Blaming huge legal bills, including a $950 million class-action polybutylene pipe settlement, Shell Oil Co., the only domestic maker of the resin, has told U.S. customers it will stop supplying PB pipe resin after April 16. Because there are no other major sources of resin, Shell's decision could sound the death knell for PB plumbing in the United States. The flexible gray pipe, installed in a system with plastic acetal fittings, sprung leaks nationwide, causing a pub-lic relations nightmare and a jackpot for lawyers.
Effective April 16, Shell will no longer sell any PB pipe resins in the United States. Pipe is the major consumer of PB. A Shell spokeswoman said the firm still will make other grades of the resin for blow molding, injection molding and other processes.
The move, not totally unexpected given PB pipe's problems, spread quickly. Houston-based Shell announced the news in January to its two major pipe extruders pipe makers, U.S. Brass of Commerce, Texas, and Vanguard Plastics Inc. of McPherson, Kan., who are switching to cross-linked polyethylene pipe.
In 1994, lawsuits over leaking PB pipe systems forced U.S. Brass to file for reorganization under Chapter 11 of the U.S. Bankruptcy Code. U.S. Brass is part of Eljer Industries, a public company that owns U.S. Brass through its Eljer Manufacturing Inc. subsidiary.
U.S. Brass already has started extruding XLPE pipe. Vanguard plans to begin production in the near future. The pipe, more widely used in Europe than the United States, is used for drinking water and underfloor heating systems.
``We're in a position to begin supplying product immediately,'' said Jim Harris, president of Eljer Manufacturing. ``We will still be in the flexible plumbing business.'' XLPE pipe is being made at plants in Commerce and Elkhart, Ind.
``We're forced to get out of polybutylene,'' Harris said. ``It was our intention to stay in the polybutylene business, but since we can't purchase the resin after April 16, we will be making the transition to [XLPE].''
He declined to say how many XLPE pipe machines the company is running.
Vanguard Plastics President Keith Swinehart said Vanguard, which runs plants in McPherson and Beaufort, S.C., has enough resin stocked to last through the summer. Vanguard will be able to source some resin from Japan, but not in big enough quanities to continue current production, Swinehart said.
``We didn't actually anticipate that they [Shell] would get out of the business, but it was a possibility. And we had to prepare for the possibility,'' he said.
The closely held Vanguard is in firm financial footing, and has diversified into other types of pipe, he said.
``We make CPVC [chlorinated PVC], and we have for some time, which is suitable for hot and cold water plumbing and has been used since 1969. We've been developing a [XLPE] system as a replacement, and expect to have that in production very soon. We think that a transition can be made with the [XLPE] because it is a flexible product, without too much disruption to the existing market,'' he said.
If the Shell announcement does indeed signal the end for U.S. PB plumbing, the beginning of the end was a massive $950 million settlement announced Nov. 8. Shell and Hoechst Celanese Corp., which supplied acetal resin for injection molded pipe fittings, settled with millions of homeowners.