Agriculture

Published on September 14th, 2017 | by James Ayre

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Is Oil Industry Threatened By More Than Electric Vehicles?

September 14th, 2017 by  

Execs at a number of the world’s top fossil fuel companies have in recent years made comments inferring that even after demand for oil and natural gas peaks, demand for petrochemical feedstocks for plastics, fertilizers, and other chemicals will remain strong.

Execs at Saudi Aramco, in particular, seem to be betting on such demand allowing the state-owned company to continue providing enough revenue to allow those in Saudi Arabia to retain their familiarity with “the high life.”

Is this assumption that strong demand will remain for petrochemical feedstocks for plastics and fertilizers misplaced, though? Will demand remain strong even after oil & gas extraction becomes considerably more expensive (as will occur over the coming decades).

Bloomberg recently published an interesting article on this subject that I’m going to highlight a few parts from: “Kenya’s mountains of plastic bags might not seem central to oil’s grand narrative, but they are. Last week, the East African country banned almost everything about them: making them, importing them, selling them, using them, with penalties of up to four years in jail or fines up to $38,000.

“… But, as Kenya shows, the days of single-use plastic packaging may already be numbered. And with this stuff making up about a quarter of all the plastic used, that will have a profound impact on the petrochemicals industry.

“Environmental fears are only going to worsen. The Great Pacific Garbage Patch — a concentration of marine debris, most of which is plastics — is estimated to be roughly the size of Texas. There are similar areas, brought together by ocean currents, in the Atlantic and Indian Oceans and they aren’t going anywhere.

“Plastic doesn’t biodegrade, it just breaks down into smaller and smaller pieces. Remember all those subprime mortgages from a decade ago? They got chopped up and mixed in with ‘good’ debt and sold on as investment-grade securities, almost bringing the financial system to its knees. Think of plastic as a chemical equivalent to those loans: no matter how much it breaks up, it’s still plastic.”

That certainly makes for an interesting metaphor, doesn’t it?

With regard to the micro plastics pollution problem, we covered that in depth last week (we actually published two articles on that, from two different authors) — I’ll limit myself here to noting that micro plastic fibers are now apparently found in around 94% of US tap water.

The problem is growing at a rapid clip, and is alarming enough to some people that I wouldn’t be too surprised to see strong regulatory actions concerning the availability of single-use plastic packaging in the coming years.

As a reminder, at the current rate of increase, the world’s oceans will be home to more plastic, by weight, than fish by 2050. … This reality seems to be spurring some governments to take action.

India, for instance, recently upheld its ban on non-biodegradable plastic bags in Delhi; and Scotland is now planning to introduce a plastic bottle deposit and return scheme similar to the one introduced in Germany in 2003 to great success. (That program reportedly increased recycling of plastic bottles to around 98.5%, and is quite easy to use.)

This makes it sound as though demand for plastics feedstocks could plateau at some point in the near future. Or not, I suppose, as global population figures continue to rise and consumerism seems to be growing as well. Strong regulatory action could probably prove effective at limiting plastic use, though.

All of that said, the situation with fertilizers is quite a bit different — there’s no real way around the fact that the current industrial agriculture system is dependent upon petrochemicals — in a wide variety of ways, some not immediately obvious.

Even industrial-scale “organic” agriculture is highly dependent upon the “waste” products of other parts of the food system (parts which rely on fossil fuels in a number of ways) — whether cheap chicken crap from large-scale poultry or egg operations, or cheap fish emulsion created from the by-catch of the commercial fishing industry. (Small-scale organic operations can be a different story, depending upon the approach taken and the land in question, but are generally much more labor-intensive).

In other words, fertilizers will remain a necessity if the current agricultural system is to be maintained. And what that means in practice is that if people want to avoid going back to a situation where the vast majority of people are directly involved in agriculture, or grow and raise much of their own food, then the fertilizers that are directly derived from fossil fuels and/or mined with cheap fossil fuels will remain highly valued.


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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.



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