Byproduct Breakdown
When you hear about economic struggles involving pork or oil caused by COVID-19, it’s worth remembering that their byproducts are everywhere. Yes, everywhere.
Today in Tedium: There are a lot of things that we could talk about right now, but one thing that’s on my mind at the moment is carbon dioxide. It’s one of the most common basic materials on our planet, but in one somewhat important area, we’re running out—beverages. From sodas to beer to seltzers to Sodastreams, carbonation is suddenly in trouble because much of the supply comes to life as a byproduct of ethanol, which isn’t getting made very much at the moment because nobody is driving. Because I enjoy carbonated drinks, particularly craft beer, I have a special interest in byproducts, which I’d like to dive into a bit today. It’s a part of our supply chain that isn’t well understood, and it could be in danger right now of breaking down. In today’s Tedium, you can’t have one without the other. — Ernie @ Tedium
Thanks to Maggie K. Hedrick for the spark of basic inspiration that led to this tedious idea.
A rescheduling announcement: In part because it seems to make more sense to give people their dose of Tedium at the beginning of the weekend rather than the beginning of the workday, we’re going to try sending out our second weekly issue on Friday afternoons, rather than overnight the day before. It’s a test for the month of May, and it may not stick. Still, it’s a move Rebecca Black would embrace. Let us know what you think.
Why byproducts are often just as important as the primary product
If the industrial pork manufacturing apparatus goes kaput as a result of COVID-19, it’s going to be a lot more than bacon that’s going to eventually be hard to find.
You know those charts of animals that show how the various parts of a farm animal are used? They describe in detail specific parts of meat, but it turns out that they’re not specific enough, and elements of animals get used in all sorts of ways that you would probably not think of. For example, the fatty acids of a pig often get broken down into a variety of substances you would never think of. Like ethylene glycol, the primary ingredient of antifreeze. While you could get this material from a synthetic source, the odds are high that it might have come from an animal source like a pig.
As I wrote a few years ago, Guinness beer for many years relied on a specific type of fish bladder to filter the beer, only changing to a non-animal source back in 2017. While the increased awareness of vegan consumers has helped to encourage synthetic materials instead, those materials have to come from somewhere else.
Example: Many Nike shoes use a foam-like material that’s marketed as Lunarlon. The thing that makes Lunarlon unique is not the materials used, but how those materials are compressed into a mold to make the foam denser. The basic element of Lunarlon, a form of rubberized foam called ethylene vinyl acetate, has been used in materials from flip flops to bike saddles. It’s a synthetic material, a combination of two plastics, made from oil—just like nearly every other kind of plastic used in the modern day.
What I’m telling you is, of course, nothing new. Everything has to come from somewhere, right? But this creates a lot of economic factors worth considering when hearing about the struggles that pork processing plants or oil prices are facing against COVID-19.
It may not happen now—it may be months or years down the line—but we will eventually feel the impact of a disruption of our secondary supply chains if primary production gets disrupted. It means byproducts can’t be produced, either.
“Many industrial manufacturers have already idled their plants due to diminished demand leading to a decrease in CO2 access for industrial gas suppliers. Thus, certain industrial gas companies have been forced to ration available CO2 products amongst essential business users, including food and beverage manufacturing plants.”
— A letter from the Compressed Gas Association, the North American Beef Institute, the Brewers Association, and numerous other groups, discussing the challenges of carbon dioxide production as a result of a slowdown in ethanol production. The letter, sent to Vice President Mike Pence, makes the case for “providing federal incentives to industrial manufacturers to put manufacturing plants that result in CO2 production back into service.”
(Library of Congress)
A turn-of-the-century essay that underlined the importance of the byproduct
Now, to be clear, despite their sheer prevalence of materials derived from organic or synthetic building blocks, we often don’t give byproducts as a concept their due, despite the fact that they’re used for basically, well, everything.
I was looking to find someone who had written an ode to these materials, and I found one deep in the historic record of the Library of Congress. In an 1899 article in the Minneapolis/St. Paul African-American newspaper The Appeal, an unnamed author made the compelling case that byproducts were the greatest innovation of the 19th century, outdoing inventions by more traditional figures such as Thomas Edison.
The article essentially made the case, at length, that the capability to manufacture items into seemingly endless numbers of products was simply the greatest gift of the Industrial Revolution.
Byproducts represent the profits of many of our great manufacturing enterprises. Our meat is brought home wrapped in a by-product. We eat byproducts in soups and salads and desserts. The lime used in the building of our houses Is a byproduct from our tables. Byproducts are the comfort of upholstered chairs and keep these same chairs from falling to pieces. Even the very well-to-do cannot escape wearing byproducts, and the poor are almost entirely clothed with byproducts in winter. If we write to a friend we write on a by and the penholder, be it of wood, rubber or cork, and the mucilage on the stamp which pays the carriage of the letter to its destination are byproducts. Soon the great sheets on which we read the news of the day, as well us the paper in our billheads, will be made from a byproduct whose prospective utilization Is to bring joy to the home of every farmer.
All well and good so far. But then the next paragraph gets weird:
If you with to commit suicide and choose prussic acid or any one of a number of poisons as a means to an end, it Is a byproduct that kills you, declares the New York Press. If there were no byproducts in the slaughterhouses, your steaks and chops would cost you twice as much; if no by-products in gas-making, few of to could afford to pay our gas bills; no byproducts in the refining of petroleum, the price of lamp oil would be 2 or 3 cents more a gallon.
Moving past the part about poisoning yourself, the essay overall makes a good point. Despite being written 121 years ago, this is more or less the case today, and around the time it was being written, a story underlining his very point was being played out by one of the most famous businessmen in American history: John D. Rockefeller.
The iconic Thank You shopping bag. (via Amazon)
Five things you use every day that rely on some sort of byproduct
- Plastic shopping bags. These frequently criticized single-use bags, which have made something of a comeback in the COVID-19 era, are the byproduct of natural gas extraction, effectively reusing ethane gas that would be otherwise wasted by turning it into plastic. However, one could argue that ethane demand has outpaced natural gas, making natural gas the byproduct. (Many environmental critics certainly have.)
- Steel. This metal alloy, a key innovation of the Industrial Age, combines iron and carbon together (along with potentially other elements) to create a stronger, more resistant material. The creation of steel benefited immensely from the coal industry, however. One key byproduct of coal production, a purified carbon substance known as coke, remains widely used in steel production even today. The World Coal Association notes that 70 percent of steel production still relies on coal.
- Animal feed. Whether from animals or plants, nearly every part of our food ecosystem reuses some element of the production process in creating animal feed, which is of course used to create more animals. Ethanol production has been an emerging source of animal feed. This is a needed material that has been significantly affected by COVID-19 already, notes the website All About Feed, with supply issues being created by a mixture of supply chain disruptions and tougher export rules.
- Crayons. A key byproduct of oil production is something called paraffin, a waxy substance that has found wide use as a lubricant, in thermal printers, in candles, and as a moisturizer. But one less considered use of paraffin is as the basic wax element of crayons. When combined with a dye or pigment—as Crayola admits on their website that they do—these lumps of refined oil become something more than the sum of their parts.
- Insulin (formerly). Throughout most of the 20th century, insulin for medical use was derived as a byproduct of meat processing, with two key sources—pork and beef insulin—in wide use starting in the 1920s. This was possible because, as the National Museum of American History notes, these substances were effectively the same as human insulin. However, as synthetic alternatives emerged in the market, animal-based insulins were voluntarily discontinued, though they remain safe for human use. While the Food and Drug Administration says you can still import animal-derived insulins for personal use, they haven’t been produced in the U.S. for roughly 14 years in the case of pork and 22 years in the case of beef, and the FDA does not regulate the substances. (Other medications, such as desiccated thyroid extract, also come from animal bases.)
John D. Rockefeller, circa 1895. (via Wikimedia Commons)
How the birth of the modern oil industry set the stage for the modern takeover of byproducts
Edwin Drake, the man who created the first modern process of drilling for oil made nearly nothing from his innovation. John D. Rockefeller, on the other hand, would at the peak of his powers be worth more than Bill Gates, Jeff Bezos, Warren Buffett, and Mark Zuckerberg combined … if his oil-derived wealth accounted for inflation.
So what makes the Standard Oil founder different from the now-somewhat-forgotten Drake? It might have something to do with byproducts.
In the late 1850s, Drake, an employee of the Seneca Oil Company, came up with a process for drilling petroleum, which was then developed into kerosene, which became very popular in the latter half of the 19th century as a lamp-lighting material, replacing the then widely used whale oil.
But the process of refining kerosene created a byproduct that seemed useless at the time. Drake, for one, just threw the clear substance away, along with every other element of the petroleum that wasn’t kerosene. Often, this material would be put directly into the river, polluting the water.
He had to do something with it … right?
Many of the other oil companies that followed Drake’s tracks did the same thing. (They probably shouldn’t have; Drake, somewhat infamously, had a terrible reputation as a businessman, despite being a pioneer of a whole way of life.)
It seems crazy now that oil refiners would throw away 40 percent of their product, but that’s what happened.
Standard Oil wells near Pawee, Oklahoma. (Wikimedia Commons)
But Rockefeller didn’t do that. Rather than treating gasoline as if it was useless, he had his company, Standard Oil save it—and looked for ways to use it. As early biographer Ida Minerva Tarbell wrote of Rockefeller in 1904:
From the start his effect was tremendous. He had the frugal man’s hatred of waste and disorder, of middlemen and unnecessary manipulation, and he began a vigorous elimination of these from his business. The residuum that other refineries let run into the ground, he sold. Old iron found its way to the junk shop. He bought his oil directly from the wells. He made his own barrels. He watched and saved and contrived. The ability with which he made the smallest bargain furnishes topics to Cleveland storytellers today. Low-voiced, soft-footed, humble, knowing every point in every man’s business, he never tired until he got his wares at the lowest possible figure.
Kerosene was obviously an important part of oil’s initial success, but Rockefeller saw that there would be much more value in trying to sell every element of the oil, which came in handy when new markets emerged for the various byproducts.
From a visionary standpoint this turned out to be a stroke of brilliance, as the initial market for kerosene would be affected by electricity … but at the same time, the automobile came to prominence, making the once-discarded gasoline much more valuable. (Kerosene would later find popularity as jet engine fuel.)
Rockefeller, of course, didn’t become rich just because of his ability to identify and sell byproducts. He was an effective vertical integrator and wise about saving money where he could. He knew how to expand his empire into related fields. And of course, by the time Standard Oil was dominant, he was a ruthless businessman who was not above bribery or made-up price wars to dominate the market. At one point, Standard was so powerful that it effectively ignored the federal government’s efforts to break it up and used a legal loophole to continuing operating its business like a trust.
But one could argue the root of that power came from the ability to realize almost immediately that petroleum byproducts had immense value and should not be thrown out.
It helps, when thinking about the use of byproducts in modern life, to consider manufacturing as a series of nodes that are interconnected.
To create one product with minimal waste (or at least a more useful or valuable kind of waste), you often have to break it down to numerous elements that together create one whole industry.
But some nodes are more important than others, and many products that are generally considered important are simply codependent on the existence of other, more important products being made.
In a normal economy, this ecosystem of codependency works, in part because if one product becomes more important than another—as gasoline did to kerosene slightly more than a century ago—manufacturers can adapt their processes accordingly.
But in times like we’re seeing now—when demand crashes on some basic elements like oil and ethanol, or manufacturing runs into a forced pause for some reason as we’re seeing in the meat industry—that codependency becomes an economic threat.
You may not think of carbonation and the production of ethanol as being connected, but they are, just as crayons and gasoline share a quiet tie, and natural gas and plastic bags also share a manufacturing lineage.
We are still in relatively early days of the COVID-19 crisis, and it’s not clear how things will play out from here, but right now it matters a lot that those bigger nodes stay online, because those smaller nodes could have silent ripple effects that we may not even realize until it’s too late.
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