For Oil, There’s a Green Swan Lurking in This Plastic Bag

For Oil, There’s a Green Swan Lurking in This Plastic Bag

China has unveiled plans to curb the use of non-degradable plastic bags in supermarkets and malls across major cities as well as food-delivery services.. In its most recent Energy Outlook, BP Plc identified "non-combusted" demand for oil as the single-biggest source of projected growth through 2040, with single-use plastics accounting for almost 40% of that 5.5 million barrels a day.. Under an alternative future in which governments phase out single-use plastics aggressively and ban them altogether by 2040, BP's outlook has global oil demand peaking in the late 2020s.. It doesn't take a global ban on single-use plastics to present a problem to an oil industry that has (a) made petrochemicals a central part of its growth story and (b) begun deploying billions already in projects ranging from Saudi Arabian Oil Co.'s Asian joint ventures to Exxon Mobil Corp.'s shale-linked crackers on the Gulf coast.. The cloud of uncertainty gathering over future oil demand raises the industry's cost of capital, manifested in demands for higher cash payouts.. BlackRock Inc.'s Larry Fink made much the same point in last week's climate letter (including the potential for green swans, though he didn't use that phrase)..