Climate Disrupted: Oil Companies Bet on Plastic in the Face of Climate Crisis

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Given the global shift to renewable energy, fossil fuel companies are looking for new ways to maintain their livelihoods. In a 2018 investor report, ExxonMobil admitted to a decline in demand for gas and aims to replace those profits with petrochemicals, expecting a 30 percent increase in demand by 2025.

The International Energy Agency (IEA) believes that, by 2050, half of growth in oil demand will come from petrochemicals, replacing auto transportation demand. In the IEA’s Sustainable Development Scenario from its 2017 World Energy Outlook, oil consumption for transportation is reduced by almost 15 million barrels per day (Mbd) from 2016 to 2014, while oil use for petrochemicals actually increases by 4.2 Mbd.

Given the expected increase in demand for petrochemicals in the near future, the 3D printing industry should be ideally positioned to take advantage. According to SmarTech’s most recent report, “Polymer Additive Manufacturing Markets and Applications: 2020-2029,” polymer 3D printing is expected to “generate $11.7 billion in revenues in 2020, grow to $24 billion in 2024 and as much as $55 billion yearly by the end of this decade.”

Rear-view mirror housing made from BASF Ultrasint PA6 X043 with Farsoon HT403P.

In the past several years, we’ve already seen a number of chemical companies enter the AM market. Perhaps most notably is BASF, the largest chemical company that has invested in such 3D printing firms as Materialise and Essentium, developed numerous AM materials, and acquired 3D printing service bureau Sculpteo outright. Outside of manufacturing plastics, BASF is involved in agrochemicals and oil and gas exploration and production.

With the world’s second-largest crude oil reserves and second-largest daily oil production, Saudi Aramco is another leading player. The state oil and gas company owns 70 percent of SABIC, the fourth-largest chemical company and manufacturer the popular ULTEM brand of polyetherimide (PEI), as well as other materials for 3D printing. Specific varieties of ULTEM are certified to meet aerospace regulations and are widely used in these applications. For 3D printing, the material was previously only available for use with Stratasys extrusion systems, but SABIC has since found new partners to use its high-strength, high-temperature resistance materials.

SABIC 3D printing filament.

Other chemical multinationals currently in the AM market include Lubrizol, Dow Chemical/DuPont, Evonik, Henkel, DSM, Mitsubishi, Clariant, Huntsman, Eastman, DuPont, Victrex, Lehvoss, Owens Corning, Covestro and Arkema. All of these companies are directly involved in the production of plastics from fossil fuel sources and a number of them have been or are directly involved in fossil fuel exploration and/or production.

The fact that some of those that were directly involved in fossil fuel production and have sold off or shut down those divisions could be indicative of the shift taking place. Lubrizol, for instance, eliminated Lubrizol Oilfield Operations in 2017. Evonik sold off its coal-based energy business in 2014.

One factor to consider in anticipating the future of plastic is the fact that an increasing number of governments are initiating or discussing plans for phasing out the use of single-use plastics, which represent a large portion of the materials polluting our oceans and the bodies of  life on earth.

In an investor article titled “Oil’s future paved with plastic,” Bank of America Merrill Lynch noted that, though fifty countries are taking action to regulate plastics, these moves “are likely to have only a marginal impact. While a clear risk to our view, we do not see enough support for recycling and alternatives for now to significantly move the needle on petrochemical oil demand.” More importantly, for the 3D printing industry, the technology is less likely to be used for single-use plastics than parts with longer lifespans due to the cost prohibitive nature of additive manufacturing.

While it is in the interest of petroleum companies to think of and highlight alternative sources of income in a climate disrupted world, our fates are not sealed to see petrochemicals as the source for all plastics. As readers are well aware, the COVID-19 strain of the coronavirus is currently wreaking havoc worldwide, reducing manufacturing operations, and therefore, the global shipping industry and the consumption habits of those who purchase manufactured goods.

Meanwhile, the airline industry is struggling to remain stable as events and associated trips are cancelled. They’re going so far as to book “ghost” flights just to maintain their take-off and landing slots. The reduction in flying is thus reducing the consumption of oil, which has led to a trade war between Russia and Saudi Arabia, that led Saudi Arabia to cut the price of its oil to prices that haven’t been seen since the 1991 U.S. invasion of Iraq.

If the economy makes it out of this alive, we may be getting a taste for the future of markets impacted by the climate crisis. Due to the fact that warming global temperatures are likely to increase the spread of infectious disease and cause other major disruptions to the global economy (housing market crashes, food shortages, massive migration), this may not be the end of coronavirus-like events.

If we maintain an industrialized society, it may become necessary to rely on local and more sustainable sources of goods, including plastics in order to prevail during regular disruptions. This may mean more recycled goods, as well as more bioplastic-based goods. In a subsequent article, we will look more closely at our options for bioplastics and recycling.

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