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Why chemicals safety could get worse, not better, over the coming years
59 Plays1 month ago
Mike, Alina, and Anthony discuss the recent Biolab fire in Georgia, examining the chemical industry's structure, how increasing sustainability and climate change pressures may impact smaller chemical businesses, and the ways companies can adapt to these challenges.
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Transcript
Podcast Introduction
00:00:10
Speaker
Hello, and welcome to Innovation Matters. It is the podcast about sustainable innovation brought to you by Lux Research. I am Anthony Schiavo, Senior Director at Lux Research. I'm joined by my two colleagues here, Alina Strugut and Mike Holman.
Host Introductions & Banter
00:00:26
Speaker
Mike released from a NYC holding cell after being forced to surrender all his devices you know in the ongoing Eric Adams probe.
00:00:37
Speaker
mike Mike, how are things in New York? you know Have you been to City Hall recently? like how how How are things going? have Have not been to City Hall. Have have not been to Istanbul. but But Falls here in New York, it it's very very nice. I'm making i'm making soup tonight. it's or What kind of soup? ah Tuscan, white bean, and kale. Tuscan, white bean, and kale. Wow. That's the plan. It sounds delicious. Martha Stewart living over here.
00:01:06
Speaker
How are you, Alina? I'm good. I'm good. It's getting chilly in Toronto, so thumping up the heat, though not too much yet. Hope that is going to be a decent winter.
Biolab Fire Incident Overview
00:01:22
Speaker
Well.
00:01:24
Speaker
Jokes aside, we have a pretty grim ah topic to talk about today, unfortunately, so this isn't going to be as much of a fun episode. We wanted to talk about, so it's it's October 10th that we're recording this, we wanted to talk about the recent fire at the Biolab facility in Conyers, Georgia. So for those who don't know, this is a major fire. It started I believe on September 29th. So that's 11 days ago at this point or ish. It
00:01:59
Speaker
I'll get into the background details of what we know happened, um but the very short version is that a large plume of chlorine-containing smoke was emitted from this facility and has continued to be emitted from this facility as you know to to this day um as far as I'm aware there's still you know 10 days 11 days later ah still a significant amount of material smoldering there's still a significant amount of material being emitted there's about 90 000 people in the affected area who have been told to in various times shelter in place or to evacuate
00:02:41
Speaker
um This is quite near Atlanta. So parts of Metro Atlanta have been affected by this. um Yeah, it's and it's it's been a pretty significant chemical safety incident. um And so we want to talk about it. We want to talk about a little bit about how it happened less so physically and more so structurally. That's pretty important to me. We want to talk about you know what this means for the chemicals industry. We want to talk about the public perspective on the chemicals industry.
00:03:10
Speaker
And, you know, in my view, not to lampshade too much, but in my view, why this kind of thing is going to happen a lot more frequently in the future. And it's not just because of climate change, although climate change will definitely play a part. um This area was affected by um Hurricane Helene. It's not really clear if that caused or contributed to this this incident at this point, um but it was part of that that affected area. So I will start you know with a little bit of background on the company. ah Bio Lab, you know it's interesting, it's one of these what I would call marginal chemical companies. right This is a company that primarily makes pool chemicals. I believe it was founded in 1973.
00:04:01
Speaker
It has been acquired and sold multiple times, right? So I think it was at one point um owned by Oh gosh, let's see. um It was bought by like, oh, so first of all, let's say start over. Founded in 1955, right? um Started doing pool chemicals in 1962. Sold to the Lanza Group in 1979.
00:04:33
Speaker
Sold off in 1996 to Great Lakes Chemical, um became Chemtura, Chemtura went bankrupt, sold off in 2014 to a company called KIK, I believe that's how it's pronounced, Consumer Products, um for about $300 million in 2014. So this is a business that's probably producing, if it's valued at $300 million, you know it's probably producing maybe $50 to $100 million dollars in revenue.
00:04:59
Speaker
and probably pretty marginal profitability. right Pool chemicals, chlorine-containing chemicals, these are um not the most profitable. They're highly commoditized. right um you know The business, it was part of when bankrupt, so that's a pretty good sign that it's not that profitable.
00:05:17
Speaker
um And, you know, KIK is one of these companies that buys up a lot of both chemical assets and also brands, right? So it's bought a number of brand and, you know, cleaning, like home cleaning product brands, again, kind of smaller marginal brands.
Chemical Analysis & System Failures
00:05:34
Speaker
It at one point licensed a deal with Clorox to do some co-licensing and produce some chemicals under the Clorox brand. um It's privately held, right?
00:05:44
Speaker
and It operates two facilities, BioLab, I should say, is part of as part of this broader KIK products company, oprahs operates two plants, one in Louisiana and one in Conyers, right? So you have this kind of marginal business that is owned by this privately held company.
00:06:02
Speaker
And the Conyers plant was opened in 20, excuse me, 1973. And it's had kind of this string of incidents. um There was a major fire in 2004. There was another major fire ah in in 2020 and then of course there was this fire recently in the last 11 days or so. um They also had a Louisiana plant they acquired in 2013. It was completely destroyed during flooding after Hurricane Laura in 2020. There was a water reactive chemical there that came into water during that flooding and burned down. um
00:06:44
Speaker
the The same water reactive chemical, TCCA, that was involved in this incident. Yeah, so ts that's probably the next thing that's talk we're talking about. Trichloroisocyanuric acid. um Kind of a scary name. Mike, I don't know how much you know about this. I was completely unfamiliar with this chemical ah before this incident. um But apparently it's commonly used as a disinfectant, algaecidin, bacteriocide, swimming pools. um It's also used in bleaching textiles.
00:07:18
Speaker
Um, it's apparently easier, um, to store than a number of other, um, you know, chlorine containing compounds, right? Yeah. And it's, a ebb yeah, this is, I wasn't super familiar with this particular chemical, but in general, like the way a lot of these, these pool chemicals work is it's something that when it's added to the water, it breaks down.
00:07:42
Speaker
ah reacts with the water breaks down to release, in this case, hypochlorous acid, some form of chlorine to to disinfect your pool. So if you add a small amount of it to a large amount of water, as in a swimming pool, you know it it it provides that that disinfection. But if you add If you have a large amount of this stuff all in one place and and water starts to get into it, you can get um a very you know violent reaction, which is which is but what happened here. So the point source start of this was actually this chemical was being stored in a facility with a water-based fire suppression system.
00:08:21
Speaker
oh right yeah so When that sprinkler system malfunctioned, it started to fire essentially. right It started spraying water onto these chemicals. It's not really clear how the chemicals were being stored, um but clearly some um amount of that water was able to get in.
00:08:40
Speaker
right Yeah, they were supposed to be stored in watertight containers, obviously, for exactly this reason. It's unclear if the containers were damaged somehow or if right if it was't they were stored improperly. But once, and certainly once it started reacting and started burning, then that further damages whatever container system it is. That also means the fire system is probably active at that point, um which basically led to this sort of runaway uh combustion of these chemicals right in this kindness facility so ah backing up for a second right engineering failures are always systemic failures right it's it's exceedingly rare for an engineering failure to occur that's like a true act of god like everything was done right and something completely unexpected or totally outside the realm of of possibility happened and and caused a
00:09:35
Speaker
an engineering failure. It's happened. There's been some incredible bad luck in history, um but it's pretty rare. It's pretty unusual. um What almost always happens is a cascading set of failures in systems that were designed to prevent this issue.
00:09:53
Speaker
And the way to think about this, there's a kind of what's called like a Swiss cheese model, right?
Regulatory Changes Post-Incident?
00:09:57
Speaker
Any system, and this can be both a physical system, like a fire suppression system, or a human system, like a corporate structure designed around safety, right, is going to have holes in it. It's going to have stuff that it misses or isn't well set up to handle.
00:10:11
Speaker
But if you stack a bunch of these systems on top of each other, like lots of little slices of Swiss cheese, those holes, you know they overlap they don't overlap with each other. right And the you get a solid piece of cheese through which nothing can pass. right All those little holes. um But if you don't have enough slices of Swiss cheese, right you can get to a situation where the holes line up.
00:10:37
Speaker
and you have a failure mode. I don't know if that's a very helpful visual representation, but that's how I was taught. But I was wondering, um do you foresee any changes in how chemical plants are designed and regulated moving forward to to mitigate this type of incidence?
00:10:56
Speaker
It's already, I would say, storing a water-reactive chemical and assist in ah in a building with a water-based fire suppression system is already a failure of a safety system. right That's already not good. right i I would look at that and I would say that's not good.
00:11:11
Speaker
and The chemicals industry, I think if you asked people in the chemicals industry, right you would say the chemicals industry has you know a safety culture. right And I think that's certainly true for name brand chemical companies. like i've been you know like you know You're big chemical companies, you're you're especially your public chemical companies. right um I think they really do have a legitimate safety culture and safety more to the point safety systems, right? ah Both physical systems, as I mentioned, but also especially the human ah organizational systems, right?
00:11:45
Speaker
where you have people reporting safety issues and those reports are followed up on and they are making systemic investments into safety, right? And, you know, down to the level of like, if you are walking up a set of stairs and you're not holding on to the handrail, someone will bark at you and be like, hold on to the handrail, you know? I've experienced this at Visibeen. I'm sure we all have, I have. Yeah, I'm sure you have too. Yeah, no, I have. right So like, those companies are, those flagship publicly traded companies are serious about safety.
00:12:15
Speaker
both you know because I think that the people there do genuinely care about it, but also because there's an understanding, large public markets, investor pressure, this is stuff they have to report in their annual and you know quarterly filings. There's an understanding that this type of investment pays for itself, right that this is a valuable investment to make.
00:12:36
Speaker
well Well, and also, I mean, there's there's been incidences over the last you know sort of decade or so at some of these large companies. it yeah You know, Lined LSL, Lubrizol, which, you know, where CEOs have left and you know ah they haven't said this and I don't have any inside information, but like people in the industry have attributed those.
00:12:56
Speaker
you know, at least partially to safety issues or concerns about the safety culture. at those guys So it's like if it's if you don't do a good job with safety, like as the the CEO could lose their job potentially. so Yeah, and there can be real consequences for the business.
00:13:11
Speaker
But the point I want to make is Biolab is this smaller company. It's this privately held company, right? It's part of this larger conglomerate. It's been bought and sold a bunch of different times. And these are the structural conditions that create this type of, that make it a lot more likely to have this type of failure, right? Because you have changing safety procedures. You have changing individuals and roles.
00:13:34
Speaker
You have a much more marginal business, ah maintaining all these layers of Swiss cheese, right? Maintaining all these different layers of safety systems. It requires people, right? And people cost money. It requires investment in the site, physical investment and in the system, right? And that costs money. So, you know, these marginal businesses are always more vulnerable to these types of failures. And one of the things I think is going to happen as the chemicals industry proceeds with its transition is that these types of businesses are going to become a lot more common, right? If you think about the, as the chemical industry transitions from its current mode of production to a more sustainable one, whether you think that's electrochemical, whether you think that's
00:14:17
Speaker
carbon capture, whether you think that's biological, you're going to have these assets, which are going to end up probably being sold off to, you know, these privately held relatively marginal companies. And their safety culture is going to get decayed as they seek to extract the sort of last remaining value out of their out of these assets, right?
00:14:46
Speaker
And so you're gonna have a lot of companies operating these these marginal assets over the next 20 years as the big companies push forward with their transition goals, right? suddenly has to happen to the existing infrastructure.
Industry Safety & Global Perspectives
00:14:57
Speaker
Some of it will be decommissioned and shut down. But like if you look at like natural gas wells, there's companies whose who exist to buy up natural gas wells at the end of their life. And their business model is based on keeping them in service for a really long time when a regular company, an ExxonMobil, would have shut them down. right And as a result of that, we know there's a lot of emissions from those wells. So you know the exact same thing is going to play out here. right So I've been running my mouth for a while. I'll pause there.
00:15:22
Speaker
It looks bleak. No matter how you put it, it looks bleak. It's not good. This is not good. It's not good. Poor tent of things to come. yeah Yeah, I guess it'll be interesting to see how it evolves. i'm i'm not I'm not convinced that you'll see this as much of this type of fragmentation. I mean, I think you'll definitely see some of the flagship chemical companies ah selling off or spinning off, you know, these kind of less sustainable, more commodity type of type of chemicals as they as they look to transition. um But I think in some sectors of the industry, I mean, like chloroquine chemicals, that's that's a benefit that really that's a segment that really does benefit from economies of scale. So I still think a lot of these type of assets will end up in in larger companies, which will be
00:16:16
Speaker
you know they won't be super sustainable maybe in in most ways because these are very, you know ah not the kind of things that you can you can transition to making um you know through fermentation or something or something like that. But um you know some of these these types of assets I do still think will be owned by by larger companies that'll have some of the same type of incentives that you're that you're describing for for having maintaining more of that safety culture.
00:16:45
Speaker
ah Sure. And I think, you know, the era of, it's not a surprise to me that this facility, this communist facility was built in 1973, right? like but Right. yeah Yeah. The era of small scale chemicals manufacturing, especially in the United States, is over, right, to a large extent. um We're not, there's not a ton of people who are starting new chemicals production facilities with 100 people the way BioLab was. You know what I mean? um yeah it's It's the large companies building new facilities and those tend to be large state-of-the-art facilities. right
00:17:21
Speaker
But globally, there's a lot of there's plenty of small-scale chemical production sites in Southeast Asia, in China, you know in different parts of the world, in Africa, you know I think increasingly. As the economies there grow, you'll see this. So like these types of marginal facilities are are continuing to be built. And especially in China, I think you're going to see a lot of this type of issue. There's going to be a lot of marginal facilities that are going to need to be shut down.
00:17:50
Speaker
like There's already been a large a lot of marginal chemical production in China that's that's gone by the wayside in various not so great ways. ah Yeah, I mean, and you've seen, ah but I do think that's something that China is is aware of. And you'll see, I mean, for instance, if you look at the lead lead acid battery industry, like China has kind of systematically shut down a lot of the smaller, you know, more marginal producers of of lead acid batteries and yeah because of these environmental concerns there. Yeah. When I was in Singapore, there was a huge crackdown on the paint industry and especially on smaller marginal producers, right?
00:18:27
Speaker
um But yeah, I mean, these are all these smaller, these, these, these marginal producers, they tend to be the vector for a lot of these issues. And I do think, I mean, like, I know there's some disagreement or Mike, you know, you're not as on board with me as this, but like, I don't think there'll be more of these types of producers and more of these types of marginal assets um going forward. Yeah, I think more more so in emerging economies, as as you were saying, but.
00:18:54
Speaker
Yeah, it's definitely. And I think, you know, you you mentioned the the climate angle for this as well. We don't know if Helene played any role in um in this particular incident, but we do know that hurricane, I think you said it was Laura, right, was the cause of one of the two major previous incidents, or the last, the last, that BILAP has also had in the last few years. There was a, you know, a big, big disaster at an Archima plant that was due to Hurricane Harvey, I think it was. so you know especially with so much of the US chemical infrastructure concentrated on the Gulf Coast, if you you know if we are seeing more frequent, more intense storms as the you know as the Gulf warms, that's that's definitely something that's also gonna contribute to to more of these more incidents around chemical facilities.
00:19:50
Speaker
So Alina, I wanted to open it up to you. um I know you this is chemical safety broadly is something that I know your team has looked at quite often. And I guess I'm just curious to what your reaction is to this whole discussion and then how you're thinking about this this space.
00:20:07
Speaker
Yes, of course. So when it comes to ah consumers, I would say that it's more about chemical anxiety that chemical than chemical safety. And there's this anxiety of ah invisible threats. And it's invisible threats that are posing risks to their health, their family's health, the health of the planet. And ah from the consumer perspective, there is this also
00:20:39
Speaker
emerging threat as natural calamities like hurricanes are becoming the new norm. So these threats are seen as more imminent, especially for people who live in the proximity of this plant. ah For them, it's it's more of an existential anxiety. It's ah it's constantly being on edge.
00:20:59
Speaker
But and and on top of that, and of course,
Consumer Concerns & Transparency
00:21:02
Speaker
there's a lot of expectations that consumers are having when it comes to um businesses handling hazardous chemicals. So they have expectations about and them stepping up their safety game, um about having strong safety protocols in place like reinforcing infrastructure to prevent leaks during disasters.
00:21:26
Speaker
But aside from that, there's also this worry about chemicals in everyday products, like personal care, cleaning products, even food. So there's this anxiety about what they're putting in their bodies. Do they know what they're putting in and on their bodies, what they're washing their kids with?
00:21:48
Speaker
And while accidental chemical plants make the headlines, there's often a lot of silence from the government or from from the media around the potential dangers in everyday product and the chemicals that are carried with those. And for example, there's a lot of anxiety about endocrine disruptors, chemicals like parabens, phthalates, BPAs, which are found to interfere with the hormonal system, and they're potentially leading to developmental, reproductive, immune issues. so There's a lot of anxiety on carcinogen. ah Some of these chemicals like formaldehyde, aspartame, nitrides are classified as known carcinogen, so meaning that long-term exposure could increase the risk of cancer. So what consumers are doing
00:22:45
Speaker
um Rather than just being passively worried, they ask for more transparency from both governments and corporations. So they're increasingly looking to understand the chemicals beyond what's just written on labels.
00:22:59
Speaker
We spoke in ah in previous webinars how um they're taking things into their own hands. They're doing deep research. they're They're navigating the complex world of chemical ingredients just to to get to the truth. right There's this fear that companies are not telling us what we need to know. right and They're hiding the truth from us, so I got to get to the truth.
00:23:22
Speaker
so and With this concept, growing demand for honesty, clearer information about what they're being exposed to in the everyday. Yeah, I think it's interesting you brought up this idea of transparency because you know one of the things that we see sort of mixing or that I see mixing with this this issue is conspiratorial thinking, right? There is a lot of conspiratorial thinking around the East Palestine.
00:23:50
Speaker
derailment. There was a lot of cons conspiracy i mean conspiratorial thinking is just broadly on the rise in America. And you've already seen um a lot of conspiratorial thinking and conspiratorial posting on social media, for example, surrounding this fire. And I think I mean, part of that is like, hey, like,
00:24:09
Speaker
They're not telling us what's in the smoke. like That's like genuinely like true. you know And um I think in part because they don't fully know what's in the smoke. you know But like there's a lot of of very legitimate sort of fear and concern and anger.
00:24:27
Speaker
um In this community and sort of in the surrounding area, you know and The the response of this company is inadequate in part because it's just not equipped right like This company by lab. Like I said, it's this privately held company It's this pretty marginal chemicals company and even a major chemical company is not equipped to provide this kind of large-scale support to you know 90,000 people who have been affected by this right and it's not clear what the level of impact will be. like I mean, chlorine concentrations have been at various points over the EPA's limits. you know that I think the EPA's limit for evacuation or for action is half a part per million per hour average. And it's been like 1.5 parts per million at various points around in various communities around the area. So like that's bad. like That's a bad level of chlorine.
00:25:22
Speaker
to have in the air, you don't want to be breathing this stuff in. But you also see people saying, oh, this is, you know, big government. They're trying to, you know, take our land. They they're trying to do something. There's a cover up. They were making, you know, weapon. You just see all this crazy stuff. Right. and And it's part of the broader information milieu that we live in. But again, it's going to only be sort of intensified by Things like climate change, right where there's a lot of conspiratorial thinking and the the extreme weather events where there's been a lot of conspiratorial thinking. Have you looked into this type of conspiratorial thinking and like how do you head that off? Is it even possible to head off in this day and age?
00:26:06
Speaker
Yes, yes, absolutely. um Educating consumer is a major part of it. So this this plays into marketing strategies, right? That could focus on educating consumers through engaging content, sorry, engaging content, think ah videos, infographics, blogs even, about about the risks and safety protocols related to chemical plants.
00:26:30
Speaker
um There's also um marketing campaigns that emphasize safety measures, but looking more into CPG and the everyday chemicals found in product.
00:26:43
Speaker
um They could use educational marketing to teach consumers about the risks and how products address how the chemical seen their address ah sorry and how their product risk those ah risks.
00:26:58
Speaker
um They could go get endorsements from experts just to improve credibility. um They could ah be clearly showcasing ingredients list and their safety on websites, on packaging,
00:27:14
Speaker
ah Think about, for example, the ordinary, right? So in the clean beauty industry, there was for a while this move away from natural, all natural, eco-friendly ingredients. And consumers ah were seeing that those are not the effective enough. They're not efficient enough. So they're willing, they started to ah embrace ah active ingredients that are not of natural origin into their skincare just by ah because they were informed, right? So the ordinary ah publishes a lot of information on the the active ingredients that they're using and the exact therapeutic or the exact benefits that it will have on your skin. And this help consumers gain trust.
00:27:58
Speaker
right it's It's all about trusting that that company is um is telling you what you need to know and is working with you to ah to to help you meet your goal.
Regulation Challenges & Company Responses
00:28:09
Speaker
right um and Another way would be engaging with online communities around chemical safety just to build this loyalty and also partnering with influencers who are trusted in this space. right that's That's another opportunity.
00:28:25
Speaker
just to yeah just to nip in the butt the the conspiratorial Basically, it seems like what you're saying is, especially in the context of something like this, you know once the incident has occurred, like the window is already closed. It seems like you know you really have to lay yeah lay a groundwork for your messaging before and build a a relationship with trust. It's interesting that comparing this to something like nuclear, communities who live near nuclear plants um have like the highest favorability rating for them. like
00:29:01
Speaker
Like people who live near nuclear plants have like I think like a 90% or like an 85% favorability rating towards nuclear Because they've been educated first of all, they've been they know and they know it's safe and they also like hey They like work there. They know people who work there. and There's these network relationships. I Somehow don't think that's true for chemicals industries. I mean, I certainly do for chemicals industries, especially if you have Aside from this, I think there's also opportunities so for innovation. So aside from marketing, right? Think about new product for new nations. I think about green chemistry. We talked about green nickel in the other podcast. Yeah, I think that i with
00:29:46
Speaker
you know this is i I would, as as as somebody in the industry, worry a bit about conspiracy theories and things like that, but I think i think this is and is and is an area where the kind of the real risks. I mean, in in terms of the the safety of chemical facilities, right, as opposed to the, you know, the safety of the chemicals in in consumer products. yeah um I think this is an area where I'd be much more worried about the real risks and the actual disasters than about, ah um and preventing those than than about yeah combating conspiracy theories. so so I was was kind of messing around with this on the the mode of AI.
00:30:26
Speaker
tool that we have And if you ask what how do consumers think about the risks of chemicals and the products they use, you know, as Alina was describing, right? the the that That's a very salient issue. It's extremely high on the maturity curve, right? Well into the established ideas like 60, 70% consensus around that. If you ask instead about, you know, how do consumers think about chemical spills and and the the context of of this sort of thing? it's it's you know it's it's definitely there, but it's a much less mature, it's kind of in the earlier stage, 10% sort of consensus ah around around those those topics. so
00:31:07
Speaker
um But yeah a if there are more incidents like this, then it's it's definitely, I'm sure that will raise the salience of it. And I don't know if you you see Alina, I mean, there was the East Palestine, um Ohio,
00:31:22
Speaker
the incident with the train derailment where there's a lot of vinyl chloride, so a big fire and environmental disaster from that that was a lot in the news over the last couple of years. I don't know if you see things like that starting to increase the salience of this for the public. Yeah. For the record, I do think the actual issues of chemical safety are materially more important for industry than the conspiratorial stuff.
00:31:51
Speaker
I just think it's it's interesting and also problematic. you know The conspiratorial stuff can make the response more challenging when an incident does occur. but I was wondering if we could talk a little bit about the the regulations in this sector. You said that we would come back to it. That's the question. it this is It's hard to know right um you know like exactly what the deal is.
00:32:20
Speaker
so the the According to the BioLab website, they were stored in sacks, large industrial grade bags. this has been you know This is an industry standard. It's not clear if the bags were in good condition and failed, you know got wet and allowed water to pass through.
00:32:42
Speaker
It's not clear if there's regulations that would have should have precluded the storage of these bags in this facility with this water-based fire suppression system. It's not clear if there were regulatory failures or the company was not following regulatory procedures in its storage, like having loose material out or having ripped bags.
Future of Chemical Industry
00:33:03
Speaker
We're really not going to know um what The situation is until we get a comprehensive report from um you know the the chemical safety board. right and And at that point, we can really say,
00:33:20
Speaker
um hey, like this this was really a function of a failure to follow existing regulations. And that would have been sufficient to prevent this, or if if more regulations are sufficient. We really won't know for for a while.
00:33:37
Speaker
um Yeah, I mean, and and but you know, if the if the thesis about more of these sort of marginal facilities is is true, then there would need to be more probably active regulations. these So i look one of the articles, the fire suppression system, right, you mentioned they had these sprinklers. You know, one of the articles I read was saying there was an expert quoted was saying, you know, they really should have had instead of a sprinkler system, a deluge system, which which was more effective.
00:34:05
Speaker
for these type of water sensitive chemicals, um but it's more it's it's more expensive, right? So naturally this kind of, and it's, it's your you you're required to have some type of fire suppression system, but the regulation doesn't, you know.
00:34:20
Speaker
allows you to use a sprinkler and doesn't require the you know the more effective but more expensive system. So maybe in the future it should or it will need to um if we we do start seeing more of these these type of incidents. Based on your knowledge and your experience, how chemical plant how do how do they adjust after such accident? And what What steps are they taking to improve their safety system? what What are the key lessons that the industry should learn from this type of incident? I mean, this facility has been destroyed, right? Like the warehouse, and wait like that warehouse burned out, it's collapsed. It's literally going to be happening from the ground up. I mean, I think there's a lot you can do. um The question is,
00:35:13
Speaker
You know, change often precipitates through regulation, right? like you have or Or the threat of regulation, the looming sort of knowledge of regulation. Like you can look at PFAS as a good example of this. Once the writing on the wall became clear for PFAS in 2005, like the chemical industry voluntarily shut down production in the United States, more or less. They would have been forced to shut it down.
00:35:41
Speaker
eventually. And they just sort of knew that, hey, this isn't going to work anymore. um So that's like obviously sort of a dramatic. but But once it becomes clear that this is going to be an issue, it makes sense to get ahead of it. Both from a practical perspective, just let's just spend the money now. It's better to spend it now than have to be forced to spend it later. It's also a good look. Like, oh, yeah, we're we were well ahead of the regulations you know um because we care.
00:36:08
Speaker
Well, and they may also end up being forced to buy, one, potentially, as you said, investors, but also insurance companies. If you have a few more incidents like this, that insurance company isn't going to be like, all right, we're not going to insure your facility or we're going to charge you far higher premiums unless you install this higher quality fire suppression systems or whatever other changes might need to be made.
00:36:31
Speaker
And the you know the insurance companies, they're the the the people in the insurance industry and who who specialize in insuring these type of facilities are often like very knowledgeable about what the right types of safety systems are and and can be quite active and in that the facilities that they that they do have are are sort of fully up to so to snuff, using using the premiums as the ah sort of the hammer there.
00:36:56
Speaker
But yeah, I guess it maybe just as a last question, I mean, from an in an innovation standpoint, right? to what what are the What are the lessons that that we would would would take from this, right? I mean, you couldn't say, oh, we should be innovating on better fire suppression systems or something like that, and I'm sure.
00:37:11
Speaker
Sure, there are are are people that are that are doing that, but I think there is we're going to see this sort of thing as as well as the general sort of concern about chemicals in products.
00:37:27
Speaker
ah be i mean I think we're already seeing it, but I think we'll continue to see that be one of the factors that do push more companies to explore these alternative production methods where they can you know using you know getting into like bio-based chemicals. I mean, Anthony, you've you've written and talked about how you know concerned about microplastics is is something that's going to um push more companies to towards different different types of plastics, compostable bio plastics.
00:37:55
Speaker
and things like that. so I definitely think that or that whole broader issue of chemical safety is is something that's going to to push more more people in the industry to be exploring new new chemical compositions and new you know new polymers, new new molecules. Yeah, i mean I think it will. I think it's just one of those things where the costs of doing this type of existing chemistry are going to continue to rise. right And that's one of the things we've talked about a lot with our with our clients is you know the costs of
Innovations in Chemical Safety Products
00:38:28
Speaker
chemical. like If you look at like some basic chemical production, like ammonia is a good example. right The cost of production of ammonia has consistently been dropping over the last 100 years, right basically, since the process was invented. It's been optimized and optimized and optimized and optimized.
00:38:42
Speaker
um But for a lot of reasons, we're probably gonna see that trend reverse, right? First of all, you know the production of these very established chemicals like chlorine has been optimized to the point that there's not a ton of juice left to optimize, right? um Like something like ammonia, they're in spitting distance of the theoretical efficiency of production, like the theoretical limit, I should say, of efficient production, right? So it's not like you can optimize it that much more.
00:39:09
Speaker
And then you have all these additional factors that are going to increase your costs, right? Increased chemical safety regulation, increased cost of insurance, right? um Potentially if you are located in an area that is increasingly vulnerable to climate change, you have increased costs there. So a big part of the story here is not just that the new things are going to be developed um and become more competitive over time, it's that the the existing products are going to become less competitive over time. And I think that's what people fail always sort of fail to grasp or fail to.
00:39:41
Speaker
fail to get, they look at the existing ah products and they say, well, there's no way this this you know new polymer or this new thing could ever be as cost competitive as you know where this thing is today, right where this this established product is today. And it's like, first of all, maybe it can. But second of all, you know like it is going to get more expensive to to do this. You can look at coal power in the US as an example of this. where it would cost you A lot of these coal plants are nearing the end of their life. It would cost billions to keep them running. and
00:40:13
Speaker
Companies don't want to make that investment, right? They're thinking about, okay, how do we either transition a nuclear or something, right? Which isn't actually that good of an idea or just, you know, we'll just shut these coal plants down or replace it with ideally solar, you know, frequently natural gas as well. So, you know, you're going to see a lot of that happen with the chemicals industry, I think, as well. And I think that's something that people underestimate it a lot um because it can look like everything's sort of going to just keep on going forever until all of a sudden it isn't.
Closing Remarks & Resources
00:40:45
Speaker
Also, from ah from the consumer perspective, there's there's a few innovation opportunities. um so Given the anxiety over exposure to hazardous material, there's this consumer desire to see better detection systems for home, ah for personal devices that can alert users of of the presence of hazardous materials in the air. or particularly following a chemical plant accident. right ah There's also opportunity to to develop community-focused mobile apps that provides real-time updates on chemical plant statuses, the risks, the safety measures, um and potentially linking this with emergency services for immediate response. and Of course, there's also the hope for chemical neutralizing compounds or technologies
00:41:40
Speaker
that that can be rapidly deployed in the event of a spill and um just to minimize the environmental and the personal health risks. And then when you look at CPG and chemicals in ah in personal um care use products,
00:42:00
Speaker
ah Think about packaging. right A lot of innovation can be done about packaging and taking out the those chemicals or biodegradable packaging or minimal packaging or no packaging at all ah would be would be appreciated by consumers. Green chemistry, right um which might include making products that break down harmlessly over time or using renewable materials.
00:42:30
Speaker
So yeah, by investing in these companies can can lead the way in eco-friendly solutions and more and more consumers are looking for that. Okay. I think we'll leave it there. I'm sure you've enjoyed this uplifting episode of the Innovation Matters podcast. hu If you want to hear more, you can check out our podcasts. We're on Spotify, Apple podcast.
00:42:55
Speaker
You can like, you can subscribe, you can leave a rating. That helps us out. We have a lot of other resources. We're on LinkedIn. We have the Innovation Matters newsletter. We're on the blog, www.luxresearchinc.com. Check it out. And yeah, thanks so much. We're everywhere. We're everywhere.
00:43:12
Speaker
Innovation Matters is a production of Lux Research, the leading sustainable innovation research and advisory firm. You can follow this podcast on Apple Music, Spotify, or wherever you get your podcasts. If you want more, check out www.luxresearchinc dot.com slash blog for all the latest news, opinions, and articles. so