Oil & Energy

Will Petrochemicals Continue To Drive Oil Demand?

Published

3 years ago

November 6, 2023

Petrochemicals have been driving oil demand in recent years, but that could all change if new restrictions come into place to curb the production of plastics and other products.
The global demand for petrochemicals has been gradually rising over the last two decades, as an increasing number of consumers spend on petrochemical-derived products.
There are fears that the industry could continue to drive demand, keeping the world reliant on fossil fuels, long after we shift away from oil and gas for our energy needs unless policy change happens now.
For several years, leading energy organisations have been saying that petrochemicals will likely lead oil demand for decades to come due to the huge global reliance on products that come from these chemicals.
While countries worldwide are moving away from fossil fuels when it comes to fulfilling their energy needs, as many governments accelerate the rollout of renewable energy projects, something that’s proving harder to get away from is plastics and other petrochemical products.
Petrochemicals go into the making of countless everyday items such as clothing, tyres, digital devices, packaging, fertilisers and detergents. By 2018, petrochemicals accounted for 12 percent of the global oil demand.
Petrochemicals are viewed by the International Energy Agency (IEA) as an energy demand blind spot, often overlooked by policymakers. The IEA has long been concerned that the massive demand for petrochemicals seen in the Global North will be replicated in developing countries worldwide as they undergo industrialisation.
The global demand for plastics is being driven by growing populations and increasing GDP and wealth, meaning more disposable income for consumer goods.
By 2025, plastic production is expected to rise above 600 million metric tonnes a year, which will increase to around double this figure by 2050. Over half of all the plastics produced worldwide so far were manufactured from the year 2000 onwards, contributing significantly to rising oil demand.
It is becoming apparent that the ongoing growth of the petrochemical industry could hinder the green transition if policies are not put in place to curb production.
The Beyond Petrochemicals campaign was established in September 2022 with an $85 million investment from Bloomberg Philanthropies, aimed at blocking the expansion of over 120 proposed petrochemical projects in three principal regions – Louisiana, Texas, and the Ohio River Valley.
The group has succeeded in halting the development of the Mountaineer NGL Storage facility in Monroe County, Ohio. The storage was set to hold ethane, butane, and propane derived from fracked gas. It also worked to stop the Appalachian Storage Hub in West Virginia, the PTT Global Chemical ethylene cracker plant in Ohio, and the Formosa Sunshine Plant in and proposed the South Louisiana Methanol complex in Louisiana from becoming a reality.
This grassroots action is slowly making policymakers more aware of the growth of the petrochemical industry and its potential challenge to decarbonisation.
In recent years, governments worldwide have also brought in bans on single-use plastics to prevent these products from ending up in landfills. By 2019, over 100 countries had banned or partially banned single-use plastics.
Countries around the globe are encouraging plastics producers to make products that can be recycled and consumers to recycle their plastics. Yet, an estimated 85 percent of plastic packaging worldwide ends up in landfills, with the U.S. recycling just 5 percent of its 50 million tons of plastic waste in 2021.
Further, recycling practices have also come under scrutiny in recent years due to their high energy use.
There is still little action at the state or regional level to curb the production of petrochemicals. The Ellen MacArthur Foundation is calling for a UN treaty on plastics to legally bind member states to norms on plastics production.
But this has not gained much traction. Further, much of the emphasis is on plastics, while petrochemicals go into a wide range of other widely used products.
In many countries, the petrochemical sector falls into the “hard to decarbonise” industry category. Producers are being pushed and incentivised to clean up operations, but little is being done to restrict production.
For example, many chemical industry strategies to address environmental concerns rely on feedstock substitution and improved recycling but do not aim to change the production model or chemical products created by the industry.
In the U.S. and elsewhere, it is necessary to develop a roadmap to guide the industry into a future where it reduces reliance on fossil fuels and supports international climate aims, as has been seen in other areas of the energy sector.
Petrochemicals continue to drive the global demand for oil, a trend that is not likely to change anytime soon due to the ongoing consumer reliance on many fossil fuel-derived products.
Countries and regional organisations must develop a clear strategy to shift reliance away from petrochemicals and curb production if they hope to meet their climate goals.
In addition, developing nations must be supported in manufacturing alternative products to prevent a growing dependency on plastics and other petrochemical products.

By: Felicity Bradstock
Bradstock writes for Oilprice.com.

Oil & Energy

‘Revamping Moribund Refineries ‘ll Address Rising Cost Of Petroleum Products’

Published

1 month ago

September 21, 2026

The Tide

An Energy Expert, Dr Joseph Obele, has called on the Federal Government and the management of the Nigerian National Petroleum Company Limited (NNPCL) to urgently restart the government – owned refineries insisting that it would help in curbing the rising cost of petroleum products.

He insisted that bringing back the moribund public refineries would further serve as a direct response to the plight of Nigerians as far as petroleum products is concerned.

Obele, who is also the Public Relations Officer (PRO) of the Petroleum Products Retail Outlets owners Association of Nigeria (PETROAN) and Lecturer at the Ignatius Ajuru University of Education, Port Harcourt, while reacting to the cost of petrol said the immediate and practical approach to addressing the current increase in petroleum prices is to restore production at the government-owned refineries and maximise every available refining capacity in the country.

“The immediate approach to the recent rise in petroleum prices is to restart the government-owned refineries”, he said.

Obele insisted that restoring functional government-owned refining capacity would increase domestic supply, reduce dependence on imported refined petroleum products and contribute to greater stability in the downstream petroleum market.

He urged the federal government to maximise all available refining capacity while continuing to encourage responsible private-sector Investment and healthy competition within the downstream petroleum industry.

Obele expressed concern over the continued rise in crude oil prices amid the ongoing tensions involving the United States and Iran and concerns around the Strait of Hormuz, warning that sustained supply risks could continue to put pressure on global petroleum prices.

He noted that Brent crude closed at about $105.83 per barrel on 16 September 2026, while WTI closed at about $102.43 per barrel.

The impact, the expert said, is already being felt in the Nigerian downstream market, with Premium Motor Spirit (PMS) reportedly selling in the range of ?1,400–?1,500 per litre in some locations, while Automotive Gas Oil (AGO) is selling above ?2,000 per litre.

“The immediate approach to the recent rise in petroleum prices is to restart the government-owned refineries”, Obele said.

According to him, restoring functional government-owned refining capacity will increase domestic supply, reduce dependence on imported refined petroleum products and contribute to greater stability in the downstream petroleum market..

He warned that a prolonged increase in petroleum prices would have a wider economic impact, particularly on transportation, food, medical services and other essential commodities.

“The continuous increase in the cost of petroleum products will invariably affect the prices of virtually all commodities and services. It will create additional inflationary pressure and deepen the financial hardship being experienced by Nigerians”, he stated.

Obele noted that the prolonged dormancy of government-owned refineries has had serious economic and employment implications across the petroleum value chain, affecting workers, contractors, marketers, transporters, businesses and other dependants of the sector.

According to him, a functional Port Harcourt and Warri Refinery would stimulate activities across the petroleum value chain, support employment and restore confidence among industry stakeholders.

In his words, ‘the Port Harcourt Refinery should become a measurable demonstration of government’s commitment to the welfare of Nigerians”

He further noted that the Port Harcourt Refinery had previously recorded production activities arguing that the focus should now be on resolving operational challenges and returning the facility to sustainable production.

“The time to restart the Port Harcourt Refinery is now. Nigerians cannot continue to bear the unbearable cost of petroleum products when domestic refining capacity is available. Every viable refinery should be optimally utilised in the national interest”

Obele emphasised that the objective should not be to undermine private-sector refineries but to ensure that all viable refining assets—government and private—contribute to national energy security, adequate supply and a competitive downstream petroleum market.

Lady Godknows Ogbulu

Oil & Energy

The Race To Cut Methane Emissions Is Exposing A Global Divide

Published

1 month ago

September 21, 2026

The Tide

Several countries worldwide have been working to reduce methane leaks, with some states making significantly more progress than others. The establishment of the Global Methane Pledge in 2021 at the COP26 climate summit has helped accelerate cleanup efforts; however, many countries are still falling behind on their methane-cutting pledges. Now, one of the world’s biggest methane polluters – Turkmenistan – is aiming to plug its mega leaks, which would help reduce global methane emissions and could encourage other countries to do the same.

The United States and the European Union led the Global Methane Pledge, which has since been signed by 159 countries that together contribute around 45 per cent of global human-caused methane emissions. The pledge aims to reduce methane emissions by at least 30 per cent below 2020 levels by 2030.

Many governments had already made ambitious pledges to reduce carbon emissions, but some had not previously sought to cut methane emissions, which heat the planet up to 80 times more than carbon dioxide over two decades. Methane has contributed around 30 per cent of the increase in global temperatures since the Industrial Revolution, and fossil fuels contribute around one-third of the methane emissions from human activity. Record production of oil, gas, and coal, combined with limited mitigation efforts, has kept emissions above 120 million tonnes (Mt) annually, according to the International Energy Agency (IEA).

The IEA’s annual Global Methane Tracker shows how much methane is emitted each year and tracks progress and failures. In 2024, abandoned wells and mines accounted for roughly 8 Mt of methane emissions, demonstrating the severity of leaving them unplugged. It is extremely hard to track methane emissions as they are widely underreported. Some parts of the world have little or no measurement-based data on methane emissions.

Therefore, the IEA has to rely on data from scientific studies, measurement campaigns, and large emissions events detected by satellites to estimate emissions each year. Some regions of the world, such as Europe, report their methane emissions far more accurately than other parts. The IEA estimated that global energy-related methane emissions are about 80 per cent higher than those reported by countries to the UN Framework Convention on Climate Change.

Some countries contribute heavily to the world’s methane emissions, particularly oil-rich countries that have not effectively decommissioned fossil fuel operations for decades, including Turkmenistan, the United States, Russia, Iran, and Venezuela. A 2023 Guardian assessment revealed that Turkmenistan was the worst country for methane mega-leaks. Some of Turkmenistan’s “super-emitters” leaked tonnes of methane every hour, from a single valve or pipeline, which is more than the emissions from an entire coal-fired power station. The assessment showed that the methane emissions alone from Turkmenistan’s two main fossil fuel fields contributed more to global heating in 2022 than the United Kingdom’s entire carbon emissions. The findings have led to significant public backlash and put pressure on the government to address the problem.

This year, Turkmenistan approved a massive clean-up project, as the country started plugging its mega-leaks. Turkmenistan has halted eight leaks by repairing corroded pipes, faulty wells, and failing flares, according to data from the United Nations. However, significant work is needed to reduce the country’s methane emissions. The UN Methane Alert and Response System (MARS) has delivered 192 alerts of methane plumes to Turkmenistan over the last year. According to the system, Turkmenistan had nine of the world’s top 50 worst methane leaks of the last six months.

Turkmenistan has improved its reporting systems in recent years and responded to around 20 per cent of the alerts with on-the-ground information about the leaks and potential plans to fix them. By comparison, the United States was sent 138 alerts and did not respond to any. The worst detected methane leak came from Mexico’s offshore oil and gas operations and measured a huge 37 tonnes per hour, equivalent to the emissions of over 7 million SUVs. Although Mexico responded to all 23 MARS alerts, it has yet to fix the leak.

Meghan Demeter, the programme manager of MARS, stated, “These mitigation cases are a proof point of what can be done with satellite data, especially in situations like Turkmenistan, where there are a lot of detections… This is a breakthrough in terms of having real documented mitigation action. But it is not yet a breakthrough in the overall magnitude of emissions. Eight cases is an incredible first step, but there are also a lot more sources in Turkmenistan that need to be addressed. We are in pretty constant communication, and the response rate is growing month by month. We’re seeing steady progress.”

UN tracking has also encouraged other countries in the region to plug leaks, with Kazakhstan, another former Soviet republic with ageing oil and gas infrastructure, stopping eight leaks following alerts. To date, Mexico, Brazil, and Argentina have 100 per cent response rates to MARS alerts, while Libya and Azerbaijan have high response rates. Meanwhile, the United States, Iran, Russia, and China failed to respond to any alerts.

By Felicity Bradstock for Oilprice.com 16

Oil & Energy

Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid

Published

2 months ago

September 7, 2026

The Tide

The Delta State Government has intensified efforts to boost electricity generation and supply in the state with plans to add 120 megawatts (MW) to the national grid through a partnership with Supply Power.

The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.

Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.

He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.

According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates

The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.

Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.

He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.

He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.

Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics

He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.

The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.

He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.

On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans

He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.

The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.

He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.

Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.