America’s High-Tech Triumph

Of all high-tech industries in America, the most high tech of all may well be chemicals. Chemicals is the industry that spends the most nongovernment money on research and development—more than eleven billion dollars a year—and that spends more research money on basic (not applied) research than any other. Furthermore, it is one of only two major hightech industries that have consistently maintained a positive balance of payments in international trade. (The other is aerospace.) Why is the American chemical industry so enduringly preeminent? In part because early in the century there emerged a distinctly American discipline: chemical engineering, supported by a university system highly accommodating to the needs of the young industry and aided by the rise of the American-born institution of the independent process-design firm. The story of how chemical engineering began and grew in America holds lessons for all industry.

It is easy to forget how crucial the chemical industry is in the provision of food, clothing, health, and shelter. It turns out paints, pharmaceuticals, soaps and detergents, perfumes and cosmetics, fertilizers, pesticides, herbicides, solvents, plastics, synthetic fibers and rubbers, dyestuffs, photographic supplies, explosives, and antifreeze. It also plays a crucial role in many other industries, including petroleum, rubber, steelmaking, aluminum, paper—and glassmaking, and foodstuffs. In terms of generating broad technological innovation, the chemical industry has been, like the machinetool industry a century ago, a locus of creative activity that has spilled over into a host of other endeavors.

Even if this nation hadn’t invented chemical engineering, it would have developed a powerful chemical industry. From the beginning American firms have shown an eagerness to exploit the benefits of large-scale production. After World War I the automotive explosion spurred the petroleum-refining industry to expand and modernize, while the wartime cutoff of organic chemical imports from Germany had recently forced America to develop many of its own chemical supplies. And since the United States had vast oil and gas reserves, it pioneered in the worldwide conversion of the organic-chemicals industry from a coal to a petroleum base. But it is the chemical engineering profession that equipped the nation’s industry to make the most of these opportunities.

The chemical industry is where systematic industrial research first began. In America the industry accounted for more than a quarter of all new industrial-laboratory foundings between 1899 and 1946, and scientists and engineers make up a greater portion of the work force in chemicals than in any other industry. Scientific experiment at the laboratory level has been crucial in developing nylon, high-density polyethylene, polypropylene, urethane foams, electronic chemicals, pharmaceuticals, pesticides, synthetic rubbers, and much more. But after the initial research, chemical engineering becomes the fundamental discipline for translating small-scale reactions to full industrial manufacturing processes.

The essence of all chemical engineering is the cluster of skills needed to design and coordinate chemical-processing equipment. We know now that the acquisition of these skills involves an educational curriculum vastly different from that offered to a chemist or a mechanical engineer. But this fact took many years to be worked out. The development of the discipline happened, to a striking degree, at a single institution: the Massachusetts Institute of Technology.

Although Germany established its strong tradition of chemical research first, in the late nineteenth century, there the chemists more or less handed over their findings to mechanical engineers. The two professions maintained strictly separate roles. Having little understanding of chemical transformations, mechanical engineers were ill trained to evaluate the many tradeoffs inherent in the design of efficient chemical-processing equipment, and with few exceptions they implemented the chemists’ ideas with little or no underlying science.

At first, chemists and engineers stayed separate in America too: industrial chemists focused on the production of single chemicals from beginning to end and saw few unifying principles involved; mechanical engineers focused primarily on machinery, as they have since; and applied chemists broke down industrial processes into their chemical steps, with little attention to production methods. Industrial companies alone had the know-how to design and operate large-scale plants, and they did so largely empirically.

Professor Arthur A. Noyes, a graduate of MIT with a doctorate from the University of Leipzig, believed that proper training for a career in industry must emphasize the principles of the physical sciences. He wanted to transform MIT, then an undergraduate engineering school, into a pure-science-based university that included a graduate school oriented toward basic research. In 1903, having financed half of it himself, he succeeded in establishing a German-style Research Laboratory of Physical Chemistry. It soon produced the first Ph.D.’s from MIT. MIT’s Graduate School of Engineering Research was founded the same year.

A very different vision possessed William H. Walker, a chemistry professor and close colleague of the famous chemical consultant Arthur D. Little. Walker and Little insisted that MIT remain a school of engineering and technology and train the builders and leaders of industry by focusing on applied sciences. A sharp controversy began between Noyes and Walker that would last for years. Walker was primarily involved in chemistry and chemical engineering, but his vision encompassed other fields as well. He held that only through an understanding of actual problems drawn from industry could a student move from theory to practice. He found this particularly important in dealing with problems of scale—matters of materials, costs, markets, safety, and the like that only industrial firms had ever dealt with. Such matters had little to do with the European craft traditions that a more traditional education would impart.

Walker reorganized MIT’s languishing program in industrial chemistry, converting it from a miscellaneous assortment of courses in chemistry and mechanical engineering into a unified program in what would become chemical engineering. As time passed, the program came to be based more and more on the study of unit operations, a concept expounded by Arthur Little in 1915. Unit operations meant reducing the vast number of industrial chemical processes into a few basic steps such as distillation, absorption, heat transfer, filtration, and the like. In effect, Walker and Little were developing the principles of chemical engineering, devising new conceptual frameworks neither used nor needed by chemists, who studied basic laboratory science and would never have to concern themselves with industrialsize plants and equipment.

What was emerging was a unifying discipline for a very wide range of individual products and processes. An engineer trained in unit operations could mix and match them as necessary. Such an engineer would be flexible and resourceful in his approach to problem solving, particularly as new materials and products emerged.

Walker succeeded in establishing a Research Laboratory of Applied Chemistry at MIT in 1908. (At about the same time he helped found the American Institute of Chemical Engineers.) The new laboratory would solicit research contracts from industrial firms, providing reallife experience for faculty and students and a chemical-engineering graduate program with close links to industry. At the time, few American firms had their own research facilities (General Electric and Du Pont had been among the first, establishing their new departments in 1901 and 1902 respectively). Walker had seen how the rapid growth of the German chemical industry had been facilitated by close cooperation between industry and academics.

To further promote industry connections, Walker and a younger colleague, Warren K. Lewis, founded in 1916 the School of Chemical Engineering Practice, again with Little’s support. This gave students access to working industrial facilities where they could put to use their classroom instruction under faculty supervision.

Walker’s approach to technological education at MIT eventually prevailed over Noyes’s. After World War I the institute’s chemical-engineering program grew rapidly, paralleling the expansion of the chemical industry itself. Under Warren Lewis and his colleagues, the department became an intellectually powerful center, its authority cemented by the publication in 1923 of a pioneer text by Walker, Lewis, and William H. McAdams: Principles of Chemical Engineering . And Lewis developed a pathbreaking relation with the petroleum-refining industry.

The petroleum industry had been broken up in 1911 under an antitrust ruling that split up the Standard Oil Company into a group of competitive companies, each of which did little research, development, or engineering. After the war, as the demand for gasoline soared, the companies found they weren’t equipped for greatly increased production. In 1919 Standard Oil of New Jersey created a development department under a patent attorney named Frank A. Howard, who promptly engaged the best consultant he could find—Warren Lewis of MIT.

Lewis set out to make distillation more precise and the refining process continuous and automatic. The processes then in use had to be interrupted from time to time for clean-outs and repairs, and they were clearly inadequate. The cracking furnaces, for instance, periodically coked up and had to be shut down. To shift to continuous processing, the industry would have to invent the technologies that would also be the basis of the future petrochemical industry.

By 1924 Lewis had helped increase oil recovery by introducing the use of vacuum stills, which by operating at lower temperatures avoided coking and fouling. The average yield of gasoline rose from 18 percent of crude to 36 percent between 1914 and 1927. Lewis’s vacuum stills became refinery standards, and course work at MIT was altered to embody his new concepts and their design principles.

In 1927 Frank Howard, still at Standard Oil of New Jersey, entered into a series of agreements with the German chemical giant I. G. Farbenindustrie to get access to research that might help Standard Oil further improve its gasoline yields and increase its activity in chemicals. But to exploit the possibilities he would need a whole new research group. Once again he consulted Warren Lewis, who introduced him to Robert Haslam, head of MIT’s Chemical Engineering Practice School. Haslam formed a team of fifteen MIT staffers and graduates who set up a research organization for Standard of New Jersey in Baton Rouge, Louisiana.

Many of the most important new developments in petroleum processing before World War II originated at this Baton Rouge center, where pilot plants of appropriate sizes could be built and technically supported. With continuing advice from Lewis, and later from Edwin R. Gilliland of MIT, Baton Rouge introduced hydroforming, fluid flex coking, and fluid catalytic cracking, which ultimately became the most important source of propylene and butane.

By now Lewis had gone far beyond Walker’s earlier programs. Walker had brought industry to the campus; Lewis in effect took the campus to industry, and in so doing helped solve some major industrial problems. Moreover, he focused the discipline of chemical engineering on an overall systems approach to the design of continuous automated processing, first in petroleum refining and later in chemicals. America’s subsequent commercial success in petrochemicals would have been a vastly different story without this learning experience. And the growing discipline of chemical engineering was benefiting other parts of the chemical industry as well. For instance, McAdams, of MIT, guided Du Pont in building up its chemical-engineering, research, and design capability to meet the challenge of scaling up to manufacture the new polymer product nylon.

The petrochemical industry began with a few companies—chiefly Union Carbide, Shell, Dow, and Standard Oil of New Jersey—shortly before World War II. As the epochal shift began from coal to petroleum as the basis for most chemical raw materials, these companies needed to work out continuous processing for petrochemicals just as they had earlier for petroleum. The problems involved were in some ways more challenging this time, raising questions of corrosion, complex separations, and toxic wastes and hazards.

America’s chemical industry forged ahead even during the Depression; Germany, the original pioneer, lagged behind, partly because of postwar restrictions on the European cartel. German industrialists were locked into the inflexible methods of the nation’s dyestuffs industry, which had totally dominated world markets in the late nineteenth and early twentieth centuries with approaches that now were revealing themselves as obsolete. An executive of a German company recently encapsulated the problem by complaining that “chemists can’t calculate.” He meant that many German chemists weren’t trained to comprehend process design and its integration with product manufacture. The Germans generally refused to begin to learn this lesson until well after World War II, perhaps because they were reluctant to put chemical engineers above chemists. As late as the mid-1950s a German chemical company quadrupled its output of a certain petrochemical simply by building three more process lines exactly like its first, thus avoiding all the problems of scaling up—and all the economies.

By that time, though, the major German companies and universities were finally beginning to adopt American-style engineering. As the Germans grafted the American approach onto their own strong chemical-research institutions, they became once again a major factor in the industry. Today three of the world’s top ten chemical companies are in West Germany, and the British, French, Italians, Dutch, and Swiss have also carved out very competitive industries of their own.

The demand for petrochemicals has grown spectacularly throughout the world since World War II. From 1950 to 1970 it rose in America at about two and a half times the annual rate of the gross national product, and even faster for some relatively simple, homogeneous products. Innovation had occurred before the war in many new plastics, among them styrène and polystyrene, vinyl chloride and polyvinyl’ chloride, low-density polyethylene, ethylene oxide, methacrylates, and others. After the war new opportunities arose to scale up production of all of these. At first, capacity increases were often obtained without substantially transforming the original production processes. Plant designs were simply duplicated. But costs would go down only when the scale of each reaction system was increased by using a single “train,” or chemical assembly line.

Some of the chemical companies set up internal departments to accomplish this, but many turned to a new breed of specialized contractor that could design and engineer chemical production processes. A few such firms had appeared early in the century, catering to the nascent petroleum-refining industry, chief among them Universal Oil Products and M. W. Kellogg Company. Now these specialized engineering firms (known as SEFs) multiplied and became prominent, often doing the whole job of developing manufacturing installations for major chemical companies, from process design to final construction and start-up. By the 1960s nearly three-quarters of all major new plants were the work of SEFs.

The SEFs had first begun to handle sophisticated process design and development work in the 1920s and 1930s, while the large chemical companies were concentrating on devising new products. They gained their initial expertise when the petroleum industry faced the problems of large-scale processing, and by the end of World War II the SEFs were attracting talented senior chemists and chemical engineers more easily than the big chemical companies. They gave senior personnel greater autonomy and sometimes a financial stake in the business and had the advantage of being able to exploit economies of specialization and learning by doing. Once a major new process technology or method of scaling up was developed, an SEF could reproduce it for many clients with growing experience and authority.

The development of the complete technology and plant designs for the basic building blocks of the world chemical industry—olefins and aromatics—was a triumph largely achieved by a few SEFs with names like Kellogg, Lummus, Foster Wheeler, and Stone & Webster. American-designed ethylene cracking plants seemed to sprout everywhere, and SEFs often gave them the technology to manufacture the key intermediates for their nations’ chemical industries. Latecomers to a technology benefited from the know-how that SEFs had gained with earlier clients, and so did new entrants into the industry from related fields like petroleum, paper, and metals. So the industry became extremely competitive.

The postwar maturation of the chemical-engineering field was primarily an American achievement, and not only because most of the specialized engineering firms were American. The European chemical industry had been seriously disrupted by the war and was rebuilt separately in each country; the U.S. chemical industry emerged not only unscathed but even strengthened by wartime crash programs, such as those that developed synthetic rubber and expanded facilities for petroleum refining. (Of course the most extensive crash program of all was the Manhattan Project.) The vastness of the U.S. market proved especially conducive to large-scale manufacturing as the demand for chemicals soared during the 1950s and 1960s. Because of their relatively limited national markets, European chemical producers did not at first risk setting up giant chemical plants. They simply didn’t scale up as Americans did.

So the American firms dominated the world chemical market and worked the hardest to develop new chemical technologies, which appeared in successive waves and were quickly diffused throughout the world. Among them were Scientific Design’s ethyleneoxide process for making antifreeze and polyester fibers and Sohio-Badger’s acrylonitrile process for making acrylic fibers. The proliferation of specialized engineering contractors helped promote this technological outpouring; so did the wartime sharing of information among U.S. companies, the tendency of skilled personnel in this country to change employers, and the popularity of licensing arrangements between companies.

Wherever they originated, the new chemical technologies produced widespread benefits for world consumers, thanks largely to effective competitive market mechanisms. Typically, once a new technology appeared that could reduce the cost of producing a chemical product, market incentives made it available to many producers worldwide. This was true for olefins and aromatics, for many intermediate chemicals, and for many final products, such as styrène and polystyrene, nylon, and antibiotics. Worldwide costs for chemical products fell, leading to lower prices and more accessible chemical technology for consumers.

After the oil shock of 1973 the peak of the boom was past, and the chemical industry’s annual growth rate dropped from double digits to about 5 percent. The production of large volumes of homogeneous chemicals became less important as many companies turned increasingly to specialty chemicals made for specific consumer needs. For instance, polyester fibers are now texturized and treated to permit wider use in blends; polyurethanes are made with widely varying properties for diverse end uses; more comonomers are used in tailoring the properties of polystyrene and other polymers. Overall, more attention is being given to research and development, which have grown substantially since the early 1970s throughout the industry, and innovation is being driven as much by marketing goals as by scientific discovery. However, many of the best companies, such as Dow and Monsanto, still pursue basic commodity-chemical manufacture as well as research-based specialty business.

The SEFs have declined in importance over the last decade as specialized products have become more common and growth rates have diminished. Polypropylene was virtually a commodity chemical for thirty years; now it is an array of high-value-added differentiated products, requiring much more specifically tailored manufacturing technology for its various end users. Thus an SEF can no longer serve so many clients with a single technology. A new technology like Himont’s Catalloy process can make a wide variety of plastic products without further processing after the reactor stage, but such products are likely to need continuous, flexible manufacturing systems, and the chemical engineers behind them need to be more sophisticated than ever in economics. They are more likely to work for the major chemical producers themselves, rather than for SEFs.

The trend toward more specialized products is likely to continue. The chemical industry of the future will probably incorporate a wide range of new technologies from other sectors of the economy, and most pure chemical companies may be replaced by a mixed industry whose firms are part chemical, part electrical, electronic, biotechnological, mechanical, and so on. Chemical engineers are already being trained in such broader underlying concepts as thermodynamics, kinetics, process design, and control theory.

In looking to the future, chemical engineers should remember their successes, in which they creatively approached process-design problems with close attention both to market demand and to the ongoing findings of R&D. The history of chemical engineering in America might even serve as a model for other engineering disciplines that are struggling to improve manufacturing technologies to better compete with the rest of the world.

Paul Gray, the former president of MIT, recently pointed out that “in all too many cases, design engineers in America have given too little attention to quality, reliability and manufacturability. … Walls … impede communication and cooperation between product designers and those who design and operate the manufacturing process.” To address this problem, MIT has been designing a new educational program called Leadership in Manufacturing, which brings together the institute’s engineering and business schools. Perhaps it is no coincidence that a prominent feature of this program is a series of practice schools modeled on MIT’s unique and still-flourishing Chemical Engineering Practice School.

Indeed, perhaps the United States needs to invent a really new discipline, a science of modern manufacturing, using the chemical-engineering model. It should have a strong computer-science orientation and include such topics as object-oriented design, expert systems, linear programming, project scheduling, robotics, statistical design of experiments, statistical quality control, modeling and simulation, and concurrent design and manufacturing, and it should strive to bring together manufacture with research, design, and development as did chemical engineering long ago. This task awaits our best universities and corporations. But first they will have to find a modern Warren K. Lewis.