Rising Use of Plastics to Drive Oil Demand to 2050 - IEA

By Ahmad Ghaddar and Ron Bousso
Friday, October 5, 2018

Plastics and other petrochemical products will drive global oil demand to 2050, offsetting slower consumption of motor fuel, the International Energy Agency (IEA) said on Friday.

Despite government efforts to cut pollution and carbon emissions from oil and gas, the Paris-based agency said it expected the rapid growth of emerging economies, such as India and China, to propel demand for petrochemical products.

Petrochemicals that are derived from oil and gas feedstocks form the building blocks for products that range from plastic bottles and beauty products to fertilizers and explosives.

Oil demand for transport is expected to slow by 2050 due to the rise of electric vehicles and more-efficient combustion engines, but that would be offset by rising demand for petrochemicals, the IEA said in a report.

"The petrochemical sector is one of the blind spots of the global energy debate and there is no question that it will be the key driver of oil demand growth for many years to come," IEA Executive Director Fatih Birol told Reuters.

Petrochemicals are expected to account for more than a third of global oil demand growth by 2030 and nearly half of demand growth by 2050, according to the world's energy watchdog.

Global demand for petrochemical feedstock accounted for 12 million barrels per day (bpd), or roughly 12 percent of total demand for oil in 2017. The figure is forecast to grow to almost 18 million bpd in 2050.

Most demand growth will take place in the Middle East and China, where big petrochemical plants are being built.

Oil companies such as Exxon Mobil and Royal Dutch Shell plan to invest in new petrochemical plants in the coming decades, betting on the rising demand for plastics in emerging economies.

In the Middle East, major producers such as Saudi Arabia and Kuwait are also investing in large petrochemical plants because in some cases they can make more money by converting crude oil directly into plastics rather than oil products such as gasoline and diesel, Birol said.

Plastics use has come under increased scrutiny as waste makes its way into the oceans where it harms marine life, prompting several countries to ban, partly ban or tax single-use plastic bags.

But the IEA report said government efforts to encourage recycling in order to curb carbon emissions would have only a minor impact on petrochemical growth.

"Although substantial increases in recycling and efforts to curb single-use plastics take place, especially led by Europe, Japan and Korea, these efforts will be far outweighed by the sharp increase in developing economies of plastic consumption," it said.

Under the IEA's most aggressive scenario, recycling could hit around 5 percent of high-value chemical demand.

Petrochemical plants mainly run on light oil products such as naphtha and liquefied petroleum gas (LPG). But natural gas is becoming an increasingly favored feedstock, particularly in the United States where shale gas production has risen.

The report said petrochemical projects would account for 7 percent of the roughly 850 billion cubic meters in gas demand increase between 2017 and 2030, and 4 percent of the increase projected for 2050.


(Reporting by Ahmad Ghaddar and Ron Bousso; Editing by Edmund Blair and Dale Hudson)

Categories: Energy Oil Finance

Related Stories

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Brownfield Output Decline Accelerates, says IEA

Chinese Contractor Secures Offshore Oil and Gas ‘Mega Deal’ from QatarEnergy

Saipem Bags $1.5B Contract for Türkiye Largest Offshore Gas Field

PTTEP Hires McDermott for Deepwater Subsea Job off Malaysia

TotalEnergies Inks 10-Year LNG Supply Deal with South Korea’s KOGAS

Japan Picks Wood Mackenzie to Assess Trump-Backed Alaska LNG Scheme

SPE Offshore Europe 2025 set to drive transformational change for the energy sector

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Current News

Ventura Offshore’s Semi-Sub Rig to Keep Drilling for Eni in Asia

SBM Offshore, SLB to Optimize FPSO Performance Using AI

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com