Jun 18, 2019

The obscure energy feeding the world's plastics obsession

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Data: EIA; Chart: Axios Visuals 

America's oil and gas boom is fueling the rise of a lesser-known energy central to the plastics in our lives: ethane.

The big picture: Ethane, a colorless and odorless gas produced alongside natural gas, is the single largest type of raw material in North America for petrochemicals, the building blocks of plastics. America is consuming and exporting ethane in record quantities.

Driving the news: Last week, ExxonMobil and Saudi Arabia-based SABIC got final approval to build in Texas what will be one of the world’s largest facilities processing ethane — with a $10 billion price tag, per The Houston Chronicle.

By the numbers:

  • Domestic demand for ethane has grown rapidly. The U.S. Energy Information Administration projects it will reach 1.7 million barrels per day by year’s end, an 83% increase over 2012.
  • Seven new petrochemical plants have come online in the U.S. since early 2017, with at least a couple more expected this year, per the EIA.
  • Exports of ethane have grown from nothing in 2013 to more than 250,000 barrels a day in 2018. EIA projects these exports to increase by another 50% this year. (The only other country that exports ethane, Norway, does about a quarter of that.)
  • Global petrochemical demand will keep growing above GDP growth until 2028 partly due to the growth in e-commerce — think: all those Amazon packages, which require a lot of plastic — according to the research and consultancy firm Wood MacKenzie.
  • Then at that point, various mandates and bans being imposed around the world will push petrochemical demand below GDP growth, the consultancy projects.

The intrigue: This boom in petrochemicals is coming right as the global outcry intensifies over plastic waste.

Go deeper: Axios' Deep Dive on our plastic planet

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