Thursday, January 23, 2025

What's the red stuff dropped on wildfires?

It's Perimeter Solutions' flagship product
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New fires in the Los Angeles area are prompting more residents to evacuate. Today Austin Carr writes about some of the crews working behind the scenes to reduce the threat to people and property. Plus: The future for green stocks, and the gas station chain that's a tourist trap and an economic engine. If this email was forwarded to you, click here to sign up.

To counter the wind-whipped blazes throughout Southern California this month, Perimeter Solutions Inc. has churned out tons and tons of Phos-Chek MVP-Fx. You may not recognize the name of Perimeter's flagship product, but you'd surely recognize its color: that chalky red slurry dropping from humongous planes to stop the wildfires' spread around Los Angeles.

While the aerial acrobatics of firefighting pilots has rightfully captured the public's attention, a logistical ballet on the ground is what's keeping these airdrops flowing. Perimeter, the dominant provider of chemical retardants, had to ramp up Phos-Chek production to 12 hours a day, seven days a week, and oversee complex distribution to a slew of air-attack bases. "I've been in the business since 1991 and have never seen anything like this, especially in the month of January," Chief Operating Officer Shannon Horn says.

A firefighting aircraft drops Phos-Chek near homes during the Palisades Fire on Jan. 10. Photographer: Mario Tama/Getty Images

For a Bloomberg Businessweek profile in 2021, I spent time with Perimeter's team at one of these air-attack bases in California, where pilots, firefighters and other operation crews were training for the worst consequences of red flag events. Naïvely, I just assumed Phos-Chek was magically available, like a battery recharger. But a huge amount of work happens behind the scenes to ensure resupplies are at the ready, from manufacturing plants in places like Rancho Cucamonga and Sacramento to on-site support services at 74 bases, mostly in the western US.

The key ingredient in Phos-Chek is ammonium phosphate, a combustion-inhibiting salt. It's produced as a powder and shipped in bulk, usually in big trailers or 2,000-pound "Phos-bins" or "super sacks." Once delivered to the air-attack bases, the powder is dumped into massive batch mixers that swirl the retardant around with water until it's at the right gummy viscosity.

Depending on their mixing-system size, Perimeter's "mix masters" can make between 18,500 and 30,000 gallons per hour at each base, where tarmacs are often stained maroon. (During my visit to one, I remember thinking it looked like Perimeter workers were making a giant vat of Hawaiian Punch.) Next, the Phos-Chek is piped to airtankers and other planes. "It's like a full-service gas station," Horn says. "We mix it, load it, put it on the aircraft, and off they go, unload and return."

Phos-Chek isn't designed to drop on flames directly. Rather, it helps contain fires, streaking around them to cut off or slow their spread. The reddish hue—like disintegrated terra-cotta or what some might even call pink—helps pilots see previous airdrop lines and determine where to discharge the next batch. Perimeter has tested blue and white alternatives, but bright red has proved the most visible from above. Technically, it's referred to as a "fugitive colored retardant," meaning it's formulated to fade away over time with enough exposure to sun and precipitation.

Leading up to this month's fires, Horn says government agencies were wise to keep more bases open in light of California's extensive drought. But it wasn't enough for the infernos that followed, and it took time to mobilize larger counterattacks. "Unfortunately, there just wasn't enough resources quick enough to get into some of these areas with the high winds—Mother Nature just was not allowing us to do what we could do typically with Cal Fire and the US Forest Service," Horn says. "It was very, very tragic."

The company has invested significantly in faster response times, but its long-term hope is that the country will recognize the need for more preventive solutions, such as applying retardants and suppressants before the start of the fire season in high-risk areas. "It's a challenge to proactively get people to spend the money before the smoke is in the air," Horn says.

With fires in the Pacific Palisades and Altadena areas increasingly contained and rain finally expected for the weekend, Perimeter had reduced its manufacturing. But then new wildfires erupted yesterday and today around LA, signaling the catastrophe is far from over. Perimeter says it's fully prepared to scale Phos-Chek production back up to meet the operational demands.

In Brief

The Case for Optimism Around Green Tech

Illustration: Alëna Skarina for Bloomberg Businessweek

The last time Donald Trump was in the White House, ultra-low interest rates helped green stocks quadruple in value, with a particularly strong surge after Joe Biden won the 2020 election. Jubilant investors rightly expected the incoming president, a champion of clean energy, to enact a raft of climate-friendly policies, lifting the industry to new heights. But around the time Biden took the oath of office in January 2021 the euphoria subsided, and shares of companies in the sector fell throughout his presidency.

Now, even as Trump has abandoned the global pact on reducing greenhouse gas emissions and is seeking to boost production of fossil fuels, some in the business are increasingly optimistic about the industry's prospects. Low valuations and an improving earnings outlook, they say, provide a glimmer of hope. "We believe we are close to a turning point," says Mark Lacey, a money manager at Schroders Plc.

While climate advocates focus on rising global temperatures, a far more pertinent indicator for green investing is US interest rates, which last year hit their highest level in almost a quarter century. That made it more costly for green companies to get financing, homeowners to buy solar panels and drivers to purchase EVs. Although rates have declined modestly, economists now expect the pace of reductions to slow this year with inflation remaining above the Federal Reserve's target and jobs data beating expectations.

Saijel Kishan writes about why some in the investment community are still bullish on clean energy: Green Investors Find a Silver Lining in Trump's Presidency

Why Small Towns Are Cheering for Buc-ee's

At 75,000 square feet, the Buc-ee's that opened in Luling, Texas, this summer is the largest of the company's 50 locations. Photographer: Aaron E. Martinez/American-Statesman/USA Today Network

To hear some locals tell it, the arrival of a supermarket-size gas station with pumps for 120 cars is the biggest thing to hit West Memphis, Arkansas, since Elvis Presley had his broadcast debut at the local radio station in 1953.

Buc-ee's, a 43-year-old Texas-based chain, is expanding rapidly across the South, where its "world's cleanest restrooms," wall of beef jerky, soda fountains with more than 90 selections and bucktooth beaver dolls are much in demand. Sixty miles north of Atlanta, the line of cars leading into Buc-ee's from Interstate 75's two exit ramps sometimes stretches a mile. And a future store near Gulfport, Mississippi, is projected to draw 5 million people a year, about the same visitor count as Yellowstone National Park, Buc-ee's Ltd. told local officials.

Impressed by these kinds of numbers, rural towns in the South are dangling millions of dollars in tax breaks and infrastructure assistance—the kind of perks usually lavished on manufacturing plants and distribution centers—to snare their own Buc-ee's. Critics of these sorts of incentives consider them an unwelcome development, saying local businesses derive fewer benefits from the arrival of a large retailer than they do from the influx of other types of industries.

But in West Memphis, where the median household income is barely more than half that for all of the US, Mayor Marco McClendon is counting on Buc-ee's to help set a new floor for local wages when it opens in 2026.

Michael Sasso has the details on why towns are courting the chain: Forget Factories, Small US Towns Want Buc-ee's Gas Stations

ADHD's Cost

 8.6 years
That's the decrease in life expectancy for women with attention deficit hyperactivity disorder, according to an analysis of electronic health records from more than 300,000 people in the UK that was published Thursday. Men with ADHD live 6.8 years less than the rest of the population, the study found.

TikTok's Future

"We are optimistic we will find a solution. There are a number of alternatives we can talk to President Trump and his team about that are short of selling the company that allow the company to continue to operate, maybe with a change of control of some kind, but short of having to sell."
Bill Ford
ByteDance board member
The Chinese company is looking at options for TikTok that could involve a change of control locally to ensure it complies with US legislation, General Atlantic Chief Executive Officer Ford said Thursday in an interview with Bloomberg Television. The private equity firm holds a stake in ByteDance, TikTok's parent.

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