The oil industry is turning to petrochemicals for long-term growth as vehicle efficiencies and electrification render transportation a declining market. Of course, petrochemicals often means plastics. With the sustainability spotlight shining brightly on this area, what effect will environmental strategies to reduce or ban plastic consumption have on long-term oil demand growth?
The Problem With Plastic
Resolving this complex and increasingly sensitive issue will be challenging. The starting point to understanding the implications for natural resources and the environmental consequences of shifting away from plastics must be: If not plastic, then what? And reviewing the entire supply chain is essential, otherwise the issue of environmental impact will simply surface elsewhere.
Plastics are favored by many because they are incredibly efficient and cost-effective, but finding alternative solutions for their many uses is going to be complicated, problematic, and expensive, requiring a commitment from the public, brand owners, and governments. This will take time.
A circular plastics economy could lessen the impact of disposal while having minimal effect on chemical demand growth because of rising incomes, populations, and living standards. It is important to note that waste management is a major problem, primarily in developing countries, and better management would go a long way in addressing plastics waste in the oceans and the negative public perception. So, although the rate of growth (in percentage terms) will be lower than we've seen, it's still growth stemming from an ever-expanding base so the volumes are quite sizeable.
Ethane will capture the majority of this, and, along with naphtha, will remain the primary feedstock for petrochemicals and plastics. And the chemical industry will continue to grow, requiring continuous investment. By 2035, chemicals will account for almost all oil demand growth. Approaching 2040, our forecast shows chemicals being almost 20% of total oil demand.
Read the full story here.
Don't miss our latest HSE content, delivered to your inbox twice monthly. Sign up for the HSE Now newsletter. If you are not logged in, you will receive a confirmation email that you will need to click on to confirm you want to receive the newsletter.
12 - 14 Feb 2019
- Galveston, Texas, USA
Join leading industry experts as they share their experiences with the integrated fluid network
3 - 5 Feb 2019
- Houston, USA
Enhanced Oil Recovery Across Scales
29 - 31 Oct 2019
- Bali, Indonesia
Call for Papers is Now Open.
15 Jan 2019 15:30 EST
- Live, then On Demand
HSE Now is a source for news and technical information affecting the health, safety, security, environment, and social responsibility discipline of the upstream oil and gas industry.
©2003-2018 Society of Petroleum Engineers, All Rights Reserved.