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Where oil is going

Screenshot from summary of IEA report, "The Future of Petrochemicals"

Rising use of petrochemicals that make plastics and other products will be the largest source of crude oil demand growth in coming decades, the International Energy Agency said in a new report.

The big picture: "Petrochemicals ... are set to account for more than a third of the growth in oil demand to 2030, and nearly half to 2050, ahead of trucks, aviation and shipping," the report shows.

  • Petrochemicals are used to make plastics, as well as fertilizers, clothes and a wide array of other products.
  • "Demand for plastics – the most familiar group of petrochemical products – has outpaced that of all other bulk materials (such as steel, aluminum or cement), and has nearly doubled since 2000," IEA notes.
  • The report also notes that petrochemicals are used to make parts of clean-energy technologies, such as solar panels and batteries.

Why it matters: The IEA report calls the topic a "blind spot" in energy policy debates.

Petrochemicals are fundamental and helpful parts of the global economy, but also pose major pollution problems and represent a growing source of greenhouse gas (GHG) emissions.

  • In particular, plastics are a major marine pollution problem.
  • More broadly, the report's long-term forecast shows that recycling and efforts to curb single-use plastics will be "far outweighed" by rising plastics consumption in developing economies.
  • In addition, the chemical sector represents 18% of all industrial-sector carbon emissions, and IEA forecasts substantial emissions growth in coming decades.

What's next (or could be): The report offers a "clean technology scenario" to lower the environmental toll of petrochemicals in coming decades.

  • It includes the adoption of better waste management and recycling to help cut ocean-bound plastic waste in half and the use of carbon capture and storage among other actions.

Go deeper: Reuters has more here.

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