THE PIVOT TO PLASTIC

To keep profits rolling in, oil and gas companies want to turn fossil fuels into a mounting pile of packaging and other products

- BY BETH GARDINER

IN 2018, AT A DUBAI RESORT next to the blue-green waters of the Persian Gulf, Amin Nasser, CEO of Saudi Aramco, stood before an audience of hundreds of petrochemical executives to set out his vision for the future of the world's largest oil company. The goals he described weren't primarily about energy. Instead he announced plans to pour $100 billion into expanding production of plastic and other petrochemicals.

Nasser predicted that with a growing global population wielding more purchasing power every year, petrochemicals—compounds derived from petroleum and other fossil fuels and of which plastics and their ingredients constitute as much as 80 percent—would drive nearly half of oil-demand growth by mid-century. About 98 percent of virgin plastics are made from fossil fuels. In sectors that include packaging, cars and construction, he said, “the tremendous growth in chemicals demand provides us with a fantastic window of opportunity.”

In the years since Nasser’s 2018 speech, Saudi Aramco, owned mainly by the government of Saudi Arabia, has acquired a majority stake in the country’s petrochemical conglomerate SABIC. Together the companies have bought into huge Chinese plastic projects and built petrochemical plants from South Korea to the Texas coast. Aramco aims to turn more than a third of its crude into petrochemicals by the 2030s—a near tripling in 15 years.