A Plastic World

With a potential decrease in global oil demand, are petrochemicals and plastic the future of the oil industry?

- Matthew Flynn

According to a recent report by the IEA (International Energy Agency), “the global electric car fleet exceeded 5.1 million, up 2 million from the previous year and almost doubling the number of new electric car sales.” The same report estimates that by 2030, electric vehicle sales will reach 23 million annually with 130 million electric vehicles on the roads.

To some, the decline of the internal combustion engine combined with increasing interest in renewable energy sources portends loss of revenue for the oil and gas industry. However, as the previously mentioned drivers of global oil demand are decreasing, the demand for petrochemicals — specifically ethene and propene, which are used to make plastics — is on the rise.

After a peak of the percentage of oil being used in transportation, which is anticipated in 2025, the amount of oil used in cars, as well as in shipping, industry, and buildings will continue to drop. This will coincide with a rise in the need for chemicals gleaned from cracking petroleum. A 2018 IEA report explains, “Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050.”

PETROCHEMICALS ARE SET TO ACCOUNT FOR MORE THAN A THIRD OF THE GROWTH IN WORLD OIL DEMAND TO 2030, AND NEARLY HALF THE GROWTH TO 2050.

THE IMPORTANCE OF PETROCHEMICALS