Are Fossil Fuel Frackers Overselling Plastic?

By Lila Holzman and Conrad Mackerron

Alarm bells have long been ringing about the controversial process of hydraulic fracturing or “fracking”. Opposition has focused on community health impacts from air and water emissions as well as climate change impacts from leaking methane, a potent greenhouse gas.

The shale oil or gas that is extracted must be transported by way of pipelines that have also sparked opposition from communities concerned about risks to their land and natural resources. Such has been the case for indigenous groups fighting the Dakota Access Pipeline and the Keystone XL Pipeline, which recently leaked as much as 210,000 gallons of crude.

Renewable energy has added a new layer of urgency to the debate. As the cost of renewables and storage continue to drop, the argument for fossil fuel-based energy becomes much less valid. So how are the fossil fuel companies preparing for decreased demand from the energy market? One new direction is: Plastics.

A byproduct of the fossil fuel fracking process is a gas called ethane. Ethane, like methane, is a climate-forcing greenhouse gas that also contributes to the creation of ground-level ozone and increases risk of asthma. Recent reports show atmospheric levels of ethane have been dramatically underestimated. Ethane extracted from fracking can be converted in “cracking plants” to ethylene, a common building block of plastics. Communities living near crackers are finding themselves increasingly exposed to toxic air quality and health impacts. These cracking plants are popping up across the country, particularly in the Gulf Coast as well as the Mid-Atlantic/Northeast.

As companies build new infrastructure that will exist for years to come, investors must ask: is this a viable pathway to ensure future value? Are plastics going to solve the coming demand crisis oil and gas companies will face as carbon constraints grow?

From a Climate Perspective

Perhaps unsurprisingly, some of the companies at the forefront of this movement include familiar names like Exxon, Shell, and Chevron. Exxon’s recent Energy & Carbon Summary refers to investments being made to meet “increasing demand for chemical products.” While Exxon deserves credit for recently making strong commitments to reduce methane emissions, it is frustrating that the company may be simultaneously increasing reliance on the climate-impacting process involved in converting ethane to ethylene.

Another climate related problem is the tendency to locate cracking facilities in high-risk flood zones, such as those that were inundated by Hurricane Harvey. The New York Times recently noted that:

“A Chevron Phillips plant reported one of the largest Harvey-related emissions of chemicals into the air. But even as flooding risks increase, chemical companies continue to build in vulnerable areas. A boom in plastics manufacturing has brought billions of dollars of investment to the Gulf shoreline. The Chevron Phillips site had been in the midst of adding a new $6 billion ethane processor, one of the biggest investments in the Gulf’s fast-growing petrochemicals industry.”

This build-up of operations in areas prone to flooding, especially as climate-related flooding increases in intensity and frequency, is deeply troubling.


Flooding in Houston caused by Hurricane Harvey that released toxic chemicals and likely will occur again.

Focusing solely on associated greenhouse gas emissions, it should not go without saying that by way of the Paris Agreement, the world has recognized and committed to the need to keep the global temperature increase to well under two degrees. Companies that shift emission-heavy processing from production of energy to plastics are just as accountable in terms of climate risk.

From a Waste Perspective

Investing in increased plastic production will become increasingly risky. The inability of society to recycle more than 14% of plastic packaging worldwide challenges the wisdom of unfettered plastic production. If governments and industry cannot competently recycle even one-third of current plastic packaging levels, how can it be expected to make sufficient progress as the production of plastics triples as expected by 2050?

Recent studies have shown far higher rates of plastic ocean pollution than previously believed. This looming threat has in turn has raised ocean plastics pollution as an environmental issue of high importance, leading to several important actions by governments, environmental groups, and corporate users of plastic packaging. Groups like the global Break Free From Plastic campaign have begun to challenge widespread single-use plastic uses in the consumer goods sector and to push to eliminate non-essential uses of plastic. In December, nearly 200 nations at a U.N. Environment Assembly in Nairobi pledged to eliminate plastic pollution in world oceans, a potential precursor to a treaty on plastics.



Ocean plastic pollution is sparking global action to reduce plastic consumption.

As You Sow’s Waste program has led the way on this issue by pressing consumer goods brands like Procter & Gamble and Unilever to make their packaging recyclable and moving McDonald’s to stop using polystyrene foam globally.

In January of this year alone, the EU released a plastics policy strategy, the UK Prime Minister unveiled a plastics waste plan, and UK retailer Iceland agreed to phase out all plastic packaging. Governments, activists, and concerned citizens are clearly challenging the current wasteful single use plastic model, which could lead to less demand for plastics.

Two Steps Forward. Why go back?

Worldwide, progress is being made to shift away from fossil fuels as energy markets transition to clean energy sources. While producing plastic is now looked to as a potential supplement to burning fossil fuels, high hopes for plastic profits as an alternative revenue source may fall flat. As demand for fossil fuel energy decreases, plastic producers, who currently benefit from oil and gas waste products will likely be forced to start absorbing a greater share of the cost of producing fossil fuels, greatly increasing their production costs. Plastic will no longer be cheap, and demand may drop.

Investors should be wary of this silver (plastic?) bullet and continue to move companies to prepare for falling fossil fuel demand in a way that creates long-term, sustainable value for all stakeholders.