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Let’s talk briefly about polyethylene – specifically, high density polyethylene. It’s a dense plastic that is extremely strong and resistant to a bunch of things. Things like Tupperware are made from it. It in turn is made from petroleum – oil – in a lossy process that consumes 1.75 units of petroleum to produce 1.0 units of polyethylene.

Why is this important? Well, it seems that milk crates – those super-high density crates that virtually every college student has at some point – are vanishing at a rate far beyond the usual theft rates. The dairy industry investigated and found that the price for recycled polyethylene jumped from about 7 cents per pound to 22 cents per pound over the last two years. Recyclers were accepted stolen milk crates in bulk, chopping them up, and shipping them to China to be used to make consumer goods.

Think about that for a second. China, already one of the world’s largest consumers of petroleum, has companies paying 22 cents per pound for used polyethylene instead of refining petroleum to create new polyethylene. That means that in their manufacturing processes, it’s cheaper to recycle (or use recycled materials) than it is to manufacture new – which is not usually the case.

What does this mean? To me, it hints that the cost of petroleum and relatively limited supply is causing one of the world’s largest consumer goods manufacturing economies to choose recycled materials over new, and that means that the supply of oil is probably tighter than we think.

Peak oil, anyone? A harbinger of things to come?

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