Big Oil’s hopes are pinned on plastics. It won’t end well.

The industry’s only real source of growth probably won’t grow much.

By David Roberts

The fossil fuel industry has not been doing well lately. Even before the Covid-19 pandemic hit, growth in global demand had slowed to 1 percent annually. Now, lockdowns and distancing to stop the spread of the coronavirus have decimated the industry. The International Energy Agency (IEA) recently released projections of rapid short-term decline in global demand, to the tune of 9 percent for oil, 8 percent for coal, and 5 percent for gas.

Depending on how long and severe the economic crisis proves to be, it will take years for demand to recover. Indeed, with electric vehicles cutting into oil demand by the end of the decade, it may never fully recover. Industry analysts like Carbon Tracker’s Kingsmill Bond are speculating that 2019 may turn out to be the peak of fossil fuel demand, and historically, in other industries, a peak in demand “tends to mark the beginning of a period of low prices and poor returns,” says Bond.

But the industry has a response to this dire forecast, and it can be summarized in one word: plastics.

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