Ron Corn discusses industry growth, middle-class expansion with BIC Magazine

​Look at the clock, and watch as one second ticks by. Just one second. In that single second, somewhere in the world, five people joined the middle class.


As of 2018, the global middle class is made up of 3.8 billion people, and represents a majority of the world population. By 2030, over a billion people will join the global middle class, which translates to a total world population of 5.3 billion.

"Two hundred million people each year are working their way from poverty and sustenance to the lowest rungs of the middle- class ladder, and this is a really good thing because it means they're getting safe food," said Ron Corn, senior vice president of petrochemicals for Chevron Phillips Chemical Co. (CPChem). "It means they're getting clean water, shelter, hygiene, access to medical care and basic transportation -- things that are improving their quality of life."

Most of these commodities, often taken for granted by the middle and upper classes, are products made from petrochemicals. Increased availability and usage of these products has spurred the surge of the middle class in recent decades, Corn said.

"The properties of plastics really can beat the properties of almost any other materials in many other applications," Corn said in a presentation at the Gulf Coast Industry Forum held recently in Pasadena, Texas. "They are lighter and more durable. They're water- and chemical-resistant, and you can mold them into different shapes and make them into all different kinds of things."

Citing an example, Corn recalled the milk jugs in "the old days" that were usually made of glass. The bottles would easily break and were also quite heavy, making them expensive to transport.

"The lightweight milk bottles make a big difference," he said.

Beyond advancing packaging for milk and other food products, plastics' applications include lightweight vehicles, which enable fuel savings, and polyethylene pipe that doesn't leak like many of the sewer and water pipes made of porous, less flexible materials.

"And certainly, the next time you go into a hospital room -- and hopefully, that won't be soon -- just look around at the materials they use and what it takes to maintain the hygiene and sanitation they use in a hospital," Corn said, referring to the ubiquitous presence of plastic products in health care.

The petrochemical industry has grown "at 4-5 percent each year for about 45 or 50 years," Corn said. "We talk a lot about supply, but the economists would say, 'You also need demand.' And that's all about the growth of the middle class."

 

Waste not


This boom in plastics has highlighted another challenge -- "a very, very deep challenge," Corn said -- that has captured the attention not only of the petrochemical industry but also of the entire world.

"You can see it on television and in the newspapers every single day: the pictures of the floating islands of plastic that are out in the Pacific," Corn said. "Those pictures are hard to look at. I can assure you, when we design our products and think about those things, this is not what we have in mind. That's not what the design basis was, and that's not where they're supposed to be."

It is vital for the industry to respond to this crisis, Corn insisted.

"We need to do something about it, and it starts with waste. Ninety percent of what's in the ocean comes from 10 rivers in Asia and Africa, and so we need to get it at the source," Corn said. "The problem with plastic is that it floats and you can see it, so we're the visible ones. But they very much have a waste-handling problem along these stretches of these rivers. As we continue to grow the middle class, most of that middle class and most of the people coming out of poverty are, frankly, in those regions of Asia and Africa, where there is the biggest problem."

Almost 90 percent of the next billion middle- class consumers will be from Asia.

Though many people recognize that the U.S. and Europe have very good solid waste management systems and companies that can adequately handle the waste being transferred to the oceans, Corn stressed that "ultimately, you don't want any landfill either.

"These products have value, and that's what we want to capture," Corn continued. "So step one is obviously to get it out of the ocean and get it out of the environment where it shouldn't be. Step two is to get it out of the landfills as well, because no one wants it in their backyard. There's value in this material." 

 

$139 billion versus $533 billion

 
In 2014, the United Nations Environmental Program (UNEP) commissioned the think tank Trucost to determine the annual environmental cost due to plastics. (Part of S&P Global, Trucost assesses risks relating to climate change, natural resource constraints, and broader environmental, social and governance factors.)

"They have all these algorithms and assumptions to look at it from the very beginning of the chain, when you're getting hydrocarbon out of the ground, all the way through production, manufacturing, transportation and consumption -- all the way to the end of the cycle," Corn said.

Trucost calculated that cost to be $139 billion -- "a staggering figure," Corn said. "That started to raise the awareness of a lot of the NGOs (nongovernmental organizations) and kind of [labeled] plastics as 'an evil thing.'"

Two years later, the American Chemistry Council (ACC) turned to Trucost to request a different calculation of the financial impact of plastics.

"They said 'Hey, using that same methodology and using those same assumptions and algorithms, tell us what the cost is to the alternatives to plastics,'" Corn said. "Much to their own surprise, they came up with a cost of $533 billion for the alternatives to plastics -- 3.4 times higher. And so it occurred to them that maybe the thing that you shouldn't do is jump to the higher cost alternative, but figure out how to work down the lower cost alternative, which was, in this case, the plastic solution."

Industry leaders, in turn, have calculated plastics' impact cost of $98 billion-$139 billion could be lowered "by looking at every step of the way, trying to optimize and trying to minimize the environmental footprint of everything that was done.

"Everything we touch, whether it's plastic or anything else, comes with an environmental footprint that can be measured by a company like Trucost," Corn said. "They came up with quite a list of things that we can all do."

In many cases, the petrochemical, oil and gas, and transportation industries have embraced these things, Corn said.

"CPChem has embraced this, and I would appeal to everyone that we can all do our own part, personally, to reduce the impact to the environment because we're all citizens," Corn said. "We all want to make this work. We waste a lot of stuff, and we need to be more cognizant of it. We can maintain our standard of living without some of these bells and whistles."

 

Lighter, stronger, recyclable

 

Corn said he believes the industry has the capability "to create a circular economy, because plastics are so recyclable in most cases," and CPChem is embracing this capability by doing things like working with customers to make plastics stronger "so we can [make more] lightweight stuff."

For example, CPChem is currently collaborating with a company that makes kayaks.

"We're working with them on how to make the kayak lighter but just as strong, if not stronger," Corn said. "If you own one or if you've ever carried one around, you can appreciate that it will help your environment a bit, or at least help out your back."

CPChem is also working with its customers on making its products more recyclable, Corn said. Certain products are less recyclable than others, Corn admitted, because they are manufactured with "multilayers of things with lots of different materials. "That can be a bit problematic to recycle, so we [want to] find solutions to that and still meet the consumer need," he said.

"Most people think if you're in the petrochemical business, you'd be against recycling because that would hurt new product demand. I can assure you in this industry, we look at that differently. We've built a very efficient -- if not the most efficient -- ethylene cracker in the world," Corn said, referring to CPChem's 1,725-kiloton-per-year ethane cracker located in Baytown, Texas. 

 

Future goals


Corn said it should come as no surprise to individuals familiar with the petrochemical industry that the ACC has three sustainability goals to help mitigate plastic waste and promote recycling.

"The first is, by 2030, that 100 percent of all plastics packaging is recyclable or recoverable," Corn said. "[The second] is, by 2040, that we're actually recycling, recovering and reusing 100 percent of all plastics. I hope you see that as a commitment from our industry to address this problem."

The third goal, Corn said, is for all ACC members to become members of Operation Clean Sweep Blue, a program to keep polyethylene pellets well-contained inside plants.

"Part of CPChem's sustainability reporting is to report our releases, and last year our release of pellets was a total of 4 pounds," Corn noted proudly.

Ultimately, the challenge of global waste must be addressed, Corn said.

"We feel so strongly about [creating] a better environmental footprint for our products," Corn concluded. "We see value in it. If we solve this problem, we can actually gain new markets and new applications."

 

This article first appeared in BIC Magazine.