political developments, will be taken into account.

Such developments center pri­marily on the availability and cost of naphtha and gas oil, the main sources of olefins in Western Europe. Naphtha prices on the Rotterdam spot market have soared. They are now about $350 per metric ton, about double their level a year ago.

The effect of the increasing spot market price is to raise the value of the feedstock when contracts are due for renewal. According to BASF chairman Matthias Seefelder, the company's operation at Antwerp, Belgium, and at Ludwigshafen will face additional costs of up to $325 million this year solely because of the higher prices of oil fractions and the petrochemicals derived from them.

Seefelder is enthusiastic about the prospects of what has come to be termed C-l chemistry as an alternate route to petrochemicals. He envi­sions the use of coal gasification products as a source of methanol. Using a zeolite catalyst BASF chem­ists have been working on, this would be converted to dimethyl ether, which, in turn, would lead to ethylene by what amounts to a dehydration step. Propylene and C4 olefins also would be formed in varying amounts depending on reaction conditions.

Even if BASF's pilot-plant studies are an unqualified success, it won't mean that oil fractions will be dis­placed completely as a petrochemi­cals source in Europe. On the other hand, it's encouraging to expect that the vast array of materials that have come to be considered essentials might be derived from a feedstock other than oil. •

Saudis may help end Corco's bankruptcy After more than a year of complex negotiations, long-beleaguered Commonwealth Oil Refining Co. (Corco) and Arabian Seaoil Corp. (ASC) have worked out terms that could lead the Puerto Rican oil and chemical firm out of bankruptcy. ASC represents a group of Saudi Arabian private investors, headed by Roger E. Tamraz.

Under the negotiated terms, Corco would emerge with a new four-way ownership, up to $130 million in fresh capital, and a secure supply of crude oil at standard market prices. With the issuance of new stock, Corco would wind up with about 26% of its common stock owned by ASC on a fully diluted basis, 26% by the public, and the remaining 48% by creditors and the current major owner, Tesoro

Arabian investors will provide Corco wii

Petroleum of San Antonio. By com­parison, current ownership is 37% by Tesoro and the rest by the public.

There are still a lot of hurdles be­fore the plan, filed with Corco's bankruptcy court in San Antonio, can be worked out. These include defini­tive agreements with lenders and business creditors, the resolution of claims against Corco by joint venture partners PPG Industries and W. R. Grace, and confirmation of Corco's new plan by the court.

Under the plan, says Corco chair­man C. Howard Hardesty, ASC would invest $70 million in Corco, arrange a line of credit of at least $60

Redefined government r< Government needs to take a new ap­proach to its involvement in the na­tion's economic system, says the Committee for Economic Develop­ment (CED). Recommendations for such an approach are part of a new statement from the committee.

The lengthy statement, "Redefin­ing Government's Role in the Market System," stems from two years of re­search and study by CED subcom­mittees. CED is a private, nonpart­isan research and education organi­zation. Its 200 trustees are mostly top corporate executives or university presidents.

"We are concerned," says the statement, "that the largely unguided growth of government involvement in the economic system is threatening the achievement of this nation's eco­nomic and social goals."

Excessive government actions, CED says, have imposed enormous costs on the economy, contributed to inflation, reduced productivity, and retarded economic growth. In light of this situation, the committee calls for a comprehensive system of screening and evaluation for a wide range of government activities, including regulation, direct expenditures,

$130 million and a steady supply of oil

million more, and arrange to supply Corco with 100,000 bbl of crude oil daily at competitive prices and nor­mal credit terms. The crude oil ar­rangement is especially important, since Corco has depended largely on the volatile spot market for raw ma­terials. In return, ASC would receive $50 million in debt securities from Corco and about 13.4 million shares of special common stock.

Corco's creditors would receive several types of compensation, in­cluding cash and a combination of cash, stock, and notes. Also, payments on Corco's convertible debentures would be brought up to date. •

e in market urged subsidies, loans, and loan guar­antees.

Specifically, CED urges that gov­ernment take a three-part approach to formulating policy:

• Set criteria. Any proposed action should be subject to a set of screening questions to determine if government action is required to correct a market limitation or to achieve a desired economic or social goal. And if it is, the action should be both feasible and cost effective.

• Establish goals. If government action is needed, each proposed ac­tion should include a clear statement of objectives and anticipated results. The type of action chosen should en­courage the greatest possible reliance on the market system. And all major policy decisions should spell out why a particular method was chosen.

• Evaluate results. The Adminis­tration, Congress, and independent regulatory agencies should develop methods for assessing the imple­mentation and effectiveness of major programs.

The statement is available from CED, 477 Madison Ave., New York, N.Y. 10022, at $5.00 per copy (pa-perbound) or $6.50 (hardbound). •

6 C&EN July 30, 1979