On Wednesday, an executive from Exxon Mobil said that the global, growing demand for energy and plastics will continue to increase carbon emissions through 2030 despite falling pollution levels in the United States.
Exxon President, Neil Chapman, spoke at a luncheon for the National Associate of Manufacturing Wednesday. Chapman said that as the middle class continues to expand worldwide, especially in China and India, the demand for plastics will rise over 4 percent each year, two times more than the demand growth of energy. According to Chapman, a huge portion of the chemicals and plastics consumed in Asia will come from the Gulf Coast in Texas.
Carbon emissions are waning in developing nations because of improved energy efficiency and renewable power. Despite this decline, the rapid growth of the developing world signals that emissions will increase until around 2030, said Chapman. “Climate change is an issue we have to address as a society,” he said, “But, at the same time, there’s 1 billion people without electricity in the world.”
Currently, Exxon is devoting billions of dollars to upping the production of ethylene and polyethylene at the company’s Baytown and Mont Belvieu plants. The mission signifies Exxon’s first massive chemical boom in over 15 years. Completion for the project is set for the end of 2017.
In addition to this project, Exxon is wrapped up in a joint endeavor with the Saudi Arabia Basic Industries Corp, also known as SABIC. Soon, the companies will choose to build a major chemical plant in either Louisiana or Texas.
The recent surge in the demand for plastics is due in major part to the increasing incomes in China and other developing nations. The people of these nations spend much of their money on consumer products with plastic packaging. Chapman said that when the amount of disposable income grows, people purchase cars and shop at nicer grocery stores as opposed to outdoor markets. “Everything is covered in plastic [in grocery stores]. In my business, we love that,” said Chapman.
A lot of the plastic demanded by developing countries will be exported from the Gulf Coast where the inexpensive and abundant natural gas has sparked a surge in petrochemicals. Most plastics can be derived from a component in natural gas called ethane.
According to the American Chemistry Council, an industry trade organization, predicts that roughly 275 petrochemical projects are currently under construction or at least planned across the nation through 2023. These projects will produce around 75,000 jobs and cost a total of $170 billion. $55 billion of the cost will come from Texas projects. The National Association of Manufacturing reports that the chemical division makes up 51 percent of all American manufacturing expenses in 2016.
“Houston is at the absolute epicenter of this revolution,” said Chapman, stating that over 40 percent of the country’s base chemicals are created in the Greater Houston area.
The U.S. has seen much petrochemical growth over the last 15 years. Chapman says that just ten years ago, the U.S. was the priciest country to manufacture chemicals. The increase in shale drilling soon changed that. “That’s an astonishing transformation from just a few years ago,” said Chapman.