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BP

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BP

  1. 1. BP Strategy Recommendations Short-run and long-run approaches to a carbon-constrained future.
  2. 2. The Present Environment <ul><li>High and increasing demand for oil. </li></ul><ul><li>Dwindling rates of oil production. </li></ul><ul><li>Instability in Middle East </li></ul><ul><li>Iraq </li></ul><ul><ul><ul><li>Demand for Energy Independency </li></ul></ul></ul><ul><ul><ul><li>Threat of Terrorism </li></ul></ul></ul><ul><li>Increasing profile of anthropocentric climate change. </li></ul>
  3. 3. Recent New York Times Headlines: <ul><li>“ Global warming to bring heavier rains, snow,” October 14 th , 2005. </li></ul><ul><li>“ As Polar Ice Turns to Water, Dreams of Treasure Abound,” October 10 th , 2005. </li></ul><ul><li>“ In a Melting Trend, Less Arctic Ice to Go Around,” September 29 th , 2005. </li></ul><ul><li>“ Time to Connect the Dots,” September 28 th , 2005. </li></ul>
  4. 5. The Future Environment <ul><li>Sharpened salience of global warming issue and demand for carbon abatement. </li></ul><ul><li>Emissions restrictions on CO 2 and cap-and-trade mechanisms will create value for CO 2. </li></ul>
  5. 6. Strategy <ul><li>Increase capacity for producing innovation in energy technologies. </li></ul><ul><li>Position to take full advantage of this capacity by actively entering the enhanced oil recovery (EOR) and carbon capture markets as interim strategies </li></ul><ul><li>Influencing the agenda by manipulating the pace, shape, and direction in which carbon abatement will be pursued in the U.S. </li></ul><ul><li>Focus is on taking profitable actions in the short-run which will facilitate a long-run agenda setting strategy. </li></ul>
  6. 7. Increase Capacity <ul><li>Heavy investment in R&D. </li></ul><ul><ul><ul><li>Technology </li></ul></ul></ul><ul><ul><ul><li>Infrastructure </li></ul></ul></ul><ul><ul><ul><li>Processes </li></ul></ul></ul><ul><li>Develop and invest in relationships with key decision makers and players. </li></ul>
  7. 8. Strategy <ul><li>Increase capacity for producing innovation in energy technologies. </li></ul><ul><li>Position to take full advantage of this capacity by actively entering the enhanced oil recovery (EOR) and carbon capture markets as interim strategies </li></ul><ul><li>Influencing the agenda by manipulating the pace, shape, and direction in which carbon abatement will be pursued in the U.S. </li></ul><ul><li>Focus is on taking profitable actions in the short-run which will facilitate a long-run agenda setting strategy. </li></ul>
  8. 9. Positioning <ul><li>Target and acquire mature oil fields in proximity to BP owned point sources of CO 2 in Gulf Coast region of Texas. </li></ul><ul><li>Pursue federal and state funding for BP owned CO 2 pipeline and monitoring infrastructure. </li></ul><ul><li>Capture CO 2 from point sources and use for EOR. </li></ul>
  9. 11. Strategy <ul><li>Increase capacity for producing innovation in energy technologies. </li></ul><ul><li>Position to take full advantage of this capacity by actively entering the enhanced oil recovery (EOR) and carbon capture markets as interim strategies </li></ul><ul><li>Influencing the agenda by manipulating the pace, shape, and direction in which carbon abatement will be pursued in the U.S. </li></ul><ul><li>Focus is on taking profitable actions in the short-run which will facilitate a long-run agenda setting strategy. </li></ul>
  10. 12. CO 2 Cap-and-Trade What is it and how does it work?
  11. 13. Influencing the Agenda <ul><li>Target public  raise profile of global warming. </li></ul><ul><li>Provide info to relevant Congressional players. </li></ul><ul><li>Invest in relationships with key leaders. </li></ul><ul><li>Establish a PAC to support candidates </li></ul><ul><li>Build alliances with industry partners and NGOs. </li></ul>
  12. 14. Strategy <ul><li>Increase capacity for producing innovation in energy technologies. </li></ul><ul><li>Position to take full advantage of this capacity by actively entering the enhanced oil recovery (EOR) and carbon capture markets as interim strategies </li></ul><ul><li>Influencing the agenda by manipulating the pace, shape, and direction in which carbon abatement will be pursued in the U.S. </li></ul><ul><li>Focus is on taking profitable actions in the short-run which will facilitate a long-run agenda setting strategy. </li></ul>
  13. 15. Players <ul><li>Allies – Short run </li></ul><ul><ul><ul><li>Mid sized oil companies, chemical plants, refineries. </li></ul></ul></ul><ul><ul><ul><li>Industry groups like Gulf Coast Carbon Center </li></ul></ul></ul><ul><ul><ul><li>NGO allies </li></ul></ul></ul><ul><ul><ul><li>Texas public, governor, and many congressional leaders. </li></ul></ul></ul><ul><li>Allies – Long run </li></ul><ul><ul><ul><li>Utilities can be convinced to invest in IGCC, which reduces cost of carbon capture. </li></ul></ul></ul><ul><ul><ul><li>Public and increasing number of representatives. </li></ul></ul></ul><ul><ul><ul><li>Foreign industrialized countries </li></ul></ul></ul>
  14. 16. Players <ul><li>Opponents – Short run </li></ul><ul><ul><ul><li>Older coal-burning utities </li></ul></ul></ul><ul><ul><ul><li>Taxpayers in other states </li></ul></ul></ul><ul><ul><ul><li>“ Pork Barrel” alarmists. </li></ul></ul></ul><ul><li>Opponents – Long run </li></ul><ul><ul><ul><li>Oil companies without CO2 transportation capacity </li></ul></ul></ul>
  15. 17. A final word… <ul><li>Short term and long term strategies to be kept separate: </li></ul><ul><li>Public outreach and work with NGOs  High profile </li></ul><ul><li>EOR and pipeline subsidies, as well as push for carbon cap-and-trade  Low profile </li></ul>

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