Ohio Town to Fight Planned Chemical Plant

TIMES STAFF WRITER

Donald Wirtshafter, an Athens, Ohio, attorney, has a message for American Plastics and Chemicals Inc. of Canoga Park: "Go home."

Wirtshafter and others in the small Appalachian community (pop. 23,000) want the company to abandon its plans to build a chemical plant on a 2,500-acre site nearby. People in Athens are worried that toxic chemicals from the plant might leak or cause an explosion, or that trucks or rail cars might spill the substances near homes or schools.

"No matter how safe a plant is, if there should be emissions, if there should be an accident, you're talking about human lives being affected," said Athens County Commissioner Roxanne Groff.

"They can't do a damn thing to us," counters Charles Williams, American Plastics' office manager.

But Athens townspeople say there is something they can do. The community has a long history of public participation, Wirtshafter said, and it plans to be involved at every step of the permitting process. American Plastics is "going to have to jump through about 10 years of regulatory hoops," he said.

And if that doesn't work, said Robert Shostak, another local attorney, "We can sue."

American Plastics plans to build a plant that would manufacture toluene diisocyanate, or TDI, a toxic and flammable chemical compound, and possibly manufacture a related compound called methane diisocyanate, or MDI. TDI is used to make polyurethane foam, the stuff that insulates refrigerators and freezers.

But instead of making TDI from petroleum, as other companies do, American Plastics says it has a new technology for producing the compound from coal and limestone. It claims this new process is "pollution-free."

In a recent memo to Groff, Williams talked about his company's "fail-safe" method for recycling all waste products generated in the production process. American Plastics has "the only technology that can manufacture TDI or MDI without polluting the air, land, or water," he wrote.

The companies that currently make TDI in the United States are all large concerns. The biggest producer is Mobay, a subsidiary of Bayer USA, followed by Olin, BASF, Dow Chemical and ICI Americas. They all make TDI from petroleum.

Steven Bernard, a chemical industry analyst at Edward D. Jones & Co., a Maryland Heights, Mo., brokerage firm, said American Plastics' new technology still must be proved. "A lot of companies make a lot of claims, but what it comes down to is when they get it up and running," he said.

But even if the Athens residents don't stop American Plastics from building its plant, the company's lack of financial resources just might.

American Plastics was formerly Petro Oil & Gas, a Texas company that filed for Chapter 11 bankruptcy protection in 1983 and was basically a shell company when chairman H. Grant Heaton took over in 1985.

According to a resume from American Plastics, Heaton's former occupations include work as a Mormon missionary and as an executive at a Hong Kong trading company. The resume said only that Heaton conducted "business" in the Far East just prior to joining American Plastics.

Since Heaton arrived, according to documents filed with the Securities and Exchange Commission, the company has been "in a development phase" and has been financed by Hitexonics, a Hong Kong investment company. American Plastics has about eight officers and 17 other people across the country, mostly engineers, who are affiliated with the company.

In the fiscal first quarter that ended Nov. 30, American Plastics had no sales and posted a net loss of $28,370. It had just $1,294 of cash on hand. Its stock trades for less than $1 on the "pink sheets," where thinly traded stocks are listed. The company's headquarters are small, rented offices in Canoga Park, but officials say the company will be moving soon to offices near Los Angeles International Airport.

Nonetheless, American Plastics has big plans to build plants in the United States and China. Last month, it announced it had agreed to buy the Athens County site containing 20 million tons of coal reserves for $1.55 million in cash, stock and debt. Its joint venture partner in buying the land is BD Holdings, a Texas oil and gas company.

American Plastics has also formed a joint venture with Perkins Power in Sheridan, Wyo., to build a plant on Perkins-owned land. American Plastics says it has also contracted to build four TDI and MDI chemical plants in China and has letters of intent to build eight more there.

If American Plastics is going to build these plants, which could cost up to $200 million each to build, it's going to need big money. The company admits it has not yet secured the financing and will say only that it will soon announce a joint venture partnership with a Fortune 100 company, which it wouldn't identify.

William Morris, the president of BD Holdings, was identified by American Plastics as its "president-elect." But he said he is not an officer or director of American Plastics, although he was authorized to speak for American Plastics in the absence of Heaton and Ed Matovich--the chemical engineer who invented the new TDI/ MDI technology--who were in China.

Morris said American Plastics is considering three sites in Ohio for its plant, and it might decide against the Athens property after it reviews factors such as access to power, roads and rail. He said local opposition would be "a consideration" in its decision. If the plant isn't built there, Morris said, BD Holdings would drill for oil on the land.

Morris said his affiliation with American Plastics is dependent on the backing of a Fortune 100 company and on the results of tests of the new technology set to take place in the next few months.

The technology American Plastics is touting involves burning coal and limestone in a reactor to produce acetylene, which is then converted to benzene. The benzene is used to make TDI and MDI.

The company says this "closed-loop" system will use up all waste products and will even generate power that can be used to run the plant.

Morris said escrow on the Athens land would close at the end of April, and completion of a plant is at least 2 1/2 years away. He said the plant would be designed and built by Badger Design & Constructors, a subsidiary of Raytheon, a defense and industrial concern.

A Badger spokesman said Badger wasn't yet familiar with American Plastics' technology. "We're sort of standing by," he said.

Not everyone in Athens is averse to the plant, said Tim Lairson, superintendent of the Federal Hocking Local School District, which includes Athens. Lairson said some district officials are "salivating over the amount of tax dollars" the plant could generate, which could total a "conservative" $1.7 million.

But many Athens residents aren't buying American Plastics' assurances that the technology is safe and pollution free.

"You can't have processing without waste," said James Tong, a chemistry professor at Ohio University. Sandra Sleight-Brennan, a part-time teacher at the university, worries because her two children attend an elementary school two miles from the American Plastics land. "I don't want to be a guinea pig," she said.

The town of Athens is in the heart of Athens County, a lush, forested area with a population of just 58,000 spread over 484 square miles. Though the county is in northeastern Ohio, where much of the chemical and plastics industry is centered and where coal and limestone is still strip-mined, Athens has remained relatively untouched by these industries.

"There's a very militant enclave of environmentalists here," said Jim Phillips, an editor at the Athens News.

In 1977, when another company wanted to strip-mine coal on the property that American Plastics is acquiring, the Athens townspeople were defiant. Although the company secured permits to mine the land, the local people won the right to inspect the sight at any time to ensure the company was complying with regulations.

After a mishap that caused some underground water to be contaminated with acid, the company left the property without mining any coal.

Athens residents also remember a scare from 10 years ago, when a train derailed and spilled TDI in the Athens County town of Millfield. The area was evacuated, but since it was the middle of winter, the compound solidified, making the cleanup relatively easy.

Several years later, Wirtshafter said, the "back to the land" environmentalists in Athens are lawyers, scientists and educators who are well-equipped to fight American Plastics. "This community is organized and knowledgeable about what it's going to take to stop them from coming here," he said.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World
60°