Oil Companies Going All-in on Petrochemicals

Global oil consumption decreased by around 9% in 2020 as the pandemic reduced business and pleasure travel, factory production and goods transportation. This sudden decline accelerated the ongoing shift from fossil fuels to renewables.

US government projections show that oil consumption for transportation, industry, construction, heating and electricity is falling and will continue to decrease in the coming years. This trend is having a huge impact on the oil industry: As the International Energy Agency stated in 2020, “no oil and gas company will remain unaffected by the clean energy transition.”

Many of these companies are trying to make up for losses by increasing the production of petrochemicals from oil and natural gas. Today around 80% of every barrel of oil is used to produce gasoline, diesel and jet fuel, the rest is used for petrochemical products. As the demand for petroleum fuels gradually declines, the amount of oil used for that “other” portion will increase.

This makes sense as a business strategy, but here’s the problem: Researchers are working to develop more sustainable substitutes for petrochemical products, including bio-based plastics and specialty chemicals. However, petrochemicals can be made at a fraction of the cost. As a biochemist working to develop environmentally friendly versions of valuable chemicals, I fear that pioneering research in green chemistry without proper support will struggle to compete with fossil-based products.

Pan towards petrochemicals

Petrochemicals are used in millions of products, from plastics, detergents, shampoos, and makeup to industrial solvents, lubricants, pharmaceuticals, fertilizers, and carpets. Over the next 20 years, oil company BP expects this market to grow by 16% to 20%.

Oil companies are picking up speed to increase petrochemical production. In the Saudi city of Yanbu, for example, two state-owned companies, Saudi Aramco and Sabic, are planning a new complex that will produce 9 million tons of petrochemicals every year to convert Arabic light oil into lubricants, solvents and other products.

These changes are taking place across global industry. Several Chinese companies are building factories that convert around 40% of their oil into chemicals such as p-xylene, a building block for industrial chemicals. Exxon-Mobil began expanding petrochemical research and development back in 2014.

The promise of green chemistry

At the same time, health, environmental and safety issues are driving the search for sustainable alternatives to petroleum-based chemicals in the US and other developed countries. Drilling for oil and natural gas, the use of petrochemicals, and the burning of fossil fuels have widespread impacts on the environment and human health. High oil consumption also raises national safety concerns.

The Ministry of Energy has conducted basic research on organic products through its national laboratories and funding for university bioenergy research centers. These laboratories develop plant-based, sustainable domestic biofuels and organic products, including petrochemical substitutes, through a process known as metabolic engineering.

Researchers like me use enzymes to convert leaf waste from crops and other sources into sugar, which can be consumed by microorganisms – typically bacteria and fungi like yeast. These microorganisms then convert the sugar into molecules, much like yeast converts sugar into ethanol and ferments it into beer.

In the production of organic products, sugar is converted into other molecules instead of ethanol. We can design these metabolic pathways in such a way that solvents are produced. Components in widely used polymers such as nylon; Perfumes; and many other products.

My lab is researching ways to develop enzymes – catalysts produced by living cells that cause or accelerate biochemical reactions. We want to produce enzymes that can be introduced into genetically modified bacteria to produce structurally complex natural substances.

The overall goal is to bring carbon and oxygen together in predictable ways, similar to the chemical structures created by petroleum-based chemistry. However, the eco-friendly approach uses natural substances as building blocks instead of oil or natural gas.

This is not a new concept. Enzymes in bacteria are used to make an important antibiotic, erythromycin, which was first discovered in 1952.

All of this takes place in a biorefinery – a plant that takes in natural inputs such as algae, plant waste or specially grown energy crops such as switchgrass and converts them into economically valuable substances, as oil refineries do with petroleum. After fermenting sugars with engineered microorganisms, a biorefinery separates and purifies microbial cells to produce a range of bio-based products, including food additives, animal feed, fragrances, chemicals, and plastics.

In response to the global plastic pollution crisis, “polymer upcycling” is a research priority. By using bio-based raw materials, single-use water bottles can be converted into materials that are more recyclable than petroleum-based versions because they are easier to heat and reshape.

Reducing the cost gap

To replace environmentally harmful goods and practices, sustainable alternatives must be inexpensive. For example, many plastics currently end up in landfills because they are cheaper to manufacture than to recycle.

High costs also slow down progress towards a bioeconomy. Today research, development and manufacturing for organic products are more expensive than for established petrochemical versions.

Governments can use laws and regulations to drive change. In 2018, the European Union set itself the ambitious goal of obtaining 30% of all plastics from renewable sources by 2030. In addition to reducing plastic pollution, this step saves energy: After energy production, plastic production on the basis of crude oil ranks third in the world in terms of energy consumption and transport.

The promotion of bio-based products is consistent with President Biden’s nationwide approach to climate change. Investing in organic production could also help create modern manufacturing jobs in rural areas, a goal of Biden’s American employment plan.

However, investment by oil companies in the design of novel chemicals is increasing and the gap between the cost of petroleum-based products and those made by emerging environmentally friendly technologies continues to widen. More efficient technologies could ultimately flood existing petrochemical markets, further reduce petrochemical costs and make competition even more difficult.

In my opinion, the increasing climate crisis and increasing plastic pollution make it imperative to wean the world economy from petroleum. I believe that finding substitutes for petroleum-based chemicals in many of the products we use every day can help move the world towards that goal.

This article is republished by The Conversation under a Creative Commons license. Read the original article here.

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