1. 3. Safety, the Environment, economics
Chemical engineering 170

2. Today is all about…
CONTEXT!

3. context
In this major, you will gain scientific and technical knowledge.
Science and technology give us power, allow us to answer the question “Can we do this?”
Context is about the question “Should we do this?”
Context asks:
Is this ethical?
Is this safe?
What does this do to the environment?
Is this economical or profitable?
Can v.
Should
In the next few years, you’re going to gain a lot of scientific and technical knowledge.
This will enable you to do things.
Context asks: “Should you do those things?”
You’ve

4. Safety
Chemical engineering often involves inherently dangerous situations.
“Inherently dangerous” is actually a legal term defined by FindLaw legal dictionary as:
1. “of, relating to, or being an activity or occupation whose nature presents a risk of grave injury without the use of and sometimes despite the use of special skill and care”
2. “of, relating to, or being an instrumentality or product that poses a risk of danger stemming from its nature and not from a defect”
What kind of inherently dangerous things could you find at a chemical plant?
Toxic chemicals
Flammable or explosive chemicals
High pressures
High temperatures
And more!

5. The environment
Industrialization enables a better world in many ways.
But.
It also creates new sources of air and water pollution.

6. Case Study: So2 Fossil fuels contain sulfur
When burned (in vehicles, for electricity generation) they release SO2
As a gas, this react with water in the air, eventually producing sulfuric acid (H2SO4)
Acid collects in clouds and falls as acid rain and acid snow harming fish, soil, plants, etc.
To combat this, the US:
Established EPA air quality standards (1971)
Amendments to the Clean Air Act established an emissions trading market (1990)

7. De-Sulfurization Power plants reduced SO2 production through:
Switching to types of coal with less sulfur
Installing de-sulfurization processes (scrubbers)
SO2 scrubbers direct flue gas through a limestone (CaCO3) slurry
SO2 reacts to form solid calcium sulfite (CaSO3), removing sulfur from final emissions.
SO2 concentration in American air has dropped from ~154 ppb to ~16 ppb since 1980 (90% decrease)
The Clean Air Act (controlling SO2 and other air pollutants) has a benefit/cost ratio of about 42.
From “U.S. coal-fired power plants invested more than $30bn on scrubbers in four years.”

8. Economics are important
Costs “How many resources does this take?”
Profits: “Do people want this?”
Put it together and you get: “Is this worth it?”
Today we will learn to do some simplified economic calculations.
Doubloons

9. Costs Capital Costs Operating Costs
Initial costs of building the process
Land purchase/plant construction
Equipment purchase
Equipment delivery/installation
Day-to-day costs of running the process
Raw materials
Utilities
Labor

10. 𝐺𝑟𝑜𝑠𝑠 𝐴𝑛𝑛𝑢𝑎𝑙 𝑃𝑟𝑜𝑓𝑖𝑡=𝑅𝑒𝑣𝑒𝑛𝑢𝑒 −𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐶𝑜𝑠𝑡𝑠 −𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛
Profits
𝐺𝑟𝑜𝑠𝑠 𝐴𝑛𝑛𝑢𝑎𝑙 𝑃𝑟𝑜𝑓𝑖𝑡=𝑅𝑒𝑣𝑒𝑛𝑢𝑒 −𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐶𝑜𝑠𝑡𝑠 −𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛
Depreciation accounts for equipment becoming less valuable over time
Estimate: Depreciation = Capital Costs/Lifetime in Years
𝑁𝑒𝑡 𝐴𝑛𝑛𝑢𝑎𝑙 𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥=(1−𝜙)(𝐺𝑟𝑜𝑠𝑠 𝐴𝑛𝑛𝑢𝑎𝑙 𝑃𝑟𝑜𝑓𝑖𝑡)
NAPAT
𝜙 is fractional tax rate (current corporate rate is about 0.21)

11. Return on Investment (ROI)
𝑅𝑂𝐼= 𝑁𝐴𝑃𝐴𝑇 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐶𝑜𝑠𝑡𝑠
ROI is generally what businesses want to maximize.
What ROI justifies investing in a project?
Risk of failure?
Risk of miscalculation of market demand?
Opportunity cost? (If we spend money on this, we’re not spending it on something else)

12. Example: Solar Panel installation
What would be the ROI for installing 25-year solar panels on the roof of your business? Electricity in Utah costs around $0.10/kWh. One 4-kW solar panel covers 270 ft2. Total installation cost (includes purchase, permits,etc.) is $3.48/W. Operating costs are negligible. On average there is 4 hr/day of sun.