1 00:00:10,160 --> 00:00:13,280 Speaker 1: Hadrid listeners. We are getting close to being able to 2 00:00:13,320 --> 00:00:16,479 Speaker 1: release this next season, I swear. Today I want to 3 00:00:16,480 --> 00:00:19,120 Speaker 1: talk to you about a new report that's been released 4 00:00:19,120 --> 00:00:22,759 Speaker 1: from Carbon Tracker. The title is quite clever, The future 5 00:00:22,840 --> 00:00:26,800 Speaker 1: is not in plastics, well graduate reference there. The report 6 00:00:26,880 --> 00:00:30,520 Speaker 1: is looking at how the oil and gas industry has 7 00:00:30,560 --> 00:00:33,600 Speaker 1: for quite a while now been pointing to petrochemicals and 8 00:00:33,680 --> 00:00:38,479 Speaker 1: specifically plastics as its way out when demand for oil 9 00:00:38,640 --> 00:00:42,600 Speaker 1: and gas related to transportation and various other sectors declines. 10 00:00:43,080 --> 00:00:45,840 Speaker 1: They've been hanging a lot of their hopes on petrochemicals 11 00:00:45,840 --> 00:00:48,680 Speaker 1: and plastics, and what this new report tells us is 12 00:00:48,720 --> 00:00:52,159 Speaker 1: that the demand is just not there. The oil industry 13 00:00:52,280 --> 00:00:55,880 Speaker 1: is predicting that plastic use will just continue to grow 14 00:00:55,920 --> 00:01:00,080 Speaker 1: at four percent a year for several years, and they 15 00:01:00,120 --> 00:01:02,760 Speaker 1: are basing a ton of investments on that. They're also 16 00:01:02,880 --> 00:01:06,120 Speaker 1: getting a ton of investment dollars based on those projections. 17 00:01:06,360 --> 00:01:09,760 Speaker 1: But what Carbon Tracker found is that in fact, demand 18 00:01:09,880 --> 00:01:14,080 Speaker 1: will be decreasing four percent. That's quite a gap. On 19 00:01:14,200 --> 00:01:20,160 Speaker 1: top of being a bad investment financially. Of course, plastic 20 00:01:20,280 --> 00:01:22,800 Speaker 1: is quite bad for the planet, and not just on 21 00:01:22,840 --> 00:01:26,760 Speaker 1: the waste side. CO two is emitted in the production 22 00:01:26,959 --> 00:01:32,000 Speaker 1: of plastic. Plastic is often burned, emitting more emissions. For 23 00:01:32,040 --> 00:01:34,880 Speaker 1: the most part. Right now, plastic is being made with 24 00:01:34,959 --> 00:01:39,600 Speaker 1: the emissions of fracking and being sold as sort of 25 00:01:39,920 --> 00:01:43,040 Speaker 1: some closed loop way to deal with the emissions from 26 00:01:43,120 --> 00:01:46,200 Speaker 1: that process. So again, it's one of these things that 27 00:01:46,280 --> 00:01:50,000 Speaker 1: doesn't make sense from an environmental perspective, that doesn't make 28 00:01:50,040 --> 00:01:52,640 Speaker 1: sense from a climate perspective, doesn't make sense from an 29 00:01:52,720 --> 00:01:56,360 Speaker 1: environmental perspective, and that no one really wants. The oil 30 00:01:56,400 --> 00:01:59,560 Speaker 1: and gas industry has for a very long time used 31 00:01:59,640 --> 00:02:05,800 Speaker 1: the we're just fulfilling a demand defense for oil, gas, coal, plastic, 32 00:02:05,920 --> 00:02:09,440 Speaker 1: you name it. They very much use that argument on plastic, 33 00:02:10,080 --> 00:02:12,080 Speaker 1: but the data just doesn't back it up. Here to 34 00:02:12,160 --> 00:02:16,480 Speaker 1: explain all of that is this report's author, Kingsmill Bond 35 00:02:17,160 --> 00:02:20,760 Speaker 1: that conversation coming up in just a moment after this 36 00:02:20,880 --> 00:02:45,720 Speaker 1: quick message from today's sponsor, what initially brought you to 37 00:02:46,120 --> 00:02:48,280 Speaker 1: wanting to look into this issue and you know, spend 38 00:02:48,520 --> 00:02:50,560 Speaker 1: enough time on it to put out a report. 39 00:02:51,560 --> 00:02:55,000 Speaker 2: So Carbon Track is focused for many years has been 40 00:02:55,480 --> 00:02:59,040 Speaker 2: on the implications of the energy transition for financial markets, 41 00:02:59,600 --> 00:03:03,919 Speaker 2: and one of the primary implications in many sectors has 42 00:03:03,960 --> 00:03:07,560 Speaker 2: been stranded assets, which I believe is a term coined 43 00:03:07,639 --> 00:03:11,200 Speaker 2: or certainly popularized by Carbon Tracker. So we wanted to 44 00:03:11,200 --> 00:03:14,760 Speaker 2: look at plastics because it seems to be the epitome 45 00:03:15,320 --> 00:03:21,320 Speaker 2: of a sector where there's an enormous disconnect between what 46 00:03:21,480 --> 00:03:25,919 Speaker 2: the the sector is planning and what is more likely. 47 00:03:26,240 --> 00:03:29,680 Speaker 2: And in that disconnect you see a very large amount 48 00:03:29,680 --> 00:03:30,600 Speaker 2: of stranded assets. 49 00:03:31,280 --> 00:03:34,360 Speaker 1: I assume that you went into this knowing a certain 50 00:03:34,360 --> 00:03:38,520 Speaker 1: amount already. Was what were sort of the surprising discoveries 51 00:03:38,600 --> 00:03:41,920 Speaker 1: as you dug into it a little more deeply, Well, 52 00:03:41,960 --> 00:03:42,760 Speaker 1: a very good question. 53 00:03:42,960 --> 00:03:47,400 Speaker 2: The most surprising initial discovery was that everyone had different 54 00:03:47,480 --> 00:03:52,000 Speaker 2: numbers and how hard it was to get all of 55 00:03:52,000 --> 00:03:54,160 Speaker 2: the numbers to reconcile. So, of course, you know Common Tracker, 56 00:03:54,200 --> 00:03:57,640 Speaker 2: we're very much focused on data and numbers and analysis 57 00:03:57,640 --> 00:04:01,840 Speaker 2: and getting it completely accurate, and and we just found 58 00:04:01,840 --> 00:04:06,280 Speaker 2: it surprisingly difficult. I mean, fortunately, an extremely clear story 59 00:04:07,480 --> 00:04:10,920 Speaker 2: manifested itself, which meant that the discontinuity is between certain 60 00:04:10,960 --> 00:04:14,000 Speaker 2: different databases didn't really matter that much, but it was. 61 00:04:14,280 --> 00:04:16,920 Speaker 2: It's quite hard because you're dealing with lots of different industries. 62 00:04:16,960 --> 00:04:18,719 Speaker 2: So you've got the plastics industry, you've got the petro 63 00:04:18,760 --> 00:04:22,720 Speaker 2: chemical industry or the oil industry, you've got the recycling industry, 64 00:04:23,560 --> 00:04:27,080 Speaker 2: and interestingly enough, Feman even across countries, in between countries 65 00:04:28,240 --> 00:04:32,599 Speaker 2: that there's not complete agreement on on what the on 66 00:04:32,640 --> 00:04:34,359 Speaker 2: what the what the data is. That was for me 67 00:04:34,400 --> 00:04:35,159 Speaker 2: the biggest surprise. 68 00:04:36,160 --> 00:04:38,679 Speaker 1: It seems to me just in reading you know, oil 69 00:04:38,680 --> 00:04:41,640 Speaker 1: companies annual reports over the last few years, that plastic 70 00:04:41,720 --> 00:04:44,960 Speaker 1: has really been the thing that they claim is going 71 00:04:45,040 --> 00:04:50,120 Speaker 1: to save them when demand for transport fuels drops. Does 72 00:04:50,160 --> 00:04:52,479 Speaker 1: that seem to be you know, still the way that 73 00:04:52,480 --> 00:04:55,440 Speaker 1: a lot of them are at least talking about this 74 00:04:55,839 --> 00:04:58,640 Speaker 1: or planning in their in their financial plans. 75 00:04:59,320 --> 00:05:01,200 Speaker 2: Yeah, you put it very well. It's it's quite interesting 76 00:05:01,240 --> 00:05:05,520 Speaker 2: because it's not as if plastics was always like something 77 00:05:05,880 --> 00:05:08,000 Speaker 2: that you did on the with your all on the side. 78 00:05:08,040 --> 00:05:11,680 Speaker 2: Once you once you use the primary use of oil 79 00:05:11,880 --> 00:05:15,279 Speaker 2: in transportation and other areas, so it's quite surprising that 80 00:05:15,360 --> 00:05:18,320 Speaker 2: it's it's shot up the agenda and pretty much as 81 00:05:18,320 --> 00:05:20,040 Speaker 2: you say, what's happened over the last few years is 82 00:05:20,080 --> 00:05:22,400 Speaker 2: that all of the other growth drivers of oil have 83 00:05:22,480 --> 00:05:25,880 Speaker 2: kind of fallen by the wayside. So cars used to 84 00:05:25,880 --> 00:05:28,479 Speaker 2: be one of the four big growth vectors and and 85 00:05:28,480 --> 00:05:31,239 Speaker 2: and and as cars gone more efficient and electric vehicles 86 00:05:31,279 --> 00:05:33,240 Speaker 2: come into the mix, people and now said, well, you know, 87 00:05:33,279 --> 00:05:35,240 Speaker 2: even the IA is now saying, actually, we've probably reached 88 00:05:35,240 --> 00:05:37,720 Speaker 2: pete demand for oil from cars, and then the same 89 00:05:37,720 --> 00:05:41,240 Speaker 2: things starting to happen with trucks. And obviously, you know, 90 00:05:41,520 --> 00:05:45,119 Speaker 2: in recent months, the COVID crisis has taken the steam 91 00:05:45,160 --> 00:05:47,080 Speaker 2: out of the you know, the third big pillar, which 92 00:05:47,120 --> 00:05:51,840 Speaker 2: was airlines and air travel and and like petrochemicals has 93 00:05:51,880 --> 00:05:54,960 Speaker 2: become a kind of mantra for the oil industry that 94 00:05:55,040 --> 00:05:58,240 Speaker 2: thank goodness for petro chemicals because you know, that's where 95 00:05:58,279 --> 00:06:00,400 Speaker 2: all the growth lies. And it's quite interesting if you 96 00:06:00,480 --> 00:06:04,680 Speaker 2: if you take the data now from BP and the 97 00:06:04,720 --> 00:06:10,680 Speaker 2: i A, probably the two leading forecasters of the entire system, 98 00:06:11,160 --> 00:06:14,760 Speaker 2: then from our calculations, about half the growth of oil 99 00:06:14,800 --> 00:06:16,480 Speaker 2: demand in the next twenty years in the i A 100 00:06:16,640 --> 00:06:21,080 Speaker 2: numbers is actually from plastics. And suppressingly enough, it's basically 101 00:06:21,120 --> 00:06:23,480 Speaker 2: all of the growth in oil demand is coming from 102 00:06:23,480 --> 00:06:26,520 Speaker 2: plastics in the in our adaptation of the BP numbers. 103 00:06:26,560 --> 00:06:30,440 Speaker 2: So it has become really significant because everything else has 104 00:06:30,480 --> 00:06:31,559 Speaker 2: fallen fallen away. 105 00:06:32,040 --> 00:06:32,240 Speaker 1: Right. 106 00:06:32,520 --> 00:06:38,640 Speaker 2: To be clear, that's not a commentary on BP itself. 107 00:06:38,640 --> 00:06:42,040 Speaker 2: I mean, that's mainly the data forecast that they're talking about. 108 00:06:42,040 --> 00:06:45,000 Speaker 2: And interestingly, as you know, BP itself is putting out 109 00:06:45,040 --> 00:06:47,640 Speaker 2: of the petrochemical sector, possibly because they've looked at the 110 00:06:47,680 --> 00:06:48,960 Speaker 2: numbers the same way we've done. 111 00:06:49,000 --> 00:06:51,400 Speaker 1: Can you talk a little bit about the link between 112 00:06:52,120 --> 00:06:55,880 Speaker 1: the natural gas boom and the plastic boom. 113 00:06:56,680 --> 00:06:59,920 Speaker 2: With the fracking of gas, you've got a lot of energy, 114 00:07:00,000 --> 00:07:02,720 Speaker 2: E get a lot of ethane and propane, and they're 115 00:07:02,760 --> 00:07:06,120 Speaker 2: considerably cheaper, or they were considerably cheaper as a feedstock 116 00:07:07,000 --> 00:07:11,400 Speaker 2: than oil. And you know, all these companies had the 117 00:07:11,400 --> 00:07:15,280 Speaker 2: bright idea, well, let's turn this ethane into plastic and 118 00:07:15,320 --> 00:07:21,200 Speaker 2: then we can undercut our competitors and we can we 119 00:07:21,760 --> 00:07:25,600 Speaker 2: can make very high superprofits. That's basically was the idea. 120 00:07:26,080 --> 00:07:28,920 Speaker 2: And therefore that's where you've had this massive build up 121 00:07:29,120 --> 00:07:32,320 Speaker 2: of the petrochemical sector in the US based on apparently 122 00:07:32,400 --> 00:07:36,520 Speaker 2: cheap ethane. What they didn't factor on into the equation 123 00:07:36,720 --> 00:07:39,120 Speaker 2: was the fact that actually the price of oil has 124 00:07:39,120 --> 00:07:41,960 Speaker 2: now fallen so far that the price differential is not 125 00:07:42,040 --> 00:07:44,080 Speaker 2: nearly so big as they've thought. And then, of course, 126 00:07:44,960 --> 00:07:49,600 Speaker 2: much more importantly, because there's so much overbuild, the price 127 00:07:49,640 --> 00:07:51,400 Speaker 2: that they thought they were going to get. They're not 128 00:07:51,440 --> 00:07:54,640 Speaker 2: going to get because there's so much overcapacity that ethylene 129 00:07:54,640 --> 00:07:57,520 Speaker 2: prices have collapsed. So it's it's just been a very 130 00:07:57,560 --> 00:07:58,400 Speaker 2: poor strategy. 131 00:07:59,640 --> 00:07:59,960 Speaker 1: Yeah. 132 00:08:00,440 --> 00:08:07,840 Speaker 3: Yeah, I have seen some some data around the COVID 133 00:08:08,360 --> 00:08:13,160 Speaker 3: crisis actually helping to you know, booy some of the 134 00:08:13,200 --> 00:08:16,880 Speaker 3: plastic demand is that accounted for in this report. 135 00:08:17,600 --> 00:08:22,400 Speaker 2: It is, in fact, we tend to see COVID, as 136 00:08:22,440 --> 00:08:26,040 Speaker 2: as in so many other areas, as as a factor 137 00:08:26,040 --> 00:08:29,520 Speaker 2: which speeds up change. So probably the best data on 138 00:08:29,600 --> 00:08:32,640 Speaker 2: the expected impact on plastic demand this year comes from 139 00:08:32,640 --> 00:08:36,960 Speaker 2: Wood McKenzie and they to they add it all up. 140 00:08:38,040 --> 00:08:41,640 Speaker 2: What's the impact on plastic demand of increasing demand for 141 00:08:41,720 --> 00:08:44,920 Speaker 2: medical plastic for ppeus and gloves and stuff. And then 142 00:08:44,920 --> 00:08:47,959 Speaker 2: what's the impact of lower demand because of the economic shocks. 143 00:08:47,960 --> 00:08:50,240 Speaker 2: So we're buying less cars and we come go to 144 00:08:50,280 --> 00:08:52,800 Speaker 2: the shops that we're buying less less clothes, and they 145 00:08:52,880 --> 00:08:55,480 Speaker 2: add it all up, and actually, the the because you 146 00:08:55,640 --> 00:08:59,520 Speaker 2: use a thousand times or more plastic in a car 147 00:08:59,760 --> 00:09:03,000 Speaker 2: to use in a mask, the actual impact is to 148 00:09:03,040 --> 00:09:07,280 Speaker 2: have a four percent decline they estimate in plastics demand 149 00:09:07,280 --> 00:09:09,360 Speaker 2: this year. And that kind of if you haven't to 150 00:09:09,360 --> 00:09:11,120 Speaker 2: state the obvious. If you have four percent decline in 151 00:09:11,160 --> 00:09:15,520 Speaker 2: demand and a four percent increase in capacity, increased capacity, 152 00:09:15,559 --> 00:09:17,960 Speaker 2: you know, things looking quite quite ugly. But actually in 153 00:09:18,000 --> 00:09:21,560 Speaker 2: this report, we wanted to focus also on some of 154 00:09:21,600 --> 00:09:26,400 Speaker 2: the longer term impediments to the demand growth. 155 00:09:27,760 --> 00:09:30,560 Speaker 1: Right, could you talk a little bit about those longer 156 00:09:30,679 --> 00:09:37,640 Speaker 1: term impediments and what you're seeing in you know, beyond COVID. Yeah, 157 00:09:37,840 --> 00:09:38,640 Speaker 1: I think you know. 158 00:09:38,640 --> 00:09:43,720 Speaker 2: There were three impediments we wanted to put on which 159 00:09:43,760 --> 00:09:46,280 Speaker 2: we focus. I mean, the first is just thinking about society. 160 00:09:47,440 --> 00:09:49,959 Speaker 2: People always sneer at me as a finance guy when 161 00:09:50,000 --> 00:09:52,959 Speaker 2: I talk about society, but it's you can't completely ignore 162 00:09:54,000 --> 00:09:58,440 Speaker 2: the wishes and aspirations of the world's populations because you 163 00:09:58,520 --> 00:10:01,520 Speaker 2: have these two really unsurmounted problems at the plastics industry 164 00:10:01,559 --> 00:10:03,319 Speaker 2: is not being able to address. The first is that 165 00:10:03,640 --> 00:10:07,400 Speaker 2: they're a very large carbon footprint. It slightly depends how 166 00:10:07,400 --> 00:10:08,920 Speaker 2: you're calculated, but the points of me years, they have 167 00:10:08,920 --> 00:10:12,320 Speaker 2: a large carbon footprint that's planning to double over the 168 00:10:12,320 --> 00:10:14,520 Speaker 2: next twenty years when the rest of the world is 169 00:10:14,520 --> 00:10:17,600 Speaker 2: trying to get to zero, So that doesn't really compute. 170 00:10:17,679 --> 00:10:20,680 Speaker 2: And at the same time, you've got this massive amount 171 00:10:20,720 --> 00:10:24,880 Speaker 2: of plastic ending up in the ocean, and in the 172 00:10:24,880 --> 00:10:28,240 Speaker 2: Breaking Breaking the Plastic Wave reports, systemic estimates that at 173 00:10:28,559 --> 00:10:31,880 Speaker 2: eleven million times a year a plastic going into the ocean, 174 00:10:31,960 --> 00:10:33,880 Speaker 2: and they say, look, by twenty forty, that's going to 175 00:10:33,920 --> 00:10:36,439 Speaker 2: be as much plastic in the ocean as fish. And 176 00:10:36,679 --> 00:10:39,360 Speaker 2: the point simply is that therefore there's a lot of pressure, 177 00:10:39,400 --> 00:10:43,560 Speaker 2: from a lot of societal pressure to do something. So 178 00:10:43,720 --> 00:10:45,679 Speaker 2: so far, so good, and that's very much appreciated. I 179 00:10:45,720 --> 00:10:48,640 Speaker 2: think the two additional factors that we really drew attention 180 00:10:48,720 --> 00:10:51,800 Speaker 2: to in this report. The first is is technology, and 181 00:10:51,840 --> 00:10:54,400 Speaker 2: in a similar way to what you've seen elsewhere in 182 00:10:54,400 --> 00:10:58,880 Speaker 2: the energy sector, new technologies are coming along which make 183 00:10:58,920 --> 00:11:03,520 Speaker 2: it possible of a plastics functionality but without the same 184 00:11:03,559 --> 00:11:06,480 Speaker 2: amount of plastic. And that's what this report Breaking the 185 00:11:06,480 --> 00:11:09,400 Speaker 2: Plastic Waves done, is it's analyzed that it's it's looked 186 00:11:09,400 --> 00:11:14,400 Speaker 2: at the three classic areas of reduced and substitute and recycle, 187 00:11:14,480 --> 00:11:17,720 Speaker 2: it's costed them in in tremendous detail, and it's figured 188 00:11:17,720 --> 00:11:20,440 Speaker 2: out that you can have the same plastics functionality but 189 00:11:20,520 --> 00:11:25,040 Speaker 2: at half the amount of plastics and actually, interestingly enough, 190 00:11:25,040 --> 00:11:28,480 Speaker 2: at zero point seven million more jobs. So there's some 191 00:11:28,559 --> 00:11:32,960 Speaker 2: interesting new technologies and new ideas materializing to meet the 192 00:11:33,040 --> 00:11:37,760 Speaker 2: aspirations of society. And then finally you have politicians are 193 00:11:37,760 --> 00:11:42,120 Speaker 2: actually starting in certain areas to put these to put 194 00:11:42,120 --> 00:11:44,800 Speaker 2: these ideas into practice. And you know, we highlighted in 195 00:11:44,800 --> 00:11:47,679 Speaker 2: this report what's going on in Europe and China above all, 196 00:11:47,679 --> 00:11:49,400 Speaker 2: but you could talk also about some of the subs 197 00:11:49,400 --> 00:11:53,079 Speaker 2: going on India and in Africa. But if I highlight 198 00:11:53,160 --> 00:11:58,440 Speaker 2: what's happening in Europe specifically, the the the the European 199 00:11:58,880 --> 00:12:02,600 Speaker 2: Commission now is talking about having a at tax on 200 00:12:02,640 --> 00:12:05,560 Speaker 2: plastic waste, a non recycle plastic waste of of eight 201 00:12:05,640 --> 00:12:07,880 Speaker 2: hundred euros a time, so basically one thousand dollars a ton, 202 00:12:08,960 --> 00:12:12,319 Speaker 2: which is quite close incidentally to the externality costs that 203 00:12:12,360 --> 00:12:16,640 Speaker 2: we calculate. And they're also saying that you've got to 204 00:12:16,640 --> 00:12:20,520 Speaker 2: have all plastic packaging is going to have to be 205 00:12:20,559 --> 00:12:23,560 Speaker 2: recyclable by twenty thirty. That don't forget, it's a third 206 00:12:23,600 --> 00:12:25,920 Speaker 2: of all plastics, just over a third of all plastics 207 00:12:26,160 --> 00:12:29,400 Speaker 2: is in plastic packaging. And then they're forcing companies to 208 00:12:29,480 --> 00:12:31,240 Speaker 2: use more recycle material in their products. 209 00:12:31,240 --> 00:12:32,199 Speaker 1: So the point. 210 00:12:31,960 --> 00:12:38,000 Speaker 2: Simply is that in response to the demands of society 211 00:12:38,280 --> 00:12:43,280 Speaker 2: the opportunities made possible by technology, you're now having politicians 212 00:12:43,320 --> 00:12:46,800 Speaker 2: actually driving change. And the suggestion we make in this 213 00:12:46,840 --> 00:12:49,560 Speaker 2: report is that some of the solutions which are being 214 00:12:49,600 --> 00:12:52,560 Speaker 2: found in Europe and are likely to be found in 215 00:12:52,679 --> 00:12:55,960 Speaker 2: China are going to be rolled out across the rest 216 00:12:56,000 --> 00:12:59,720 Speaker 2: of the demand vectors in the world, across the rest 217 00:12:59,720 --> 00:13:03,280 Speaker 2: of the merging markets, and that itself, all of this 218 00:13:03,800 --> 00:13:09,199 Speaker 2: really starts to question the industry's assumption of a massive, continued, 219 00:13:09,640 --> 00:13:11,400 Speaker 2: eternal growth in plastic demand. 220 00:13:11,520 --> 00:13:14,920 Speaker 1: In the US, there are several fairly large, you know, 221 00:13:14,960 --> 00:13:20,160 Speaker 1: patrick chemical facilities being built right now that aren't even 222 00:13:20,200 --> 00:13:23,480 Speaker 1: online yet and already seem like they're destined to lose money. 223 00:13:24,440 --> 00:13:27,040 Speaker 1: Are you seeing any kind of a slowdown in like 224 00:13:27,160 --> 00:13:30,880 Speaker 1: project financing on these kinds of you know, the at 225 00:13:30,880 --> 00:13:34,640 Speaker 1: then cracker facilities, the sort of big petrochemical plants. 226 00:13:36,080 --> 00:13:38,679 Speaker 2: Well, of course the ones which have been finance are 227 00:13:38,679 --> 00:13:42,800 Speaker 2: still going ahead, but I'm absolutely convinced that behind the 228 00:13:42,840 --> 00:13:48,480 Speaker 2: scenes people are now already significantly trying to curtail the expansion, 229 00:13:48,520 --> 00:13:52,520 Speaker 2: and not sadly because of anything that we've written, or 230 00:13:54,320 --> 00:13:58,040 Speaker 2: because they've suddenly got religion. No, it's because of the price. 231 00:13:58,240 --> 00:14:01,680 Speaker 2: The price of intermediate chemicals like has collapsed, and as 232 00:14:01,720 --> 00:14:05,800 Speaker 2: this is obvious that that you're expanding into US into 233 00:14:05,920 --> 00:14:11,880 Speaker 2: an oversupplied market. So so I think I think we 234 00:14:12,040 --> 00:14:14,520 Speaker 2: will see many more cancelations over the course of the 235 00:14:14,520 --> 00:14:16,800 Speaker 2: next couple of years. And I think we'll also see 236 00:14:16,800 --> 00:14:19,720 Speaker 2: some big be write downs as people who've sunk a 237 00:14:19,760 --> 00:14:23,160 Speaker 2: couple of billion dollars into building a big pet camp 238 00:14:23,160 --> 00:14:28,600 Speaker 2: plant and on the anticipation of selling it selling the 239 00:14:28,640 --> 00:14:31,040 Speaker 2: material into the emerging markets, as they begin to realize 240 00:14:31,040 --> 00:14:32,160 Speaker 2: that that market's not there. 241 00:14:33,280 --> 00:14:36,320 Speaker 1: Is there one part of this report that you most 242 00:14:36,400 --> 00:14:39,360 Speaker 1: hope people kind of pick up on and pay attention to. 243 00:14:41,520 --> 00:14:44,600 Speaker 2: I think the the one part of the report that 244 00:14:45,360 --> 00:14:49,920 Speaker 2: we wanted to be was our original focus, and it's still 245 00:14:49,920 --> 00:14:54,360 Speaker 2: really significant, is to think not just about the plastics industry, 246 00:14:54,440 --> 00:14:59,840 Speaker 2: but to think about the implication of low growth in 247 00:15:00,000 --> 00:15:04,640 Speaker 2: the plastics industry for the oil industry. And there's a 248 00:15:04,640 --> 00:15:06,480 Speaker 2: lot of talk at the moment about peak oil and 249 00:15:06,520 --> 00:15:10,680 Speaker 2: have we hit peak oil demand? And I don't particularly 250 00:15:10,680 --> 00:15:13,760 Speaker 2: want to focus on that, but this debate is really 251 00:15:13,800 --> 00:15:20,200 Speaker 2: significant because if between half and all of expected demand 252 00:15:20,200 --> 00:15:24,200 Speaker 2: growth from oil is actually from plastics, and if that 253 00:15:24,680 --> 00:15:28,560 Speaker 2: growth in and of itself can now be questioned, then 254 00:15:29,720 --> 00:15:33,840 Speaker 2: it just becomes considerably easier to question whether or not 255 00:15:35,080 --> 00:15:37,400 Speaker 2: oil growth itself, oil demand growth itself is going to 256 00:15:37,640 --> 00:15:41,520 Speaker 2: regain its twenty nineteen levels. So that's, I guess, the 257 00:15:42,040 --> 00:15:43,840 Speaker 2: other angle we wanted to look at in this report. 258 00:15:43,960 --> 00:15:47,080 Speaker 2: The other thing, slightly original thing that we did is 259 00:15:47,120 --> 00:15:51,440 Speaker 2: we figured out the size of the plastic externalities, and 260 00:15:52,360 --> 00:15:57,080 Speaker 2: just the points of me being that this is not 261 00:15:57,720 --> 00:16:02,280 Speaker 2: an industry which, as how do I put it mildly, 262 00:16:03,040 --> 00:16:07,000 Speaker 2: it's not an industry which has been particularly receptive to 263 00:16:09,400 --> 00:16:12,160 Speaker 2: paying for the negative consequences of what it does right. 264 00:16:12,320 --> 00:16:15,160 Speaker 2: And you know, the cost pert ton is about thousand 265 00:16:15,160 --> 00:16:17,160 Speaker 2: dollars a time, which which actually sounds like a lot, 266 00:16:17,200 --> 00:16:19,200 Speaker 2: but on a per person basis not very much. Actually 267 00:16:19,200 --> 00:16:22,960 Speaker 2: it's about it's forty six dollars per person globally. So 268 00:16:23,440 --> 00:16:24,960 Speaker 2: the point to me is that you have an industry 269 00:16:25,000 --> 00:16:27,920 Speaker 2: which is which is polluting a lot and creating a 270 00:16:27,960 --> 00:16:30,520 Speaker 2: lot of waste, and people don't like it, and actually, 271 00:16:30,520 --> 00:16:34,600 Speaker 2: therefore I think is extremely vulnerable to any attempts to 272 00:16:35,080 --> 00:16:38,160 Speaker 2: change it, and that is likely to play out over 273 00:16:38,160 --> 00:16:38,960 Speaker 2: the next few years. 274 00:16:39,000 --> 00:16:42,080 Speaker 1: It's a lot easier to talk about the negatives of plastic. 275 00:16:42,320 --> 00:16:44,280 Speaker 1: It's harder for them to make the case that they 276 00:16:44,320 --> 00:16:49,560 Speaker 1: do with oil, that it's just a totally necessary part 277 00:16:49,600 --> 00:16:53,080 Speaker 1: of life or a central piece of the economy. You know, 278 00:16:53,720 --> 00:16:55,480 Speaker 1: I don't know. It seems to me like it should 279 00:16:55,480 --> 00:17:00,520 Speaker 1: be that much much more vulnerable to criticism. 280 00:17:00,640 --> 00:17:00,840 Speaker 3: Yeah. 281 00:17:00,880 --> 00:17:02,800 Speaker 2: No, I think the other point will as you know 282 00:17:02,920 --> 00:17:05,920 Speaker 2: very well, the industry always says, look, you know, you 283 00:17:06,040 --> 00:17:09,040 Speaker 2: desperately need plastic for ppe equipment, and you need plastic 284 00:17:09,160 --> 00:17:12,480 Speaker 2: for you know, iPhone covers, and you know, and and 285 00:17:12,480 --> 00:17:15,960 Speaker 2: and and they do the commission these wonderful studies saying 286 00:17:15,960 --> 00:17:18,800 Speaker 2: that plastic is better than glass because it's lighter weight 287 00:17:18,840 --> 00:17:21,080 Speaker 2: and all the rest of it. And and the answer 288 00:17:21,119 --> 00:17:23,840 Speaker 2: to all of this stuff is just to go, okay, guys, 289 00:17:23,920 --> 00:17:26,600 Speaker 2: that's great. I mean, we know your products great, thank 290 00:17:26,640 --> 00:17:29,359 Speaker 2: you very much, but just you know, pay for picking 291 00:17:29,400 --> 00:17:31,840 Speaker 2: the picking the stuff up after people have used it, 292 00:17:31,880 --> 00:17:34,240 Speaker 2: and pay for all of the health costs and the 293 00:17:34,359 --> 00:17:36,720 Speaker 2: and and the and the ocean costs. You know, if 294 00:17:36,720 --> 00:17:39,000 Speaker 2: it's so great, then just pay for it. It's not 295 00:17:39,280 --> 00:17:43,919 Speaker 2: not reasonable, right, And I think that's that's often lost 296 00:17:43,960 --> 00:17:47,359 Speaker 2: in the debate about you know how great plastic is 297 00:17:47,119 --> 00:17:48,880 Speaker 2: is that there are it is great, but there are 298 00:17:48,880 --> 00:17:50,760 Speaker 2: costs which are borne by other people, and you need 299 00:17:50,800 --> 00:17:51,240 Speaker 2: to pay for. 300 00:17:51,200 --> 00:17:57,040 Speaker 1: Them, right right, Yeah, yeah, thank you so much. 301 00:17:57,200 --> 00:17:57,560 Speaker 3: Very much. 302 00:17:58,160 --> 00:18:00,480 Speaker 2: Very enjoyable, very enjoyable conversation. 303 00:18:00,880 --> 00:18:17,280 Speaker 1: Yes, thank you, I appreciate it. All right, that's it 304 00:18:17,359 --> 00:18:21,159 Speaker 1: for this time. Keep your eyes on the feed for 305 00:18:21,320 --> 00:18:25,480 Speaker 1: our next season coming soon. I'll also be dropping some 306 00:18:25,640 --> 00:18:28,919 Speaker 1: special preview episodes for some of the other climate shows 307 00:18:28,960 --> 00:18:32,480 Speaker 1: coming up on the Critical Frequency Network, and we'll be 308 00:18:32,560 --> 00:18:35,000 Speaker 1: back here soon. Thanks for listening, and we'll see you 309 00:18:35,000 --> 00:18:35,440 Speaker 1: next time.