nations Fund for International Partnerships. UN Deputy Secretary-General Mark Malloch-Brown stood in for Secretary General Kofi Annan, and apologized for Annan's absence, who was in Rome because of the war in Lebanon.

The Dow Chemical CEO was also on hand as well. "Water is the single most important chemical compound for the preservation and flourishing of human life," Andrew N. Liveris said. "And yet today, more than a billion people are in peril every day because they do not have enough water or the water they have is unhealthy. Lack of clean water is the single largest cause of disease in the world and more than 4,500 children die each day because of it."

The event has drawn some critics, however.

"How much would a corporation whose brand resonates with Agent Orange and Napalm, which acquired in 1999 Union Carbide and liability for the deaths it caused in Bhopal, India, pay to be praised by the United Nations?" the alternative newspaper Inner City Press asked rhetorically, casting doubt on the good faith of the chemical giant which has a poor reputation with environmental activists.

Shah joined the Telluride, Colo.-based Blue Planet Run Foundation two months after it was founded by Jin Zidell, an industrialist, philanthropist and environmentalist, in 2002. "The foundation's focus is on water and I handle all the water projects," the Indian American told India-West.

"Blue Planet Run is addressing the problem of safe drinking water that is faced by 1.2 billion people around the world. We are talking about 7-11 liters per person a day," he added. "Next year we are going to have team runners run nonstop for almost a hundred days going across the whole world, and this event is going to highlight the cause, raise awareness and raise money. We are doing something on a fundraising scale that is so different from every other thing that has happened in the past.

"We'll attract sponsors and the whole run is paid for by sponsors and all the excess money goes to water, but what we are expecting is that all the viewers who get interested who learn about safe drinking water will contribute $25. We estimate it's about $25 to get a person safe drinking water for life."

The foundation has already funded more than 40 projects in 12 countries, working with seven different organization, its Web site says. At least 35,000 people are expected to benefit.

"One out of every five human beings, they can't trust the water they drink," Shah explained. "For us, water is the first rung out of the ladder of poverty. If you don't have water, it's hard to go to school, it's hard to be healthy, it's hard to work to earn a livelihood, it's impossible to do anything if you have bad water. So it's a fundamental first helping hand that you can offer people."

Shah, who has overseen the foundation's water projects, has introduced an innovative concept, the Peer Water Exchange, which was announced at the World Water Forum in Mexico City in March.

"There is a major problem of scaling diverse, community-based, appropriate technology, drinking water projects involving education and a change in behavior," Shah told India-West. "This is why over 50 percent of all water projects fail and less than five percent of projects are visited, and far less than one percent have any longer-term monitoring."

Shah said he had built the world's first participatory decision-making system to manage the tens of thousands of projects. The new online infrastructure - the Peer Water Exchange - conquers the problem of scale to get safe drinking water to 200 million people.

Peer Water Exchange can be seen as the first computer program designed to give decision-making power to the people working at the grassroots, Shah said. Treating local volunteers as experts with field experience, the system gives them a say on how to tackle the problems at the bottom of the pyramid around the world, connecting them to give them collective power over they work and measure themselves. It's the first step towards a true participatory society, he added.

Solutions for potable water are more complicated than treating diseases, Shah said.

"The best example I like to give is that we don't have to work on diseases like smallpox and polio where we have these really fabulous scientists and institutions that develop a vaccine," he explained. "We know how to manufacture a million doses and we know how to line up everybody in India or Africa over several weekends and give them a shot. Because that shot doesn't involve any ownership issue, there's no transfer of knowledge, it's the same shot no matter where you are, and there is no change in behavior.

"Now for water, it's not owned by one person. You give it in units of families or the community. It's a lifetime solution; you can't give them one glass of water and say no more for the rest of your life, and the only solutions that work are the solutions that the community owns. So there is a transfer of ownership.

"Also, the solution has to be customized for each village whether it is in Rajasthan, Dhaka, on top of a hill or a bottom of a hill. So you have to have a custom solution, and then finally, there is a change in behavior. People have to not pollute the water, they have to worry about sanitation, hand-washing, those kinds of things."

Shah is confident that with the right focus and effort, the problem of potable water can be solved. "The important thing is that for water, we have solutions, we have ones that are doable, they are achievable, they are measurable, they are sustainable," he stated. "These solutions work for life."

More information is available at www.blueplanetrun.org.

Posted by bhola at 06:19 AM | Comments (0)

July 26, 2006

The Dow Chemical Company announces commitment to clean water solutions at the United Nations: but despite all the fine words, no move to clean Bhopal's poisoned water

UNITED NATIONS, July 2, 2006

R&D, Market Development and Blue Planet Run Foundation Partnership Anchor Sustainability Goal to DriveNew Technologies, More Widespread Global Awareness [Whatever this means]

Speaking at the United Nations before an audience of international leaders from the policy, business, and NGO communities, Andrew Liveris, chairman and CEO of The Dow Chemical Company (NYSE: DOW - News), today committed the Company's resources to developing new technologies and solutions for creating safer, more sustainable water supplies for communities around the world.

Joined by dignitaries including the Mark Malloch Brown, Deputy Secretary- General of the United Nations, members of the United Nations Fund for International Partnerships (UNFIP), United Nations Children's Fund (UNICEF) and the United Nations Foundation (UNF), Liveris emphasized the urgency of addressing the needs of the 1.2 billion people worldwide whose lives are threatened because of inadequate or unhealthy water supplies.

"Water is the single most important chemical compound for the preservation and flourishing of human life," Liveris said. "And yet today, more than a billion people are in peril every day because they do not have enough water or the water they have is unhealthy. Lack of clean water is the single largest cause of disease in the world and more than 4,500 children die each day because of it."

As part of Dow's 2015 Sustainability Goals, Liveris pledged the Company would reinforce its commitment to technologies designed to meet the needs of the 21st century for water development, purification and transmission technologies, including:

* New solutions for economically viable desalination;

* New and improved chemistry and polymers for removing specific impurities in water;

* Innovative materials for leak-proof water piping that can dramatically increase the efficiency of community water systems;

* New, lower-cost technologies and business models for the management of municipal water supplies.

"As a large company, we take our philanthropic mission very seriously, but we approach the challenge of developing water resources not in a spirit of charity but as a business, in a spirit of enterprise," Liveris said. "Where we create the most leverage, the most value, the most power to solve this problem is in the laboratory and in the marketplace."

Blue Planet Run: A Partnership for Global Awareness

Liveris also outlined a new partnership between Dow and the Blue Planet Run Foundation, a U.S.-based non-profit organization committed to sustainable water solutions. The foundation will raise awareness of and funds for clean water projects worldwide through the inauguration of the Blue Planet Run®, the first-ever global endurance run around the world, sponsored by Dow.

Over the course of 100 days, beginning in June 2007, a team of Blue Planet Run athletes will circumnavigate the globe, running 24 hours a day.

According to Blue Planet Run Foundation founder Jin Zidell, the partnership with Dow has created a platform for expanding the reach and influence of the foundation within the community of major corporations that are actively working to achieve sustainability goals.

"The partnership between the Blue Planet Run Foundation and Dow is truly a cooperative effort to raise awareness for this important cause," said Zidell. By working together, we are creating a movement to celebrate life and make a real difference in the lives of millions of most disadvantaged people around the world."

"Blue Planet Run creates a focal point for rallying individuals, businesses and governments around the problem of clean water access," Liveris said. "It is an important piece of our educational and philanthropic commitment to this issue and consistent with the compassionate, dedicated, generous spirit of the 42,000 men and women of The Dow Chemical Company."

Summary of Dow's 2015 Sustainability Goals

Dow's 2015 commitments seek to create a positive impact beyond the footprint of the Company itself. They include the goal of achieving at least three breakthrough solutions in four critical areas affecting human life today: affordable and adequate food supply; safe and affordable housing; improved personal health and safety; and the sustainable water supply efforts announced today.

As part of its 2015 goals, Dow has also committed to improving the Company's energy efficiency, developing alternative sources of energy and addressing the challenge of global climate change that has been driven by the consumption of fossil fuels.

A full summary of Dow's 2015 Sustainability Goals are available at www.dowattainability.com

About The Dow Chemical Company

Dow is a diversified chemical company that harnesses the power of science and technology to constantly improve what is essential to human progress. The Company offers a broad range of innovative products and services to customers in more than 175 countries, helping them to provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. Built on a commitment to its principles of sustainability, Dow has annual sales of $46 billion and employs 42,000 people worldwide. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com.

®Dow and the DOW Diamond logo are registered trademarks of The Dow Chemical Company

®The Blue Planet Run is a registered trademark of the Blue Planet Run Foundation

For editorial information:
The Dow Chemical Company
Chris Grams
989-636-0626
773-354-8369 (cell)
cgrams@dow.com

For editorial information:
The Dow Chemical Company
Nancy Fullerton
989-636-8190
517-304-4695 (cell)
nfullerton@dow.com

[Why not email these two and ask when's Dow's fine words will be turned into action in Bhopal, whose water is poisoned by its 100% subsidiary, Union Carbide?]

Posted by bhola at 07:38 AM | Comments (0)

July 22, 2006

Corporate Center owners study options, including selling the Danbury property

BOB CHUVALA, FAIRFIELD COUNTY BUSINESS JOURNAL, JULY 22, 2006

Former Union Carbide corporate headquarters.

Owners of the 1.3-million-square-foot Corporate Center on Danbury’s west side are studying their options, including whether to sell the former Union Carbide corporate headquarters, after they take full control of the building Jan. 1.

“We’re investigating all our options on that property,” Richard Reeves, president of Sunbelt Management Co. in Delray Beach, Fla., told the Fairfield County Business Journal. Sunbelt is a privately held real estate investment firm that acquired the property in 1986; Carbide, later bought by Dow Chemical, signed a master lease for the building and subleased space as the company was dismantled.

Reeves said options include selling the property, refinancing it, continuing to own it “longer term” and fully leasing it, and building another 200,000 square feet of office space on the 100-acre site. “We’re discussing all these options with different groups,” he said. “There is interest at every level, from buying to leasing to developing our development sites. That’s quite a hot area, with all the other developers in the site.”

The Corporate Center property is surrounded by another 400 woodland acres called The Reserve that is being carved into three projects that will include 2,130 luxury condominiums and apartments, and office buildings, shops and restaurants.

Carbide’s master lease on the building expires on Dec. 31, and companies now leasing space in the building – including Boehringer Ingelheim Pharmaceuticals and the global headquarters of Praxair Inc. – will be subleasing their space from Carbide until then.

“We’ve done more than 600,000 square feet of leasing over the last two years,” Reeves said. “We didn’t want to take it over vacant.”

The building is about 65 percent leased, he said. “That’s pretty spectacular given the history of this building, which was designed as a corporate headquarters.” The leases, some of which don’t begin until Jan. 1, “are a mixture of long- and intermediate- and short-term in a great mix of expirations.”

Reeves said Sunbelt will continue studying its options for the next few months. “We probably won’t be making up our mind until close to the end of the year.”

Posted by bhola at 10:04 AM | Comments (0)

July 21, 2006

Union Carbide's dioxins devastate fishing families in Australia

DALE PAGET, NATIONAL NINE NEWS, AUSTRALIA, JULY 20, 2006

Sydney Harbour fisherman Spiros Kandiliotis and his family (National Nine News)

Carrying a heavy burden, Sydney Harbour fisherman Spiros Kandiliotis walks slowly from Concord hospital surrounded by his children and three grandchildren. He is holding his one-year-old grandson, Stephan, in his arms.

"I poisoned my kids," the fisherman says, holding back tears.

Spiros didn't poison anyone but he feels he did. Until commercial fishing was banned in January, he lived to fish on on the harbour, and thought he was doing the right thing by regularly providing seafood to his family.

He didn't know the prawns, bream and other species were contaminated with potentially cancer causing dioxins, an industrial by-product that had leached into the waterways from Union Carbide's former operation at Homebush Bay.

The dioxin has passed through the food chain into the fish and those that ate them.

"Very high levels, the kids, me, everybody," explains Spiros. "We get poisoned and [it's] the government's fault."

The Kandiliotis family now represents three generations of anguish.

Spiros has about ten times the normal level of dioxin in his blood. His three grandchildren — double the average for an adult.

"I thought I was doing the right thing giving them fish but obviously I wasn't," Stephan's mother Diana says.

"I'm just very emotional."

Tests have been done on 95 fishermen and their families — they have between two and ten times the normal dioxin level. Now the worrying question is will the dioxin will give them cancer? The experts don't think so, but can't be sure.

"At the current time there are no demonstrated health effects at this range of levels," explains the Health Department's Dr Kerry Chant. "But with that there's some scientific uncertainty."

That's no comfort to the families.

"They are healthy at the moment," says Elaine Pensabene, whose two children have tested twice the normal adult level of dioxin. "In four years time, or ten years time ... I don't know."

Francis Forrester tested four times the average.

'I'm shocked," she says.

"I've been poisoned and people who poison others get put in jail and as far as I'm concerned, that's where the government should be today."

Posted by bhola at 03:39 AM | Comments (0)

July 19, 2006

EPA cites Dow Chemical for air, chemical violations

AXCESS NEWS, JULY 14, 2006

By Staff

(AXcess News) Chicago - U.S. Environmental Protection Agency Region 5 has cited Dow Chemical Co. for alleged clean-air violations and has filed an administrative complaint against the company for alleged chemical release reporting violations at the company's Midland, Mich., facility.

The EPA alleges that Dow violated the Clean Air Act by failing to comply with national emission standards for hazardous air pollutants. Specifically, the EPA said the company violated testing, operating, monitoring, recordkeeping, reporting and notification requirements. In addition, the EPA alleges Dow has exceeded emission and other limits.

"EPA's mission is to protect public health and the environment," said Acting Regional Administrator Bharat Mathur. "We will take whatever steps are needed to ensure compliance with the Clean Air Act."

These are preliminary findings of violations. To resolve them, the EPA may issue a compliance order, assess an administrative penalty or bring suit against the company. Dow has 30 days from receipt of the notice to meet with the EPA to discuss resolving the allegations.

Hazardous air pollutants may cause serious health effects including birth defects and cancer. They may also cause harmful environmental and ecological effects.

In an unrelated action, the EPA has filed an administrative complaint against Dow for failure to comply with the Emergency Planning and Community Right-to-Know Act.

The company has been cited for failure to file the required chemical release forms for the 2,4-D butoxyethyl ester during calendar years 2000, 2001 and 2002. Dow was also cited for underreporting the volume of chloromethane and propylene oxide released from the facility during calendar years 2000, 2001 and 2002.

The EPA has proposed a $53,109 penalty. Under the EPCRA statute, the company may request a hearing and/or settlement conference with the EPA within 30 days to discuss the allegations.

Posted by bhola at 08:20 AM | Comments (0)

July 17, 2006

Dow employee receives GENESIS Award

THE FACTS, BRAZORIA COUNTY, TEXAS, JULY 16, 2006

MIDLAND, Mich. — The Dow Chemical Company recently announced the 2006 Recipients of the GENESIS Award for Excellence in People Development. Curtis Swisher of Dow Texas Operations in Freeport was selected for this honor. Part of a very exclusive group — 21 out of 42,000 people — the GENESIS recipients are chosen for sustained excellence in people development, contributing to a workforce focused on bringing out the best in others.

The GENESIS recipients from Dow make a charitable donation to the agency of their choice.

Swisher, a research manager for Hydrocarbons and energy R&D, has been with Dow for 23 years. During his career, his colleagues have come to recognize him as a fearless coach who inspires them to do the right thing. He has created eight people-development workshops, which he presents to a variety of internal Dow audiences, and has written papers about adult learning and leadership coaching. He is the featured author of Career Corner for the Gulf Coast Technologist quarterly newsletter and publishes a monthly Career Tips bulletin. One new leader said he’s seen an almost 300 percent improvement in his own group’s performance since consulting with Swisher.

Swisher’s passion for helping people extends well beyond the workplace. In his spare time, Swisher tutors at a local elementary school and coaches a children’s basketball league. He also participates in mission projects in Mexico, the Dominican Republic and Kenya. A colleague summed it up by saying “When I work with him, its obvious how much he cares about people.”

As part of the GENESIS Award recognition, The Dow Chemical Company will make a charitable contribution on Swisher’s behalf to The Jesus Film Project, the charitable organization of his choice.

A sample story from The Jesus Film Project

A Hindu Priest Considers Jesus

Last summer, a group of Americans visited the island nation of Fiji. They talked with a Hindu priest about the life of Jesus and explained several biblical concepts to him.

Seeing the benefit of following Jesus, the priest then wanted to make Christ one of his many gods.

That night, as he watched the Crucifixion scene in the film, he started to cry. After the showing, a team member stood before the crowd to summarize what they had seen. He emphasized Christ as the ONE and ONLY true God.

The Hindu priest understood. He approached the team member afterward to thank him for sharing the truth, and promised to destroy his Hindu temple and put a Bible in its place.

Today, a Christian church stands on the site where the temple used to be.

Posted by bhola at 09:50 AM | Comments (0)

EPA cites Dow Chemical in Clean Air Act violations

ASSOCIATED PRESS, JULY 15, 2006

MIDLAND, Mich. - The Environmental Protection Agency has cited Dow Chemical Co. in Clean Air Act violations, giving the chemical giant 30 days to meet with agency officials to discuss the claims.

The EPA says the Midland-based company failed to comply with emission standards for hazardous air pollutants. The agency said Dow violated testing, operating, monitoring, record keeping, reporting and notification requirements.

"EPA's mission is to protect public health and the environment," said Bharat Mathur, acting regional administrator. "We will take whatever steps are needed to ensure compliance with the Clean Air Act."

The EPA also said Dow exceeded emissions limits, the Midland Daily News and The Saginaw News reported Saturday. The citation could mean the issuance of a compliance order, a fine or a lawsuit.

Dow spokeswoman Jennifer Heronema said the company is reviewing the claims.

"We are committed to the safe and environmentally sound operations of our site and facilities and will continue to work closely with EPA to resolve each and every item of concern," she said.

The EPA also cited Dow for failing to comply with the Emergency Planning and Community Right-to-Know Act, saying it did not file all required chemical release forms in 2000, 2001 and 2002.

Heronema said the company has been communicating with the EPA on recording issues and has taken action to improve its process.

Posted by bhola at 09:35 AM | Comments (0)

July 15, 2006

EPA cites Dow Chemical over Clean Air violations

REUTERS, JULY 14, 2006

NEW YORK, July 14 (Reuters) - U.S. regulators on Friday cited Dow Chemical Co. (DOW.N: Quote, Profile, Research) for clean-air and chemical release reporting violations at its Midland, Michigan, facility.

The Environmental Protection Agency said the citings are preliminary findings of violations. It said it may issue a compliance order, assess an administrative penalty or bring suit against the company.

The EPA alleges that Dow violated testing, operating, monitoring, record keeping, reporting and notification requirements of the Clean Air Act and exceeded emission and other limits at the facility.

The EPA also cited Dow for failing to file the required chemical release forms for some chemicals and underreporting the volume of other chemicals at the plant in 2000, 2001 and 2002. It has proposed a $53,109 penalty for these violations.

Dow spokesman Chris Huntley said the company needs to review the filing before it can provide a comment.

Posted by bhola at 09:09 AM | Comments (0)

July 11, 2006

Dow Chemical, Saudi Aramco in exclusive petrochemical venture talks

DOW JONES NEWSWIRE, JULY 10, 2006

DOW JONES NEWSWIRES
Dow Chemical Co. (DOW) was chosen as a potential partner to engage in exclusive negotiations concerning a joint-venture company by The Saudi Arabian Oil Co.

The Midland, Michigan, chemical company said the joint-venture company would build, own and operate a chemicals and plastics production complex at Ras Tanura, in Saudi Arabia's Eastern Province.

The joint venture would encompass an array of facilities producing a broad portfolio of plastics and chemical products, Dow Chemical said.
The proposed complex would be integrated with the existing Ras Tanura refinery complex, the company said.

Dow Chemical shares closed Friday down 51 cents, or 1.3%, at $37.86.

Saudi Aramco picks Dow as partner for petrochemicals project 11/07/2006

JOHN WHITEHEAD, PLASTICS & RUBBER WEEKLY, JULY 11, 2006

Saudi oil giant is keen to build chemicals role.

11 July 2006 — Dow has been chosen by Saudi Aramco as the oil giant’s “potential partner” in a world scale chemicals and plastics complex at Ras Tanura, one of the world’s leading refinery complexes. Saudi Aramco will hold exclusive negotiations with Dow on the project, it announced yesterday.

The joint venture would include a number of facilities “producing a very broad portfolio of plastics and chemical products,” the companies say.

Owned by the Saudi government, Saudi Aramco has proven reserves of 260 billion barrels of oil, equivalent to nearly one quarter of the world total and also operates the world’s fourth largest gas reserves. It has already signalled its ambitions to develop a role in petrochemicals and plastics by establishing a joint venture with Sumitomo Chemical at its Rabigh refinery.

Dow’s major Middle East presence up to now is in the Equate joint ventures in Kuwait which it acquired through its purchase of Union Carbide.

Posted by bhola at 01:42 AM | Comments (0)

July 09, 2006

Ambrx secures $52 million in series C venture capital: Financing led by Apposite

VENTURE CAPITAL MAGAZINE, JULY 7, 2006

San Diego, CA.- Ambrx Inc. announced it has secured commitments for $52 million in Series C financing from a broad, international syndicate of new and existing investors. Net proceeds will be used to further expand Ambrx’s novel protein modification platform, support the development of its product pipeline and for general working capital purposes.

The financing was led by Apposite and included participation from Glynn Ventures, the Dow Employees’ Pension Plan and Union Carbide Employees’ Pension Plan, as well as Ambrx’s current investors, including Tavistock Life Sciences, Maverick Capital, 5AM Ventures, Versant Ventures, Aravis Ventures, CMEA Ventures and Roche Venture Fund.

"The size of the round and the caliber of its new and existing investors are indicative of the strong interest and belief in our company’s fundamentals,” said Martin Mattingly, Pharm.D., Ambrx’s president and chief executive officer. “We’ve taken a novel technology that is broadly applicable to existing protein drugs and used it to advance our lead product candidates from the laboratory toward the clinic in less than three years. The financing will enable us to continue on the fast track with drug development and support our transition into a clinical-stage company later this year."

In conjunction with the closing, Allan Marchington, Ph.D., general partner with Apposite, has joined Ambrx’s board of directors.

"Ambrx's compelling technology platform and experienced management team were key factors in our decision to invest in the company,” said Marchington. “With this financing in place, Ambrx is well positioned to achieve its potential in transforming the development of protein-based therapeutics."

About Apposite

Apposite is a single sector fund investing in both life sciences and healthcare services on an international basis. Based in London, Apposite was established by the Mizuho Financial Group, one of Japan's largest financial services companies. The members of the Apposite team have a highly synergistic mix of healthcare venture/private equity, entrepreneurship, management and investment banking experience spanning many decades. Apposite also benefits from an established global network of leading advisors covering all aspects of the global healthcare market. The fund's strategy is to leverage the capabilities of the team and its advisors, combined with the fund's extensive range of contacts in Japan, Europe and the U.S., to continuously add value to its portfolio companies.

About Ambrx

Ambrx is a biopharmaceutical company focused on optimizing existing protein drugs. Using its technology, the company can overcome the performance challenges of high-value commercial proteins by improving their efficacy, safety and ease of use. Ambrx’s core ReCODE™ technology allows for the precise, site-specific substitution of a novel amino acid within a protein. This technology is applicable to multiple protein products across numerous therapeutic areas. Ambrx expects to initiate clinical trials with a long-acting, PEGylated human growth hormone in early 2007, followed by an enhanced, PEGylated interferon alpha molecule. With its innovative approach, Ambrx has successfully bridged the gap between a platform that works and drug development.

More information:

http://www.ambrx.com

Posted by bhola at 03:54 AM | Comments (0)

Praxair expanding its local operations: New engineering unit will be created

JONATHAN D. EPSTEIN, BUFFALO NEWS, JULY 8, 2006

Industrial gas maker Praxair wants to renovate nearly 30,000 square feet of underused manufacturing space in Tonawanda to create a new engineering and design operation focused on meeting a sharp increase in U.S. demand for hydrogen and other gases.

The Danbury, Conn.-based company is seeking to form a new U.S. Project Execution Center in 28,430 square feet of existing space that officials said has been neglected. The company will convert the facility by year-end into modern office space for about 100 technical engineers, project managers, procurement professionals and others, said site manager Dennis A. Conroy.

The group's mission will be to design and manage projects for new plants or pipelines, plant upgrades or pipeline expansions in the United States. It will not do research and development, Conroy said. The team will be separate from the company's worldwide engineering group, but will be accessible to them.

About 75 of the employees will be transferred from worldwide operations, mostly within the local Technology Center plant, while 25 will be hired from outside.

"The beauty of this is we keep these jobs right here in Western New York," Conroy said. "In a site that has a very rich history for Praxair, we're bringing it up to its peak performance again."

Praxair's history in Western New York dates back to 1907, when Linde Air Products Co. was formed and built its first facility in Buffalo. The company, which also has a gas-separation plant in Niagara Falls, built the Tonawanda facility in 1937 to construct its three-story air separation units.

Linde was acquired by Union Carbide Corp., but was spun off as Praxair in 1992, when the company decided to shift the Tonawanda site to high-technology because the plant was no longer competitive for global manufacturing. Today, the Technology Center employs more than 1,100 workers in 25 buildings on 105 acres.

The expansion comes in response to a surge in demand for the gases Praxair produces. For many years, U.S. demand had slumped while attention was focused on international growth, but that's changed because of high fuel prices and increased interest in hydrogen in particular.

In the past two years, the U.S. market has increased by at least 50 percent, and "that's probably a very conservative number," Conroy said. "It has increased substantially."

Praxair is the largest provider of industrial gases in North and South America, and one of the largest worldwide, with 25,000 employees and operations in 40 countries. Its core products are atmospheric gases - nitrogen, oxygen and argon - but it also makes hydrogen, where the growth is concentrated. Acetylene and propane are other products.

Officials considered a variety of alternative locations, including in Houston, because of the proliferation of industrial gas there, but ultimately chose Tonawanda.

The company is working with the Erie County Industrial Development Agency to obtain $1 million to $1.5 million in sales tax exemptions to help the expansion. A public hearing is scheduled for Aug. 2 to solicit comment, and the board will consider the plan on Aug. 14.

"Praxair has a long history of corporate stewardship in the Buffalo community," said Mike Conway, senior director of business finance for the IDA. "It's important that we support Praxair, because it truly is the largest concentration of degreed employees in the private sector. We needed to put our best foot forward in order to encourage this investment."

Besides basic renovation of the space, the firm also will buy and install new technology, communications and office infrastructure. And Conroy expects the project to have "domino" effects elsewhere in the overall plant, with realignments, rearrangements and upgrades for research, information technology and support services overall.

"You do an upgrade like this, and you feel the need to continue it and enhance it," he said.

Work is already under way, with planning and design completed. Conroy said the project will be completed and operational by Dec. 31. "We are ready to get going," he said.

Posted by bhola at 03:52 AM | Comments (0)

July 05, 2006

After all the lies, here it is, out in the open: METEOR is a Union Carbide technology

Dow tried to sell METEOR technology to the Indian government-owned Indian Oil Corporation, and lied about its origins. They failed to mention that the technology was developed by its 100% subsidiary Union Carbide Corporation, which in India is a fugitive for justice whose assets have been seized for refusing to attend a court in Bhopal where it is charged with the culpable homicide of 20,000 human beings.

Alert ICJB members spotted that METEOR was a Carbide technology and nationwide protests resulted. Indian Oil rescinded the contract it was in the process of awarding to Dow Chemical. Dow cried foul and said it would demand millions of dollars in damages. Now, as we see, here is proof that the ICJB got it right, METEOR was Union Carbide and Dow was a liar all along.

Our message to Dow is, clean up Bhopal or get out of India. We will never let you rest until you produce Union Carbide in court and repair the damage it has done, and that its chemicals are still doing, in Bhopal.

Dow and Aker Kvaerner Sign Cooperation Agreement for METEOR(TM) EO/EG Process Technology

Zoetermeer, The Netherlands and Midland, MI , USA (July 5, 2006) -

Dow Technology Licensing and Aker Kvaerner today announced an agreement between Union Carbide Chemicals & Plastics Technology Corporation (UCCPTC), a subsidiary of The Dow Chemical Company, and Aker Kvaerner Netherlands BV to cooperate on delivering services to METEOR(TM) Ethylene Oxide /Ethylene Glycol (EO/EG) process technology licensees. The cooperation agreement will extend to helping potential licensees in the evaluation of METEOR EO/EG process technology and executing engineering, procurement and construction contracts for companies that sign licenses.

"METEOR EO/EG process technology is unique compared to other technologies, both because of the simplicity of its plant design and because of its EO catalyst, which provides the rare combination of high efficiency and activity. Aker Kvaerner has an excellent reputation as an engineering services provider and we are confident that, through this agreement, our customers and potential licensees will receive the highest levels of technical expertise, service and support," said Dr. Molly Peifang Zhang, vice president of Dow Technology Licensing.

"We are extremely pleased to be working with Dow for this technology. METEOR EO/EG process technology has proven to be the most competitive EO/EG technology in the marketplace, and we are convinced that, together with Dow, we can provide the best business solutions to our clients. Our existing relationship with Dow for polypropylene technology continues to be highly successful, and we see this new agreement as a natural extension of our relationship," said Wim van der Zande, president, AK Process.

"This is the first cooperative agreement Dow has signed with an engineering contractor for METEOR EO/EG process technology," said Joseph Bromley, business director, Dow Licensing Technology, METEOR(TM) and LP OxoSM Technology. "This agreement is a continuation of a strong relationship Dow has had with Aker Kvaerner and we are excited about the opportunity to have an increasingly productive relationship well into the future."

METEOR EO/EG process technology has a simpler design than other EO/EG technologies, resulting in significant savings for the company’s licensees. Compared with other plant technologies, METEOR EO/EG process technology reduces equipment requirements and overall plot plan size, dramatically improves raw material utilization and requires less start-up capital. The simplicity of the METEOR process provides optimal reliability and ease of operation and maintenance.

® (TM) SM* Trademark of The Dow Chemical Company ("Dow") or an affiliated company of Dow.

About The Dow Chemical Company

Dow is a diversified chemical company that harnesses the power of science and technology to improve living daily. The Company offers a broad range of innovative products and services to customers in more than 175 countries, helping them to provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. Built on a commitment to its principles of sustainability, Dow has annual sales of $46 billion and employs 42,000 people worldwide. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com. Dow Technology Licensing is a business unit of Dow that markets technologies owned by The Dow Chemical Company, Union Carbide Corporation and their subsidiaries.

About AKER KVÆRNER ASA

AKER KVÆRNER ASA, through its subsidiaries and affiliates ("Aker Kvaerner"), is a leading global provider of engineering and construction services, technology products and integrated solutions. The business within Aker Kvaerner comprises several industries, including Oil & Gas, Refining & Chemicals, Mining & Metals, Pharmaceuticals & Biotechnology, Power Generation and Pulp & Paper. The Aker Kvaerner group is organised into two principal business streams, namely Oil & Gas and E&C, each consisting of a number of separate legal entities. Aker Kvaerner is used as the common brand/trademark for most of these entities. The parent company in the group is Aker Kværner ASA. Aker Kvaerner has aggregated annual revenues of approximately NOK 41.4 billion and employs approximately 21,000 people in more than 30 countries.

About AK Process

AK Process is a trading name of Aker Kvaerner Netherlands B.V., a wholly owned subsidiary of AKER KVAERNER ASA and the legal entity entering into the cooperation agreement. AK Process serves the chemicals and polymers, refining and onshore oil & gas industries. It provides the full life cycle of a project from concept studies, through to design, engineering, project management, delivery of process technologies, procurement, construction and maintenance services. As a pure project execution/EPC specialist, AK Process can provide customers with strategic ’one-off’ services or full turnkey solutions under a single project management control. It works with its customers in the development of major technological innovations, having participated in the conceptualization and implementation of ideas, which are the foundation for world-class production facilities.

Posted by bhola at 10:44 PM | Comments (0)

July 02, 2006

Business profile: Sellafield man

SUNDAY TELEGRAPH, JULY 2, 2006

The Scouser at the helm of British Nuclear Fuels, Mike Parker, is working himself out of a job as he sells off the company's assets one by one, racking up the profit in the process. But Martin Baker finds Sellafield remains a thorn in his side

And for his next trick, Mike Parker will disappear. A very impressive feat it is too - all done with smoke, but not mirrors. Parker, as the chief executive of British Nuclear Fuels, uses nuclear reactors instead.

Tomorrow, Parker will present BNFL's results to one of the most beady-eyed audiences in world industry. Having racked up a loss of £144m last year, BNFL is expected to announce a substantial profit. "We're going to show some results that are very good, ahead of plan, and we'll all feel very good about them," says Parker, a Scouser whose 34 years in the United States with chemicals giant Dow have merely produced a light gentrification of his accent.

Mike Parker felt that the nuclear industry would be a big issue again and would have to be seriously considered

You have to take the expected "profits" with a pinch of salt, or, this being the nuclear industry, Technetium 99. The Government is the sole shareholder of BNFL, so the figures are produced with smoke and calculators. The announcement is all part of the process that sees BNFL (which runs Sellafield, described by critics as the "nuclear dustbin" of Europe) selling off its prime assets. In February, Parker signed a $5.4bn (£3bn) sales agreement for Westinghouse, a US-based division selling fuel and reactor services and developing nuclear reactor technology to commercial concerns around the world.

"We saw this as a terrific opportunity to realise value for the taxpayer and to find an owner that would want to grow it. It's an excellent fuel and reactor services business," he says. "But the real opportunity going forward that's just started to happen very visibly in the last 18 months is the tide for nuclear around the world, pro-commercial nuclear power. First in China and to some extent in India, now -heavily in North America. There's a lot of opportunity out there. With opportunity goes risk, and that risk needs to be managed.

"Ultimately, I want to do everything professionally, and then switch out the lights at BNFL," he adds. Aided by the Government's pet investment bank, NM Rothschild, Parker's hand will be guided towards the switch with the sale of the biggest remaining part of BNFL's business, British Nuclear Group, next year. The sale process is expected to begin in April and be finished by the end of 2007. The BNG price tag will be in part a function of the contribution it makes to BNFL's expected profits, with some estimates suggesting that a figure of £75m will be recorded. Possible bidders for the specialist nuclear clean-up business, when Roths-child puts BNG under the hammer, are said to include Fluor, Bechtel, and Areva, the French company: though some speculate that UK services specialists such as Serco might also be interested.

The one black spot in the figures is expected to be the fallout from a leak at Sellafield, which may result in court cases and fines running to "low tens of millions" of pounds, according to industry observers.

When you reflect on Parker's job, it is more than a little unusual - a form of extreme chambermaiding in the commercial world. This fellow and his company do not just exist to tidy things up; they exist to tidy everything, including themselves, into oblivion.

There is a minor exception to this. Nexia, BNFL's nuclear research and development arm, will continue to exist as a repository of know-how after BNFL and Parker have disappeared, provided that the Government accepts Parker's recommendations.

The recommendations are the key to what drives Parker forward at BNFL. Although it is easy enough to portray him as some sort of industrial lemming, cheerfully hurling himself and his colleagues at BNFL off the professional cliff tops, Parker is a forward-thinking chap with some forthright views on energy policy.

"Energy is so important and it influences the policy of governments," he says at our appointment in Rolls-Royce's Buckingham Gate offices (a choice of venue to delight conspiracy theorists). "I'd formed the view that the US and the UK were very important countries that for a variety of reasons didn't have fully defined energy policies.

"I felt that nuclear was a very difficult subject, especially in the US and UK, because the origins of the industry there were weaponry. Eventually, both embraced commercial nuclear power. I felt it would be a big issue again, something that would have to be -seriously considered."

There is a sense of renewal about Parker. He has come back to the UK after a marathon stint in the US, where he made it to the top of Dow, which he joined in 1968 when his fellow students at the University of Manchester Institute of Science and Technology were busy protesting about anything and anyone that did not have long hair. After three-and-a-bit decades, Parker ran a company with 42,000 employees in 175 countries and a -market capitalisation of some $46bn.

So policy and public-sector process present a new challenge for an experienced private--sector operator who turns 60 today. "Dow was a very big private global enterprise, very successful, very powerful. I'd never dealt with government. I thought that would be interesting."

And, in fairness, he had a bit of time on his hands. Parker was voted in to the top job at Dow in February 2000. He had the task of overseeing the $3.9bn acquisition of Union Carbide, a job that saw him having to deal with people protesting about the aftermath of the Bhopal disaster holding a candlelit vigil outside his Michigan family home.

He managed that challenge by going out and talking to them. But there were other forces that were more difficult to resist: "The chemicals industry went into the worst trough it has been in 30 years. The results became -difficult and, basically, I got shot at the end of 2002, and my predecessor [the chairman and former chief executive] came back." Parker is still plainly shocked and angered by it: "It was a crossroads. It was a big surprise. It was a big surprise in the industry… I made it very clear to them they were going to fire me. I wasn't resigning. The industry press were also shocked as to what had occurred."

But the headhunters beat a path to his door round about the time when it seemed that the war in Iraq was going to be easily won (the beginning of the markets' "Baghdad bounce" in early 2003). However, Parker was still feeling pretty raw and took some persuading. "There were some feelings that was it really even a good idea to work again, given what had happened. I decided I would be open to working again. I was a capable person, but not looking. I was still adjusting to what had happened."

Former colleagues reckon Parker is made of pretty durable material: "It's not just -getting to the top at a big American corporate Dow, which is an achievement he shares with very few Brits - Alex Trotman at Ford, and Tony O'Reilly at Heinz, if you count the dual nationality, are two of a very small handful," says one. "He's a natural competitor, and he can't sit still for long."

Parker, an outstanding sportsman who captained Merseyside Grammar Schools at cricket and British Universities at tennis, also had a Liverpudlian upbringing to teach him what resolve in the face of hardship and conflict really was all about. He is old enough to remember the bad old days of sectarianism in the Liverpool of his childhood. Parker's mother ("a lioness with her children - she gave us confidence, no matter how difficult the circumstances we faced") was one of 13 children, and was excluded from the Catholic Church for marrying a Protestant and not bringing the children up as Catholics. And Parker's father, an artillery captain under Montgomery in the Second World War desert campaign, came back from the war badly shell-shocked: "He would sleepwalk, counting corpses for years," recalls Parker.

Although he is working himself out of a job, Parker will take on others. He has just accepted a non-executive directorship at Invensys, and a "serial" non-executive role may be his in the future. "I have a lot of experience and energy to offer," he says, no pun intended.

Posted by bhola at 12:47 PM | Comments (0)

July 01, 2006

Dow Chemical objects to petroleum reserve plan

BRUCE NICHOLS, REUTERS

Dow Chemical Co. and the Department of Energy are at odds over a potential government purchase of a site near Dow's largest plant to expand the Strategic Petroleum Reserve.

The land, part of an area known as Stratton Ridge southwest of Houston, contains an underground salt deposit that would be hollowed out to store oil. Dow says the deposit is a crucial source of chlorine used to make half the chemicals produced at its Freeport plant. The facility makes a fifth of Dow products sold worldwide. Loss of the resource would threaten the viability of the 65-year-old complex that now employs 6,000, Dow says.

Local officials, union leaders and neighboring companies that buy from or supply Dow have joined in opposition to forcing Dow to give up the site.

The Stratton Ridge site is one of five in Mississippi, Louisiana and Texas that the government is considering for expansion of the reserve. Plans call for a decision by the end of August, the Energy Department's David Johnson said.

"They've asked us politely to take a look at other salt domes," said Johnson, noting officials in Mississippi and Louisiana want their states to be chosen. "We'll take that into consideration."

Posted by bhola at 11:11 AM | Comments (0)