Marketing of Petrochemicals in a Global Economy - Term Paper Example

Description of the Petro-Chemical Industry:
Domestic (U.S.)
Raphael Edinger (43) theorizes “Energy is a fundamental need for human activity. Food and water supply, transport, and mobility services require energy input. Fossil fuels are predominant in our current energy system, providing low-cost and reliable energy services. Renewable resources are used as well, especially hydropower and wind power, but also biomass resources in developing countries.”

Consequently, the U.S. Department of Energy stated that a major percentage of its oil use is benefitted by the industrialized world. The petrochemical product needs are expected to occur in the transportation sector. The transportation sector has few economically competitive alternatives to oil as a source of major energy. In the developing world, the demand for petrochemical products, especially crude oil demand, is forecasted to rise to unprecedented levels by all energy-using sectors. The increasing need is apparent as emerging economies are rerouted from noncommercial fuels, which includes wood for home cooking and home heating, to diesel generators.

In addition, Edinger (43) reiterated several academic types of research indicate the global energy demand is forecasted to heighten significantly during the next decades to come. The United States Department of Energy wrote a reliable report that the International Energy Outlook 2001 where the projected worldwide energy use will reach as much as overshooting the 600 quadrillions Btu in 2020. The reliable forecast was revised to a lower figure from its original 1998 energy projection because of the economic crises in Asia which began in 1997 as well as the declining Russian economy. The unavoidable devaluation of the Russian money, ruble and the collapse of the Russian finance sector precipitated the declining Russian economy.

The countries produce petrochemical products to fill the continuing and increasing energy demands of factories, homes, and other customers. Thailand is one of the countries producing petrochemical products prioritizing filling the local petrochemical needs. Malaysia is another new country generating petrochemical products to supply the local petrochemical needs. Indonesia is a third nation producing petrochemical goods to supply the domestic petrochemical market. A fourth country, China, discovered petrochemical products to fill the oil-related needs of its homes, and local industries. With the new country competitors in the global petrochemical market, the prior competitors, United States, Europe, and Japan, realized a significant decline in the demand for petrochemical products in the global marketplace. Consequently, the three original petrochemical product producers had to contend with a lower 37 percent demand for their combined petrochemical products Edinger (43).