A decade of sustainability

The oil giant has been contributing to the carbon debate for almost 10 years and is working to limit emissions, says BP’s Ellis Armstrong.


The demand for energy has risen by 15 per cent during the 21st century and some forecasts expect this to have grown by 60 per cent by 2030. Demand is primarily being driven by population growth and economic development. The world’s population has doubled during my lifetime, from three billion in 1961 to more than six billion today. That is as much as it has grown since time began and it is expected to hit nine billion by 2050.

Today, the bulk of energy demand is being supplied by hydrocarbons. But what of the future? Fossil-fuel derived energy has environmental implications and people are increasingly looking for more responsible suppliers. There is growing international debate over targets for the global rise in temperature, for CO2 levels in the atmosphere and for annual emissions.

BP has been contributing to this debate for nearly a decade. John Browne, our chief executive, gave his first big speech on global climate change at Stanford when I was a student there in 1997. At the time, this was an extraordinary act for the leader of an international oil company.

Technology will play in important role as we seek to provide alternative energy sources that are clean, local and sustainable. We support the emerging consensus that measures should be taken to stabilise CO2 levels in the atmosphere at about 500-550 parts per million this century. It is calculated this will require having emissions in 50 years time at roughly the same level they are now — about 25 billion tonnes of CO2 equivalent — despite a projected doubling in energy consumption.



Lower-carbon mix

We are not talking about eliminating carbon emissions entirely. Science implies there is a tolerable level of emissions. The challenge is to limit them and change the mix towards lower-carbon sources. Forty per cent of the power plants that will supply energy in 2020 are not yet built, so the possibility of change does exist. Technology will be the key to this low-carbon future.

BP is deeply involved in most parts of this landscape. We are already a major player in biofuels — with about 10 per cent of the global market. We are investing $500m (£264m) over 10 years in a biofuels institute with a major research university yet to be chosen, in the US or UK.

Biofuels are important for three reasons. The first is maturity. So far little technology has been applied to biofuels. If a step change could be made in crop yields and the conversion process, they could be economically viable in temperate climates. The second is scale; breakthroughs here would enhance the energy independence of the US. The US has vast land space which could produce crops to fuel energy needs. The third is its energy density. While other alternative energies provide power, they do not fuel our chosen mode of transport, the car. Solar, wind and nuclear cannot power a car — biofuels can.

Last year we launched our Alternative Energy business with the aim of becoming the world’s leading low-carbon power business. We will spend $8bn over the next 10 years and expect to cut projected Greenhouse Gas emissions by 24 million tonnes a year by 2015. We continue to ramp up our solar production where we are already one of the world’s largest suppliers. We have moved into wind at scale, and have completed two large deals in 2006 that, along with our own significant land bank, have provided us with a large north American development portfolio in excess of 8GW.

We are also involved in several leading-edge project technologies such as the CO2 capture and storage pilot, which we are undertaking with Sonatrach and Statoil at In Salah in the Algerian desert. This ties low-carbon energy to our core skill of understanding and managing hydrocarbon reservoirs. About 10 per cent of the gas in the reservoir is made up of CO2 that we are separating, compressing and re-injecting into wells 1,829m deep. More than 17 million tonnes of CO2 will be injected into the reservoir over the next 20 years, about one quarter of the CO2 from vehicles in Texas in one year.



Hydrogen power

We also plan to build the first hydrogen power stations, one of which is in California. These use gas or coke as a feedstock and convert it into hydrogen, from which clean power is generated. We then take the CO2 and store it underground, where it has no impact on global warming. We plan one such facility at our Carson refinery, spending about $1bn on 500MW of power for the LA area, and we are collaborating with GE with a view to building more, maybe up to 15, over the next decade. These plants also help produce hydrocarbons because the CO2 can be used to flush out trapped remaining oil from mature oil fields.

Many roads lead to low-carbon energy. The environmental imperative and economics — as sustained high prices encourage diversification — both take us there. Energy security does because many of the most secure options are also low-carbon ones — wind, solar, biofuels, and more efficient coal-fired power.



Edited extracts of a speech given at the Harvard University Energy Club by Ellis Armstrong, group vice-president for exploration and production at BP