There are relationships between the environment, the circular economy and renewable energy with the prices of the barrel

by Marco Arezio. Expert in the circular economy, polymer recycling, and industrial plastics processes. Founder of the rMIX platform, dedicated to the valorization of recycled materials and the development of sustainable supply chains.

Date: September 2020

The world, in recent years, has pushed hard to reduce dependence on fossil fuels, which are among the main causes of pollution, degradation of human health, destruction of the ecosystem, climate change, an economic power concentrated in a few hands that influences the lives of billions of people. But now, they could change the balance and the work done to date.

It had never been seen,

since the start of the monitoring of oil prices, that the price of WTI, the crude that is produced in the United States, had a negative market value:

– 37.63 dollars

Yes, there’s no mistake, that’s right. The American oil market, at this time,would be willing to pay customers who could reduce its stockpiles, having today an objective storage problem if demand for crude oil were to remain on today’s quantities.

They don’t celebrate, though, even in Europe where the North Sea Brent price is around 27 dollars per barrel and the outlook for the coming months, to hear the energy experts, are not the most rosy.

In fact, the blockade of cars, ships, aircraft and factories around the world, because of the coronavirus, has destroyed the demand for crude oil by exponentially increasing stocks, with the consequence of no longer knowing where to put the new crude oil production.

Moreover,the production cut of 10 million barrels per day, decided by the OPECmember countries, did not pay off as the fall in demand was higher than the cuts.

In this complex scenario, in addition to the crisis in the oil sector, which sees the minimum cost of crude oil at between 30 and 60 dollars per barrel, according to the types of extraction they employ, the circular economy, renewable energy and the environment sector sees serious problems on the horizon.

We can name a few:

• In many countries, because of the pandemic, single-use plastic products have returnedto use, ranging from bags, plates, glasses and cutlery.
  These products, if dispersed in the environment, are blamed as one of the main causes of the formation of micro and nano plastics that are dispersed in the oceans, rivers and seas, entering, through the food chain in our bodies with all the health consequences they imply.

• The car industry has been hit hard by the pandemic. The blockade of production around the world has caused the collapse of financial revenue to manufacturers of cars, trucks and industrial machines. In recent years, companies have been focusing on the delicate shift in production from thermal to electric engines, with large planned investments. These investments were necessary to fall within the maximum emission values decided by governments, especially those in Europe, in order to contain global warming. Now, the auto industry is wondering whether it is not appropriate to move at least the date for achieving these values by 5 years.

• The plastics recycling market has already had a difficult year in 2019, with strong price competition from the virgin raw materials sector. Although many states around the world are working to promote the recycling of plastic waste that is produced on a daily basis, this does not translate into real support for the recycling industry. The competition that exists between the prices of virgin plastic raw materials with those regenerated is not educational, socially useful and cost-effective for governments, which have the responsibility to manage and find correct solutions to waste disposal. With the collapse in oil prices that we are seeing these days, we can expect virgin polymer prices to become, definitively and in every sector, more competitive than those of regenerated polymers. This would block the plastic waste processing market by creating a huge environmental and economic problem.

• The great effort made to increase the production of renewable energy, such as solar, wind, biomass, geothermal and all other sources being studied and designed (energies from tides, waves, differences in water temperatures, hydrogen, nuclear fusion and other sources) could be impacted by economic accounts of production no longer in line with the current cost of crude oil. While knowing that technical-political foresight would say that alternative energies to oil, as renewables, will remain in our lives without ever running out, lobbies could play a decisive role in these periods, to slow the push towards renewable energy.

We hope that common sense will make it clear that the circular economy, the environment and renewable energies are the pillars of our lives that should not be discussed in order to put them in difficulty.