( GETTY IMAGES NORTH AMERICA / BRANDON BELL )
About 4 to 8 percent of global oil production is used to make plastic, a share expected to rise to 20 percent by 2050, according to the United Nations Development Program.
Plastic, to the aid of oil and gas producers? It indeed represents an important outlet for them, faced with
the inexorable electrification of vehicles.
“The petrochemical sector plays an important role”
in the activity of these industries, once the oil and gas are extracted from the subsoil, Guy Bailey, head of oil and chemical markets for the research firm Wood Mackenzie, told AFP. Representing 15% of demand for refined products today, plastics and chemicals are expected
increase to 25% by 2050,
he underlines, reporting “robust growth”. This “reflects both the importance of plastics – which are an integral part of all facets of modern life and the energy transition – and
longer term decline
of fuel demand as the transport sector becomes electrified,” explains the expert.
Environ
4 to 8% of world oil production
is used to make plastic, a share that is expected to reach 20% by 2050, according to the United Nations Development Program. “If you take a barrel of oil, it is mainly used for transport”, that is to say transformed into fuel, “only a small part is directed towards plastics”, details Martha Moore, chief economist of the American Chemistry Council (ACC), which brings together companies in the sector.
– “Transition risks” –
But this is likely to change, as
electric vehicles are becoming more and more accessible,
explained to AFP Steven Fries, expert at the Peterson Institute for International Economics (PIIE) as well as at the Institute for New Economic Thinking at Oxford Martin School, and member of the British committee for climate change. However, according to him, salvation is not found in plastic: “given that plastics only represent a modest fraction of the barrel of refined oil, it is
unlikely to be the long-term solution for the industry.”
All the more, warns Guy Bailey, that “the plastic industry is
faced with its own transition risks,
both in terms of the need to reduce one’s carbon footprint and to address the challenge of plastic waste.”
Tom Sanzillo, director of the financial analysis think tank IEEFA (Institute for Energy Economics and Financial Analysis), even draws a parallel between the current situation of the petrochemical industry and the “decline of the coal industry. “They think their new market is petrochemicals, but even there,
demand won’t be as strong as they think.”
he told AFP.
– Recycling –
Whether they extract the raw material from the ground themselves, or whether they buy it, plastic manufacturers, for their part,
focus on recycling
to diversify their activity. And they hope that the plastic treaty negotiated this week in Busan (South Korea) will give a clear direction to their investments in this area. “Ultimately, our goal is
to eliminate the need for virgin oil and gas in plastic”,
assures, without specifying the deadline, Ross Eisenberg, president of the plastic manufacturers division within the ACC – who will be present in Busan. “Many (of these groups) invest in recycling and become recyclers themselves,” he explains, emphasizing that
the industry is “investing heavily” in this “circular economy”.
“It’s not a sector that, traditionally, the oil and gas industry has invested in, but (…) they realize that they can actually use what exists as a raw material and not have to extract new resources from the ground,” he said. But
this “requires a lot of infrastructure”,
and “this is what this global agreement can really help us do, (…) everyone will win.” It is from the design stage that the products must be designed to be able to be recycled.
“A greater demand for plastics will be met through recycled and reused materials,” underlines Steven Fries, warning that
“the changes facing the industry will gradually become more pronounced.”
For him, “there is no simple solution for the oil and gas industry. They will have to change.”
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