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The Plastics Backlash has Some Oil Giants Worried

July 04, 2019 / Nicholas Newman

Faced with sooner than anticipated peak demand from transportation, industry, buildings and the power sector, BP Plc, Total SA and Exxon Mobil, amongst others, are investing in factories and refineries that convert fossil fuels into plastics and chemical feedstocks--a sector that is, according to the BP Energy Outlook 2019 “the single-largest projected source of oil demand growth in the next twenty years.” Indeed, the EIA expects U.S. demand for feedstock to increase from 40 million metric tons a year today to 60 million by 2040. Royal Dutch Shell PLC is thought to have invested at least $6 billion in a chemical processing plant to produce ethane and polyethylene feedstocks in Western Pennsylvania. Similarly, Exxon Mobil plans to spend $20 billion over the next decade on a series of petrochemical complexes and refineries on the Gulf Coast. Likewise, traditional crude oil producers and refiners see a bright future in chemicals and plastics. For example, Saudi Aramco, is plan...