How Dropping Oil Costs Are No Good for the Environment

How Dropping Oil Costs Are No Good for the Environment

Recycling has become a way of life for most Americans over the past 50 years. Collecting paper, glass, metal, and plastics in curbside bins is now part of the national fabric. In fact, the Environmental Protection Agency reports that we are recycling over 400 percent more than we used to. However, even as we make strides in diverting waste from landfills, one substance may end up thwarting much of our efforts—oil.

Like all goods traded on the open market, oil is subject to the basic laws of supply and demand. Because we have nearly doubled our oil production, thus reducing our foreign reliance on oil, and other markets in Europe and Asia are shrinking as a result of economic lag, the international oil supply has grown while the demand has decreased. These two opposing forces have brought oil prices down to their lowest levels since 2003.

While it’s true that lower oil costs can benefit us economically, allowing businesses to lower prices and making filling our gas tanks more pleasant, there’s also a downside to this situation: Lower oil prices can drive down profits in the recycling industry and threaten our commitment to waste management.

How Is Oil Related to Plastic?

plastic blocksSo, how does cheaper oil affect recycling? First, one must remember that plastic is a byproduct of oil and gas production. When the cost of oil drops, it makes the process of cleaning and sorting existing plastic seem unattractive because simply using cheap crude oil to generate new plastic is simpler and more affordable. When both natural gas and crude oil are inexpensive, the price of raw materials also falls. Why recycle if you can just make new plastic for less?

For those who appreciate the value of waste management, the answer to this question is simple—we must do what’s best for the environment. However, when profit margins are thrown into the equation, the answer becomes a little murkier.

What Else Do Lower Prices Affect?

Plastics recycling is not the only area that has felt the pressure of the falling cost of raw materials. In fact, the prices of aluminum, copper, iron, and paper have all dropped in recent years. Without the financial incentive to keep these types of recycling going, simply discarding these materials becomes more appealing to more and more people.

Further, some municipalities used to make money from their recycling programs, as processing companies would offer them a share of the profit the materials garnered. However, with profits falling so low, recycling companies are offering municipalities less and less, and many municipalities now have to pay recyclers to take the materials off of their hands.

Additionally, the depressed global demand for metal and paper has led to a shrinking market for U.S. recyclables. Weaker demand for oil also results in less exploration and investment in energy infrastructure, which means there is less need for machinery and steel-related equipment. Thus, the need for scrap metal also drops.

What Can We Do to Protect Recycling?

No matter how low oil prices fall, we need to continue to recycle. Obviously, it’s impossible for people to control the global oil market, so what can we do protect the process of recycling in the face of this changing market?

One thing we can do is work to keep the cost of recycling down by reducing the level of contamination in facilities and making sure consumers have the resources they need to make the right decisions. Therefore, it is more important than ever that we clean, rinse, and sort our recyclables when necessary. Anything that we can do to ease the strain and cost on the facilities themselves will be helpful in the long run.

Oil prices have always fluctuated, but the recent decline in price may be a sign that recycling programs need to change with the times. While it is increasingly important for us to preserve the act of recycling, lower greenhouse gases, and reduce the human footprint, we may need to reevaluate how we do it, and add some flexibility to the process. True sustainability demands our ability to look at situations clearly and make decisive action based on the facts. And that is what we must do.

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