This is one thing I’m hopeful about for EVs. Plastic is cheap because of massive demand scaling the oil industry, collapse the demand for oil and plastic becomes more expensive.
Oil supply is fairly demand inelastic, if demand for oil drops, we'll almost certainly see cheaper oil. And if OPEC sees the writing on the wall they're going to price aggressively as long as they can.
Right, but lower trending demand would also put more power into the hands of OPEC to crater prices and prop up demand any time alternatives start to threaten oil's dominance. They're not going to go out without a fight to the end because those economies depend on oil. I'm sure it will go on long after I'm gone from this world.
Will they though? A large consumer of oil is cars and EVs are coming fast. Even if we assume that 5% of cars will always be fuel burning ICE for "reasons" that is such large demand destruction that in 10 years I don't think OPEC will have any power - in fact I wouldn't be surprised if most of the world just embargo all OPEC countries: they are mostly middle east areas where there is a lot of conflict and the few non-OPEC oil producers can supply the world's needs, so cutting them off from all money is a good thing for the world.
> Even if we assume that 5% of cars will always be fuel burning ICE
By the time it gets that low, I agree, they're done. We're a very long way from that. 85% of cars being sold globally are still ICE, and the population of vehicles on the road lags sales figures by a couple of decades. And even with the increase in EV sales figures, oil demand is not dropping, because the total demand for cars is increasing.
But if demand for oil starts to drop due to EV adoption, OPEC is for sure going to make sure it's cheap as hell to operate an oil burning car, and people in the majority of the world where it's still legal will have a huge incentive to keep buying them.
That isn't how it works. Oil wells cost a lot of $$$ upfront to get the first drop of oil. Every liter of oil after that is practically free - there is a little electric or gas needed to run the pumps, but that is so little it doesn't count. Most of the cost is in finding a spot to drill, getting permissions to drill there, and then drilling. (mineral rights are really complex, but generally whoever owns them gets a % of the sale value of the crude, so if the price goes down or the well produces less they get less money)
Which is to say oil wells don't shutdown when the profit goes negative because that never happens. Oil wells do shutdown (or more likely produce less because the pump is slowed) if the owner decides they want to control supply to bring the price up - but you have to have a lot of wells to even think about that. During the pandemic oil wells shutdown, but that was because there was no place to put store the oil - if you could store it there was plenty of value in pumping it (though it was an investment).
Refineries don't shutdown when the profit goes negative. Again, because the sunk cost in machinery is a large part of the cost. If the profit goes down they will often not remodel and eventually shutdown because the equipment it wore out. Many have shutdown because the right crude wasn't available (and they didn't want to invest in machinery to handle crude they can get) - and then reopened a decade later when someone started pumping the right crude again.
Yes of course if profit goes negative they will both shutdown. However long before profits go negative they will be managing things and so in practice they are shutdown for other reasons first.
The high-cost suppliers in countries where cartels are illegal do. Which is why fracking busts and booms in the US as prices change around the world for other reasons. But there's enough places in the world where oil flows with minimal effort to sustain low prices in a world where demand is decreasing.
The auto industry is a competing use of oil, isn’t it? So halving demand is more likely to reduce prices.
Car industry obviously helped to build the infrastructure but I think now that it’s there, fair chance there’s going to be a lot of oil supply looking for a use. Infrastructure won’t disappear overnight.
Do you know how fractional distillation works? Fuel doesn’t compete for oil. Fuel, bitumen and other heavy fractions is the main reason we distill oil. Those are the hydrocarbons that are actually hard to make. The light fractions used in plastics fall out of that process. It’s not a competition, it’s a synergy.
If they’re going to turn ALL the oil into plastics, at the very least they have to have more processing steps. It’s not hard but it will require bigger refineries, in other words, more expensive plastics.
Also, they will be competing with bio-plastics and other alternatives, that will probably get more favourable regulations in many countries.
Plastics won’t go away. Even if we don’t pump for oil it’s not very hard to make the same plastics from biological hydrocarbons.
The key thing people are talk over each other here is that step #3 takes years.
But also, plastics can pay much more for oil and gas than fuel can. It's currently not scarce at all, and the economic restrictions are all around using the plastic in some way. So don't expect the plastic industry to suffer like your last paragraph implies.
How does that work? If it were simply "oil can be turned into fuel or turned into plastic", then lowered demand should lower the price. Is it that turning oil into fuel produces plastic (or plastic precursors) as a byproduct?
Then what is the alternative? Going back to metal and wood consumer goods at the scale western consumerism exists today versus the pre 1960s would probably be impossible and really throw gasoline on the entire climate crisis.
Some of those plastics would be well-replaced by metals. How many plastic spatulas fill landfills? An adult probably goes through a dozen or more in their lifetimes if they're careful with them, and far more if they burn them leaving them in pans.
A single stainless steel one has to be better, unless I'm just off on the math.
We make so many things that, even if they're not disposable they are "disposable" when they do not have to be.
Finding a good without plastic in it is actually one of my criteria for kitchenware. Glass, metal, wood... nothing else should touch food if I can help it (some exceptions when truly warranted, silicone can be useful).
Packaging makes up, by far, the largest share of plastic waste. And in regards to food, the only packaging without plastic is basically just glass. Cans are lined with plastic to avoid chemically reacting with food. And paper is coated with plastic to stay waterproof. Glass is great but it is energy intensive and has its own waste issues.
We can make plastics from bio sources. It is more expensive, and those plastic biodegrade (sometimes a positive, but sometimes a negative)
We can make any oil from the basic atoms (mostly carbon, oxygen, and hydrogen - but some molecules may want something else). However this process costs a lot more energy (read $) vs pumping oil from the ground and so it is rarely done. This is how synthetic oils are made so if you know the cost of car oil you can get a good picture of the difference in costs.
