One of the first moves of the newly formed IG Farben was to get enough shareholder control on the main companies of explosives from Germany. Thus, vertically integrated IG which until then had been their customers. Simultaneously began an international expansion, creating in the United States IG Chemical Company. But France failed its attempts to acquire, through men of straw, Kuhlmann control, the main industry sector, when the true identity of the buyers came to light. A growing concern for IG was that competition in the production of nitrate was growing. France and the United States had built their own plants Haber-Bosch, and other industrialized countries began to develop their own. The growth of global output was expected to shortly IG would have to reduce capacity and Oppau Leuna.
But Bosch's dream was to free Germany from dependence on foreign oil, using this high pressure technology and its huge coal reserves. A patriotic considerations joined the expectation of huge profits, that the spectacular growth of the automotive industry for expecting. In fact, given the increasing demand for fuel, experts predicted the imminent depletion of world oil reserves. As a result of such widespread concern, in 1924 President Calvin Coolidge created the Federal Oil Conservation Board , organization dedicated to the study and development of the sector. Finally
Bosch decided to acquire the rights to the Bergius process of converting coal into synthetic fuel. Bosch was fully aware that even that time had only been able to reproduce in the laboratory, but had full confidence in their technical capacity, in a similar way as was done with the Haber process for the production of nitrates, adapted to industrial production. There was only one problem: the cost. The price of patents, and the amount of investment would have been beyond the reach of BASF alone, there was excessive even for the accumulated resources of IG. It took the genius of Hermann Schmitz *, who had recently been appointed group finance director, to realize the acquisition, but the economic situation of IG was seriously compromised. Immediately, Bosch began building an experimental laboratory Oppau.
In order to alleviate the enormous financial burden of GI, Bosch thought of having an international partner to share research costs and the choice fell on the Standard Oil. Needed only to convince, and to this end, in the spring of 1925 Bosch sent a few senior managers to the United States to survey the interests of the oil. During the visit, which lasted several weeks, the executives mentioned, in passing, the progress that Bosch had been in the process of producing synthetic oil, and invited his colleagues to restore the visit to Germany. Thus in March 1926 Frank Howard, head of research and development, arrived in Ludwigshafen, BASF headquarters. There was so impressed by the German laboratory immediately contacted Walter C. Teagle, president of Standard Oil, which at that time was in Paris, asking him to meet with him in the following terms: "according to my observations and discussions we had today, I think this is the most important issue issue that the company has faced since its dissolution **. BASF can produce high quality gasoline from lignite and other low-quality coals. This means, absolutely, the independence of Europe in fuel supply. We can only compete on price ". Reached Ludwigshafen, Beagle was equally impressed: "did not know what research was until I got here" .
alarm Howard and Teagle was somewhat premature, because Bosch had limited time to build a few experimental furnace in Oppau Bergius. But so visible was the interest of the Standard Oil which eventually spread Bosch himself, who, throwing all caution overboard, ordered the immediate construction of a giant plant with Bergius Haber-Bosch plant in Leuna. He announced to the shareholders of IG, in the their alarm at the meeting held on September 1, 1926. But the move seemed more reasonable when, weeks later, the Federal Oil Conservation Board issued a report that announced grimly that the world's oil reserves would not last more than six years.
Teagle In August 1927, and Bosch reached an agreement for cooperation in research and development, in which the Standard is committed to building a Bergius plant for refining crude oil in Louisiana, getting half the royalties that may result from the process, if this came to fruition and to be patented. Despite the insistence Teagle, Bosch firmly retained all rights to direct production of gasoline from coal. However, only a year later, the economic situation of IG Bosch forced to rethink the situation. In this new agreement, Standard Oil acquired the patent Bergius coal conversion in fuel and operating rights in the world except Germany. In return IG obtained a 2% stake in Standard, and $ 35 million in cash. Both companies have defined their respective spheres of influence in the manner of the great powers.
After the agreement, Bosch devoted himself to another project. In order to eliminate also, the German unit of rubber, IG was working on obtaining a synthetic rubber called Buna from coal. By the time the costs were excessive, and in no way could compete with natural rubber. But Bosch expected to reduce costs by using oil instead of coal as raw material. Once again, the Standard contacted to share the costs and benefits of the project, and the agreement led to the establishment of the Joint American Study Company (JASCO)
sooner had completed agreements between IG Farben and Standard Oil as suffered a devastating blow. The Great Depression, combined with the discovery of new oil wells in Texas, led to a decline in oil prices that caused the project to get synthetic gasoline from coal are being forgotten in a corner. Similarly, even more drastic drop in the price of natural rubber made IG park buna obtaining project, which was not revitalized until the imminence of war.
* See IG Farben (3)
** Refers to the division of Standard Oil Trust in 1911 by decision of the U.S. Supreme Court.
(Pictured, Carl Bosch)
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