The big 3 — Singapore’s Petrochemical industry disproportionate contribution to greenhouse gas emissions

Original article from Parliamentary question response — 75% of Singapore’s industrial emissions are from Petrochemical industry.

Spreadsheet figure source with sources links. Some actual data is not available publicly and is approximated. All data approximated to 2014-2016 period to as best as possible with available data.

We often hear rhetoric about Singapore’s “limitations” on greenhouse gas emissions, often citing details such as small land area, but when we take a look at Singapore’s greenhouse gas inventory breakdown, when we start to ask the tough questions about where those emissions are coming from, another story starts to appear.

Singapore has a moderately sized Petrochemical industry considering that it is a major port city in Asia — 1.4 mil barrels per day split between 3x operators (Big 3x)

1. 43% ExxonMobil
2. 36% Shell
3. 21% Petrochemical Corporation of Singapore (PCS)

Together these 3 operators within Singapore’s territory contribute 15–20 MT CO2eq/yr of greenhouse gas emissions (30-45% of total emissions), employ an estimated 50,000 workers out of a total workforce of >3.7 million and produce SGD 8–12 bil in value add (est 3–6% of GDP), with around S$280,000 value-add per worker, a figure often cited by the Singapore government as justification for supporting these industries. Climate change however, forces us all to reconsider just what is meant by “value” in the context of a climate crisis that is an existential threat to civilization and is caused by the uncontrolled carbon pollution from these industries. Using data compiled from online sources, per worker the greenhouse gas emissions from the big 3 is estimated to be 60x Singapore’s average and on an emissions intensity per $ of GDP their operation is estimated to be 10x Singapore’s average.

As the saying goes in economics — “there is no free lunch” and Singapore’s petrochemical industry is no exception. The message from climate scientists in the IPCC report from October 2018 sounds a clear unambiguous warning that has been echoed for decades — collectively as a society, we have been cheating ourselves collectively as a human species by enjoying the financial profits by uncontrolled carbon pollution from fossil fuels, and pushing off the climate impacts for future generations to bear the consequences. In the parlance of economics, this is an externalities cost borne by everyone on the planet now and far into the future, but not sufficiently reflected in the price of fossil fuel energy and products. The story is even more bleak, because the intensity and frequency of severe weather is now causing material losses around the world — fires, flood, tropical cyclones, heat waves, and those who are realizing the benefits — such as Singapore, are not those who are paying the realized costs of climate change. It is the story of conflict of interest on an international, income level, and inter-generational scale.

According to an IMF report from Sep 2019 — the estimated global cost of inaction in business-as-usual scenario is median -23% of global GDP over 80 year period from 2020 to 2100, with tail risks of potentially infinite costs including the possibility of human extinction. In the words of the IPCC report section C2 :

Pathways limiting global warming to 1.5°C with no or limited overshoot would require rapid and far-reaching transitions in energy, land, urban and infrastructure (including transport and buildings), and industrial systems (high confidence). These systems transitions are unprecedented in terms of scale, but not necessarily in terms of speed, and imply deep emissions reductions in all sectors, a wide portfolio of mitigation options and a significant upscaling of investments in those options

That’s a pretty high price to pay to keep the big 3x in operation for 3–6% of GDP and 25,000 workers.

One of the Big 3, ExxonMobil has been studying climate change for a long time, and has developed a proxy cost of carbon of USD $80/ton CO2eq, which is consistient with recommendations from Economists in the range $40-$80/ton. This price reflects several considerations

1. Cost of mitigation technology, including carbon capture
2. Risk-adjusted long term costs on the economy from climate breakdown
3. What would be required to incentivise a switch in consumer behavior.

Economic analysis such as the Stern Review suggest a total cost of carbon pollution mitigation in the range of 1–4% of GDP over 80 years. Seems like a good return on investment when compared to -23% with tail risk of infinite costs of delayed action. Unfortunately, the current Singapore government greenhouse reduction policy does not appear to be embracing the reality of these risks and ethical concerns, and is openly acknowledging to be behind schedule by 10 years, committing only to peak emissions by 2030 in direct contradiction to the IPCC recommendation to peak in 2020.

Using a cost of $80/ton, assuming that represented additional operating cost for the Big 3 in the form of carbon capture for all of its facilities, the average value-add per worker from this industry in a worst case could drop by -9% from $280,000 to $260,000 this is a worst case estimate and likely under such economic pressure the Big 3 may likely develop technology that would cushion this impact.

No doubt such a carbon capture project would meet the IPCC criteria for far reaching and unprecedented, however seems like a reasonable price to pay to “do our part” to safeguard the stability of the climate for the future generations as global citizens. Could such a change have an impact on jobs not only in the Petrochemical sector, but also cascade into other industries in Singapore? Maybe, however with careful planning by the state, and use of new carbon tax revenue and Keynesian based economic stimulus packages, it is within the realm of realistic possibilities that alternative jobs equal to or exceeding those at risk by divesting from this polluting sunset industry can be incentivised by state led initiatives, or in the worst case a transitionary income relief program to assist workers while they are re-training and looking for work. Unprecedented, maybe, large scale, yes, outside the realm of what is humanly possible — certainly not.

What product is the company selling that is driving the demand? Some of the products are exported, however much of the products are consumed domestically including for military use. While it is true that fossil fuels are the base feedstock for a wide range of materials, the bulk of the production goes to four main products

1. Land transportation fuels — diesel, gasoline
2. Aviation and marine fuels
3. HDPE, LDPE — plastics

Sound familiar? Understanding how Singapore’s Petrochemicals industry intereacts with the rest of the economy can help to explain more in the context of the political challenges in Singapore for reducing emissions from manufacturing, vehicles, air travel, the port, and reducing the use of single-use plastics. All of these environmental challenges have a common denominator in Singapore — the Big 3.

The story continues

In 2016, just one year after signing the Paris Agreement, the Singapore government decided to expand this industry without any public mention of mitigation investments, so unless otherwise specified one can only deduce that this decision would likely result in emissions from this industry increasing, instead of decreasing as is mandated by the Paris Agreement. — Furthermore, one of Singapore’s Big 3 carbon polluters, and currently multiple lawsuits in the United States on its public misinformation on risks of climate change. Despite acknowledging the importance of reducing greenhouse gas as part of the global effort to limit global warming — in 2014 one year before the Paris Agreement and 4 years after the formation of the National Climate Change Secretariat — at the opening ceremony for expansion of ExxonMobil Chemical Plant on Jurong Island Prime Minister Lee Hsien Loong reassured his continued commitment to supporting ExxonMobil’s interests.

So I would like to thank ExxonMobil for being such an excellent partner. We wish you every success with the expanded Singapore Chemical Plant, and we congratulate you on your 120 years in Singapore. I think it is a special kind of a wedding anniversary. We look forward to many more years of success together. Thank you very much.
— Prime Minister Lee Hsien Loong, 8 January 2014

#ExxonKnew : Singapore as a carbon haven for international criminals

Since at least 1982, ExxonMobil has been conscious of the potential worst case risks of climate change as a consequence of uncontrolled carbon pollution and all the while has not abated in it’s effort to expand its global operations and carbon pollution.

In the internal research report from 1982, they accurately predicted with stunning accuracy that 38 years later in 2020 CO2 would reach 415 ppm and global temperatures would rise to approximately 1C, and that as a consequnce of this warming — there would be risks to agriculture, and potentially catastrophic events. Yes that’s right, ExxonMobil which is famous for a culture of “Safety First” and prides itself in risk management — decided unilaterally without engaging the public’s opinion on this matter that it was “worth the risk” to continue their with their business model including potentially unrecoverable flooding for entire metropolitan areas globally including South Florida, Bangladesh, Mumbai, Singapore, and the list goes on and on.

The final conclusion at the end of the 1982 report was that while it was likely that the earth would warm, and result in major climate changes, in the authors opinion by the year 2020 when climate effects would start to become undeniable, collectively humanity would likely find a cost-effective way to adapt and that the risks of switching to an alternative form of energy were higher than the risks of adapting to climate change.

Later in 1988, scientists held public congressional hearings in the United States sounding the alarm from the conclusions in the scientific research. Rather than acknowledge the scientific conclusions to the public, instead ExxonMobil together with other industry associates via the American Petroleum Institute (API) initiated a corporate campaign that had the effect of mislead the public on the scientific consensus, and create doubt on the basic scientific conclusions of the greenhouse gas effect and uncertainty of climate change model predictions. The outright denial of the basic science of global warming was most obvious in the 1996 speech by ExxonMobil CEO Lee Raymond at the API meeting at the Hyatt in Washington D.C. advocating against the Kyoto protocol.

A factual, common sense approach will serve us well as we address the issue that perhaps is the greatest long term threat to our industry — so called global climate change. Right now, a United Nations led effort is moving towards a decision in 1997 to cut the use of fossil fuels, based on the unproved theory that they affect the earth’s climate
Lee Raymond, ExxonMobil CEO, Nov 11, 1996
Annual Meeting American Petroleum Institute Washington D.C.

In another instance of an opinion article March 23, 2000 in an opinion article in the New York Times titled “Unsettled Science” — the company cast doubts and emphasized uncertainty, did not mention the more certain aspects of sea level rise mentioned in the 1982 report, and even suggested that the mixed effects of climate change could be overall beneficial.

So when we talk about Singapore’s greenhouse gas emissions, we should be clear that 30–45% of those emissions are coming from 3x companies that represent 3–6% of GDP of which at least one is facing multiple lawsuits for deliberately misleading the public on the potential catastrophic consequences of carbon pollution. The costs of mitigating the emissions are within the range of the surplus value in the economy 0.01–1.0% of GDP and while they may have a disproportionately higher impact in the Petrochemical industry -9%, the overall value-add per worker is still high >260,000 SGD/worker even after accounting for the cost of carbon mitigation.

Despite these facts, there are still gaps to be closed between the scientific, engineering, economic and ethical realities and Singapore’s Nationally Declared Contribution policies.

Singapore’s biggest “limitation” is the sustained political support for harboring the big 3 international criminals and subsidizing their priviledge ability to continue to profiting from cheap carbon pollution without paying the full cost of the international consequences.