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Houston welcomes chemical engineers.

Houston Welcomes Chemical Engineers

How will the Free Trade Agreement (FTA) affect the petroleum and petrochemicals industry? This was one of the themes of the 1989 Spring National Meeting of the American Institute of Chemical Engineers. More than 2,000 chemical engineers from Canada and the United States gathered at Houston's George R. Brown Convention Center from April 2-6, 1989, to focus on the needs of petroleum and petrochemicals producers. Chemical engineers from plants in the Houston area were drawn to Petro Expo '89, a trade show featuring more than 400 exhibitors with products ranging from advanced computer simulation packages to specialized microbes.

The conference programme included 98 technical sessions. For the first time since the 2nd World Congress of Chemical Engineering, held in Montreal in 1981, the CSChE and AIChE jointly sponsored technical sessions, perhaps one sign of increased cooperation anticipated between our countries resulting from the FTA. John Heiman, of BASF Corp., Technical Programme Chairman for the meeting and Moe Fayed, FCIC, of Ryerson Polytechnical Institute, arranged nine joint sessions on the topics of membranes for gas treatment and hydrocarbon separations, natural gas conversion, heavy oil upgrading, and advances in mass transfer tower packings. Canadians and Americans shared in the organization and chairmanship of these sessions. Keynote addresses by Robert Levy, vice-president and director of technology development for the M.W. Kellogg Co., and Bob Gower, president of Lyondell Petrochemical Co., on Monday morning served to kick off the meeting. The theme for the plenary session was a vision of and outlook for the petrochemicals industry in the 1990. CSChE President Edward (Ted) Rhodes, FCIC, of Polysar Ltd., added a Canadian flavour to this session, discussing the impact and implications of the FTA for the industry and the chemical engineering profession.

On Monday afternoon, Heiman and Fayed chaired an open forum on free trade. Unfortunately, this session proved to be one of the best kept secrets of the conference. The audience of 20 were mainly Canadians. As often noted during the negotiations, free trade appears to be a more critical issue for Canadians than for Americans.

In a brief statement at the start of the session, Rhodes emphasized that in order to compete in a global economy, we must rely on our technological skills. North America has traditionally been a leader in the chemical industry and this position offers a unique opportunity. In the short term, the FTA provides Canadian petrochemical firms with guaranteed access to a larger, tariff free market. Rationalization in the industry as a result of the FTA, will lead to improved cost effectiveness and productivity which will guarantee competitiveness in the long term.

A panel of Canadians and Americans made short presentations on the FTA. Panel members included Jim Spence, president, Forest Products Polymers, CIL Inc.; Hans Maciej, vice-president, Canadian Petroleum Association; and Terry Grier, president, Ryerson Polytechnical Institute. American members of the panel included Mark Payton, M.L. Payton & Associates; Jim O'Connor, manager, international trade, Chemical Manufacturers' Association; and Kamel Boustany, president, Permea, A Monsanto Company.

While Canada and the United States had different reasons for entering into the FTA, the overwhelming reason for a free trade arrangement between the two countries is the reorganization of the global economy into large trading blocks. The countries of North America must join together to find means to lower costs, raise productivity and drop technological barriers. Economic growth comes from a technology position at the leading edge. Under the terms of the FTA, Canada will be a reliable supplier of petroleum and natural gas to the US, a valued customer. This relationship will be governed by the marketplace, free from intervention by the governments of both countries. Most tariffs on petroleum and natural gas will be phased out during the first five years of the agreement. Two-thirds of Canada's energy trade is with the US and it is essential for the production sector of the industry. It is estimated approximately $30-billion of investment capital was generated by energy trade with the Americans in the last decade. While it was generally conceded the FTA is not perfect, it provides significant opportunities for the petroleum and petrochemicals industry. In most areas, the FTA comes close to meeting conditions outlined in a 1985 position paper, prepared by the Chemical Manufacturers' Association after consultation with the Canadian Petroleum Association.

Two areas where the FTA does not meet expectations, are the handling of intellectual property and subsidies. The agreement totally avoids intellectual property issues and subsidies will be defined and harmonized over a period of seven years. A key issue to be resolved is the sharing of technology. In order to remain at the leading edge, greater movement of both students and professionals within the industrial and academic research communities, is needed to promote the sharing of ideas.

American engineering and construction firms established Canadian operations in an effort to capitalize on the mega-project boom of the late 70s and early 80s. While the opportunists have withdrawn from Canada following project cancellations in the early 80s, several companies have expanded their Canadian operations during the last decade. Under free trade, American and Canadian firms will receive equal treatment. In the short term, opportunities exist for Canadian companies in the US market due to a surge of new projects. In the longer term, the stable investment climate produced by the FTA will spawn new energy projects with employment for firms from both countries. Canadians have expressed concern about the impact of free trade on social programmes, sovereignty and culture. While some short-term dislocation and loss of jobs is expected, Canadians worry that long-term employment gains resulting from a stronger economy will not offset the short-term losses. Under the FTA, Canada will relinquish its ability to review all but the largest foreign takeovers. In the energy sector, governments can no longer act in defense of federal-provincial interests. Social programmes are likely to come under attack both from Canadian employers, who will complain that their contribution to social programmes puts them at a competitive disadvantage, and from American firms who view regional development and unemployment insurance programmes as unfair subsidies.
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Title Annotation:1989 Spring National Meeting of the American Institute of Chemical Engineers at Houston, Texas
Author:Hazlett, J.D.; Jonasson, K.A.
Publication:Canadian Chemical News
Date:Jun 1, 1989
Words:1016
Previous Article:Free trade and chemical engineers.
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