Plastics will displace fuels as the main driver for crude oil demand, the International Energy Agency said today, adding that petrochemicals will come to account for more than 33 percent of oil demand growth globally in the period to 2030. By 2050, they will drive half of the global oil demand growth, raising this demand by 7 million bpd by that year.
The report that contains the projection is titled The Future of Petrochemicals, and the IEA said it was part of a series of reports that aim to uncover “blind spots”, or facets of the global energy industry that receive less attention than they deserve.
Petrochemicals are indeed Big Oil’s big hope for the future—but the more distant future. Petrochemicals are used in thousands of products, with the biggest group among these being single-use plastic products. The bad news for oil is that green initiatives around the world are mounting, and many of them are targeting precisely this group of products. And yet, even if single-use plastic products are removed from the supply chain, enough demand will remain to drive the consumption of crude oil.
“Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends,” IEA’s head, Fatih Birol, said. Petrochemicals are not just the plastics we see in single-use grocery bags. Petrochemical products are also essential in renewable energy installations such as solar panels and wind turbines, but also batteries, and thermal insulation, and thousands of other products and components.
The durability of petrochemicals demand is evident in the demand growth trends: the IEA says demand for plastics has almost doubled over the last 18 years, exceeding the demand growth rate of every other bulk material, including steel, aluminum, and cement. Perhaps more importantly, emerging markets have yet to catch up to developed ones in their plastics consumption. Now that’s a guarantee for steady demand in the future.