Why The Oil Industry’s $400 Billion Bet On Plastics Could Backfire
Scott Carpenter: Senior Contributor: Energy Sept 5, 2020Key takeaways:
- Oil companies plan to invest $400 billion into new petrochemical plants, betting that demand for plastic will keep growing.
- Authors of a new report say the industry and other forecasters fail to consider that large majorities favor legislation to curb plastic use and waste and that governments are acting.
- Plastics impose a cost of $1000 per tonne — through CO2 emissions, air pollution, and collection costs. Calls to shift those costs onto producers through taxes are growing.
- Outside experts said the long-term outlook for plastics demand remains uncertain and will depend on consumer preferences and government actions.
The COVID-19 pandemic and accelerating green growth around the world have eviscerated many of the oil industry’s dogmas: that renewables would suffer from high costs, that governments would slow-walk environmental commitments, that investors would continue to reward long-term bets on oil with generous market values.
But one nugget of wisdom has survived everything the market has thrown at it, and now oil companies like ExxonMobil and Shell are wagering billions on it: that the world’s demand for plastics is still growing, with no end in sight. read more
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