02 January 2008 03:48 [Source: ICIS news]
By John Richardson
SINGAPORE (ICIS news)--The Roman historian Pliny the Elder gave rise to the myth that ostriches bury their heads in the sand in order to avoid danger.
But in fact the much-maligned bird merely lies down in the dirt when predators pass by in order to make itself look like a bush.
Before you start wondering whether I’ve been consuming too much ethanol, there’s a point to this.
If Pliny the Elder were around today, he might be able to avoid going down in history as an inept ornithologist by identifying the real buriers of their hands in sand as some of those who work in the petrochemical industry.
"I don’t know why everyone’s getting so worked up about the environment - the laws of economics will ensure that science provides the answers. And, anyway, I don’t have to worry because I’ll be well past retirement by the time global warming starts to really have an effect," were comments made by an executive with an Asian petrochemical producer earlier this year.
The marginal good news is that you would be hard-pressed to go to a conference these days and not see at least one presenter run through a few smartly put-together slides on sustainability.
However, the rest of conference agendas are usually devoted to all the new crackers, aromatics and derivative plants that need to be built to meet soar-away Asian demand.
The optimism is almost as infectious as the H5N1 strain of bird flu - perhaps one of the biggest threats to economic growth in 2008. Most health experts believe it’s still only a matter of time before this particular strain of influenza triggers a pandemic, but their warnings have been knocked off the front pages by the global credit squeeze.
To return to the optimism surrounding Asia, as ubiquitous as slides on sustainability are claims that ?xml:namespace>
No need to worry, therefore, about likely recessions in the West is the accepted wisdom - although I am at a loss over how
The confidence of the industry reflects the confidence in the overall economy: The Times of India ran a cartoon of a bull wearing a Superman outfit in early November with the Sensex (the local stock market) logo across his shirt.
"It took 20 years for the Sensex Index to reach 10,000 and the second 10,000 was achieved in 20 months!" proclaimed the paper. Luckily, it didn’t go on to suggest that the next 10,000 would be achieved in 20 weeks, or maybe even in 20 days or 20 hours.
Such is the fevered excitement everybody seems to have forgotten that
The other well-documented problems of poor infrastructure and restrictive labour practices combine with the woeful public education system to leave
But the key difference is that investment in
Deutsche Bank produced an excellent report in November, drawing parallels between
But the bank concludes that much more far-sighted government policy and a stronger domestic economy should prevent
The old truth remains, though, that too many eggs have been placed in the
If growth in
The capacity will run flat out no matter what the market conditions - because the economics of the new
Not so, perhaps, some of the new crackers in
But everything else - including the timing of the next downturn, its duration and its severity - might seem like minor distractions compared with the environment.
Short term attention will certainly focus on the next down cycle, which is expected to begin in 2009 and end 2011. The higher-cost naphtha-based producers in
As one consultant put it "perhaps we need a Common Petrochemical Policy, a bit like the EU’s Common Agricultural Policy, where producers are paid to set aside plants in order to bring markets back into balance."
But the EU and many other governments are more likely to be evaluating further legislation to tackle climate change in 2008 rather than helping an industry which has once again shot itself in the foot by overbuilding.
The 2008 Beijing Olympics will bring the focus of the world’s media on the environmental disaster confronting
This is not journalistic exaggeration. I challenge anyone to deny that 700,000 premature deaths a year from air-borne pollution alone is anything short of a disaster that must threaten the economy in the medium term, never mind the impact of
But maybe if you are towards the end of your career, sitting on nice share options and a healthy pension plan, you can afford to bury your head in the sand - provided you don’t have a conscience.
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