According to B.J. Hebert, president and COO of Chevron Phillips Chemical (CPChem), there's "one main thing" people need to understand about the concept of supply and demand as it pertains to the future of the oil and gas industry.
"When the global population is growing, the demand for plastics goes up," Hebert said. "As long as there are more people on the planet, the demand is going to be there."
Specifically, Hebert said, the middle class is the main driver of the coming population increase.
"From 2020 to 2040, our estimates predict that about 350 million people are going to enter the middle class - a population about the size of the U.S.," he said.
Hebert pointed to "two very large projects" CPChem is developing that reflect the company's confidence in meeting this demand. First, the U.S. Gulf Coast Petrochemical Project II is an approximately $8 billion investment that has a 2,000-kilotons- per-annum (kta) ethylene cracker and two high-density polyethylene (HDPE) units at 1,000 kta each. U.S. Gulf II supports 9,000 construction and 600 full-time jobs.
Second, the Ras Laffan Petrochemical Project in Qatar is a multi-billion dollar investment that consists of a 1,900-kta ethane cracker and two HDPE units with a combined capacity of 1,680 kta. The project employs up to 14,000 construction workers and will provide 550 permanent jobs.
"These are huge-scale polyethylene- type facilities," Hebert said. "Before COVID-19, we were full steam ahead on both of those projects, so we've tapped the brakes a little bit to be able to assess the markets. We've delayed the final investment decision until the first quarter of 2022. We want to be careful; these are multi-billion dollar investments."
Noting that "climate change and sustainability are at the top of mind for every corporation on the planet right now," Hebert said he believes that most corporations are concentrating on how to reduce emissions, make products more sustainable and create circularity.
"How can we really plan for the future? Everybody has a different definition of sustainability," Hebert said. "What does sustainability really mean?"
As an engineer, Hebert said he conducted his own analysis to answer these questions.
"If I made the assumption that we could raise the standard of living, that would be a good thing, right? That makes sense," he said. "I looked at power consumption per capita, water consumption per capita, and waste generated per capita in the U.S., China and India. For example, just for water in the U.S., all of us, including industry, use about 100 gallons of water per day."
Hebert's calculations determined China's daily water consumption per capita is approximately 30 gallons; in India, it's approximately 27.
"There isn't enough fresh water," he said. Applying his analysis to power consumption, Hebert also calculated there are not enough resources to generate the amount of power needed.
"In my mind, from a sustainability consideration, it makes sense to me that something has to change. We have to get more efficient. We can't waste as much," he said.
While plastics are an "unbelievably critical product," Hebert said that in "certain countries that don't have waste management practices in place, plastics don't end up in a landfill; they end up in the ocean."
Hebert touted CPChem's founding and ongoing involvement in the Alliance to End Plastic Waste, a nonprofit organization of nearly 50 major global companies whose mission over the next five years is to "develop, deploy and bring solutions to scale that will minimize and manage plastic waste and promote post-use solutions."
Hebert said CPChem is committed to proactively helping the world find sustainable solutions to these environmental challenges.
"We feel good about growth and our longterm prospects," he said. "At the end of the day, I think common sense will prevail. It has to. We have to educate people to better understand the value our industry brings."
