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This article by Wood Tate was published in U.S. 1 Newspaper on
June 10, 1998. All rights reserved.
Hydrocarbon Technologies’ Dramatic Refueling
The roads to Trenton are littered with the remains
of 19th century factories that did not survive the post industrial
economy. But in one of those properties — a collection of red
brick buildings at the edge of the Delaware & Raritan Canal and Route
1 South — lives a company that is determined to keep going. For
50 years it had been doing leading edge research and development of
fuel technologies, and when it was in danger of closing down, the
employees broke free from the parent company and bought it out.
At that point the new firm, Hydrocarbon Technologies Inc., had
experienced workers, a government contract, and a $4 million pilot
plant and laboratory, but no bank to provide a loan. To keep the plant
from closing down, president Al Comolli and three partners would have
to mortgage all their personal assets.
Four years later, Hydrocarbon Technologies Inc. (HTI) is flourishing
on New York Avenue in Lawrence. It has grown from 50 to 79 employees
and also expanded its customer base and range of technology. With
six patents pending, it has its own intellectual property. It has
built and installed a research plant in Italy, it has just bought
a specialty chemicals firm, Chemsampco, and it is on the verge of
signing a contract to help build a $1.6 billion plant in China.
Back then Comolli faced the technical challenge of fulfilling a
government contract, and he also had the personal challenge of selling
the other employees on the idea of buying into the business. Today the
engineer-turned entrepreneur has different; he must choose from among
many tantalizing business opportunities, and he must keep all of the
employee-owners headed in the right direction.
"The biggest surprise was the complexity of handling a group of
people — leading them and keeping them focused," says Comolli.
"But as a new company we have a myriad of opportunities. It is
difficult to see what directions we are going to need to go in. But
I feel we have some of the best scientists in the world here in coming
up with very new ideas — ideas which will have a definite impact
on society and the future."
The parent company, Hydrocarbon Research Inc. (HRI),
was founded by Percival Keith, who at the Manhattan Project had
uranium for atom bombs, and who then invented a coal-to gas-to liquid
fuel process. Now HTI serves as a development and testing laboratory
for government-sponsored research and for the nation’s oil refining
industry. Its specialty: commercializing technologies for converting
coal, waste plastic, and even old tires into such usable fuels as
gasoline, diesel fuel, naptha, and other light hydrocarbons that are
normally derived from crude oil.
In 1995, when Comolli first considered the revolutionary step of doing
an employee buyout, HRI consisted of 100 employees. Some were located
in a posh office in Princeton Overlook on Route 1 South, and some
worked at the $4 million proof-of-concept laboratory and pilot plant
with its landmark eight-story "gasifier," sheathed in
just north of the New York Avenue exit.
Even though breaking government contracts would mean a heavy financial
loss, the owner of HRI, Husky Oil, was ready to close the New York
Avenue plant and discharge its staff.
Al Comolli had worked there for 24 years. Though he could have taken
a retirement package and gone into consulting, most of his cohorts
could not. He asked if the facility and its contracts could be split
off into a separate company to be purchased by its employees.
"It was a big selling job," Comolli remembers. "Having
the support from the employees was a critical issue to the former
owner. Husky wanted the assurance that we would have the personnel
to fulfill the government contracts." He went around and talked
to each worker personally. "The thing that thrilled me was that
I got over 90 percent of the employees to say that they would support
Pollution at the site would be a major hurdle. Though the former owner
would assume financial responsibility for cleaning it up, working
out the cleanup with the state would be HTI’s responsibility.
"What faced us was a very large task to get this company going
and keep it going," says Comolli. "With a new company it is
difficult to borrow. Banks don’t support you unless you have been
in business for more than three years, and certainly not if you have
environmental problems. Once they hear you have an environmental
problem, they just run the other way."
The four initial major investors were Lap-Keung (Theo) Lee, David
L. Tanner, Kim J. Wright, and Comolli: "We were personally liable
to the full extent of our assets. We could have gone bankrupt,"
says Comolli. The other employees contributed by buying stock.
Forecasting the young company’s credit problem, Husky established
a $500,000 line of credit that would diminish each year and is now
zero. "It was in Husky’s interest to see that we did succeed,"
says Comolli, "and they recognized that we would need that little
extra cushion." Now HTI has its own credit line from PNC Bank.
The buck really would stop with Comolli, as president, but he
no problem in being decisive: "Throughout my career I pushed my
decision-making power to the limits. On my evaluations I was always
criticized for making decisions without consulting my boss."
So with a signature on a contract, Comolli turned into an
not of a startup. but of a going firm with 50 people depending on
him. It seemed right, a fulfillment of his father’s dream.
Comolli’s father, a stonecarver from northern Italy
who worked in New England, had always wanted to have his own business,
but he died young, of a cerebral hemorrhage, when Al was just 15.
He majored in chemical engineering at the University of Rhode Island
and then worked for Koppers, American Cyanamid, Monsanto, and the
Trenton office of Thiokol before joining HRI. He settled in Yardley
with his wife Helen, a professional artist, and saw to it that each
of three children earned a graduate degree: his son has a biology
PhD from Harvard and his daughters have degrees in music composition
As it turned out, Al’s three older siblings all have their own
— as a stonecutter, a retail shop owner, and an environmental
consultant, respectively. Now it would be his turn.
Comolli is comfortable with being the "buck stops here"
person. "I am very much alone in many regards, but I have a lot of
support. As you go through various experiences you realize you are not
always right or correct," says Comolli. "You try to look at
the downside and try to turn it into something positive." As a
stress-reducing technique he admits to doing a lot of whistling,
especially in the early morning, and he makes every attempt to not
bring his work home at night.
It seems to work. Comolli is cheerful as he confronts the dual
to keep the employees productive and to make the right business
Of the original 50 employees, eight have retired and 37 new workers
have been hired for the current total of 79. Eighty percent of these
own shares in the company. Under the current program they can allocate
up to 15 percent of their salaries to buy new shares. Since the
is privately owned, the share price is set by an outside, independent
valuation each year.
When so many employees have ownership, Comolli warns, they all feel
responsible for the company: "They give you that extra effort,
but now everyone is thinking they should be in on all the decisions.
There is much more resentment against someone who may appear to not
put in the time but may be very creative and come up with good
The solution is communication. A plan to hold meetings every three
months disintegrated under pressure of time, "but now I am back
to quarterly meetings to answer their concerns and questions."
Also, Jack Pachuta (marketing director) and Anne Berg (Comolli’s
are publishing an inhouse newspaper called The Flair. And Comolli
has started a weekly update, a voice mailbox that tells what is
with the company. Employees can dial in to get the weekly message.
Not only has this employee-owned firm managed to survive — to
everyone’s surprise it actually made a small profit in its first year
and has continued to be moderately profitable — but it has the
potential to dramatically change the future economics of the fuel
business. So much potential, in fact, that the choices are
The federal energy department is still supporting research in indirect
conversion of coal to gasoline, research that helped launch the new
venture. But the process will not be economical unless crude oil
rise substantially above present levels of $12 to $15 per barrel.
Government funding decreased to 30 percent of income last year, at
least in part due to the firm’s conscious decision to focus on
A subsidiary, Hydrocarbon Environmental Technologies Inc., specializes
in waste recovery. HTI has acquired the rights to technologies of
converting old tires and waste plastic into high-value liquid fuels.
A related process converts municipal waste into a solid fuel that
costs $4 to $10 per ton and has more heat value than coal costing
$20 per ton, says Comolli.
Under a $100,000 National Science Foundation grant, HTI engineers
are developing a new process and catalyst for producing hydrogen
which is used in many chemical processes. And the acquisition of
— to be announced this month — will complement HTI’s existing
Now based in Greenville, South Carolina, Chemsampco supplies small
quantities of unusual "specialty" chemicals and owns valuable
formulas to many of these. Chemsampco’s founder, Charles Kwiatowski,
will sit on HTI’s board but the day-to-day operations will take place
at New York Avenue, and HTI’s chemists will try to think up new uses
for these compounds. "It’s a good opportunity for our technical
manager, Albert Lang, who is a graduate of Rider, and for our young
chemists," says Comolli. "We hope to build on that foundation
and grow the company."
Contracts are signed or pending with companies and governments in
several countries. HTI engineers are currently working in Milazo,
Sicily, to erect and start up a pilot plant that HTI designed and
Although some of the current projects are confidential, Comolli
that HTI is emphasizing a contract with the Shen-hua Group in China,
which controls the fifth largest coal deposits in the world. HTI is
evaluating the use of its technology for converting coal from
deposits directly into light hydrocarbons such as gasoline, jet fuel,
and diesel fuels.
If the preliminary work continues as expected, Comolli believes that
the Shen-hua project could result in construction of a $1.6 billion
50,000 ton-per-day plant in China. (In comparison the largest direct
coal conversion plant to date is at 300 tons per day). If the project
goes ahead, HTI would team up with partners having the financial and
construction management strength to handle a project of this size.
Finally, the U.S. government contract work continues, although in
reduced scope. HTI operates a three-ton-per-day, two-stage, back-mixed
reactor system under a nearly $21 million contract with the Department
of Energy. This reactor is used to test processes and equipment
under several federal research projects for coal/oil/waste composting.
For a firm with such dramatic potential, HTI’s facilities are modest.
Most of its 40,000 square feet is in 19th century brick factory
that once housed a company that supplied the Trenton ceramics
Inside are Spartan engineering offices, laboratories full of computers
and miniature process equipment, and larger high-pressure pilot plants
used to scale up lab processes to commercial-sized installations.
The visitors’ log contains an interesting combination of American
and foreign names, all looking for solutions to their future fuel
It’s a far cry from 1946, when Percival Keith was a
chemical engineer who had worked in Los Alamos with the top secret
New Jersey team at the Manhattan Project to refine uranium for the
first atom bombs.
For HRI Keith invented an improved process using liquid oxygen and
"syngas" (synthetic gas produced from coal) to produce high
value liquid fuels. During World War II Germany had used a similar
"coal to gas to liquid" process and so had South Africa. Amoco
used it to build a plant in Brownsville, Texas, in the 1950s.
Nevertheless Keith proved to be a better engineer than entrepreneur.
In 1963 he sold the firm to Dynelectron Corp (now DynaCorp) though
the business continued under the Hydrocarbon Research Inc. name.
HRI later invented the "H-Oil" process (hydrocracking heavy
oils and tars) that is now used in a dozen plants around the world.
This process produces high-value gasoline, diesel fuel, and other
light hydrocarbons from low-value heavy crude oil and tar sands that
exist in large quantities in Canada and Venezuela.
HRI started working with the United States Bureau of Mines in 1968.
Its aim: to develop a more economical process of converting solid
coal directly into liquid fuels, such as gasoline, without going
a gas phase. HRI and Dynalectron built a 600-ton-per-day coal to
plant in Catlettsburg, Kentucky, in 1978, but following successful
trials it was shut down because it was not economical to operate at
In 1986 HRI was acquired by Husky Oil, a Canadian company controlled
by Hong Kong multi-billionaire Li Karshing. Husky was determined to
build an H-Oil plant and bought HRI to make sure that the expertise
would be available throughout the construction process. But after
the plant was finished, Husky had little interest in supporting the
kind of basic research and development being done by HRI.
When Husky looked for a buyer, the most likely was the Institute
du Petrole (IFP), a petroleum research and licensing organization
controlled by the French government. Nevertheless, most of the work
being done at New York Avenue involved United States government
contracts, many with some time to run. If the French were to take
over that plant, the United States government might have discontinued
In the end, IFP acquired the Princeton office and kept the marketing
staff, some of the administrative and engineering staff, plus most
of HRI’s patents and other intellectual property. That group is still
managed by the former HRI president, Peter C. Quinn, who is now
director of IFP North America Inc., still one of HTI’s best customers.
Says Comolli: "We want to continue in the tradition of our founder
by developing novel, efficient, and environmentally responsive
for the United States and for the world."
"I am extremely pleased with the engineering ability of the people
here in building such a first class power plant, fully automated,
and fully computerized," says Comolli. "Now that they are
stockholders, they have a further incentive to see things
, 1501 New York
Lawrenceville 08648. A.G. Comolli, president. 609-394-3102; fax,
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