What HTI Does

Early Difficulties

Comolli’s Bio

Acquisition: Chemsampco

Company History

Corrections or additions?

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."

Top Of Page
What HTI Does

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."

Top Of Page
Early Difficulties

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.

Top Of Page
Comolli’s Bio

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

and theater.

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


Top Of Page
Acquisition: Chemsampco

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

processing needs.

Top Of Page
Company History

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

the time.

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


Hydrocarbon Technologies Inc.

, 1501 New York


Lawrenceville 08648. A.G. Comolli, president. 609-394-3102; fax,


E-mail: marketing@hting.com. Hhttp://www.htinj.com.

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