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Steven E. Koonin March 2007 Energy trends and technologies  for the coming decades
key drivers of the energy future Technology and policy Demand Growth <ul><li>GDP & pop. growth </li></ul><ul><li>urbanisat...
energy use grows with economic development <ul><ul><li>Source: UN and DOE EIA </li></ul></ul><ul><ul><li>Russia data 1992-...
demographic transformations source: United Nations 6.3 billion 8.9 billion Oceania Africa N-America S-America Europe Asia ...
energy demand – growth projections Source: IEA World Energy Outlook 2006 Notes:  1. OECD refers to North America, W. Europ...
annual primary energy demand 1971-2003 <ul><li>Source IEA, 2004  (Excludes biomass) </li></ul>
growing energy demand is projected Source: IEA WEO 2004 <ul><ul><li>Notes:  1. Power includes heat generated at power plan...
energy efficiency and conservation <ul><li>Demand depends upon more than GDP </li></ul><ul><ul><li>Multiple factors - geog...
key drivers of the energy future Demand Growth <ul><li>GDP & pop. growth </li></ul><ul><li>urbanisation </li></ul><ul><li>...
US energy supply since 1850 Source: EIA
global primary energy sources  Oil Natural gas Coal Hydro Nuclear Oil Coal Gas Hydro Nuclear
global energy supply & demand  (total = 186 Mboe/d) Source: World Energy Outlook 2004 Power Generation Transportation 37Mb...
global energy supply & demand  (total = 186 Mboe/d) Source: World Energy Outlook 2004 Power Generation Transportation 37Mb...
BAU projection of primary energy sources Source: IEA World Energy Outlook 2006 (Reference Case ) ’ 04 – ’30 Annual Growth ...
substantial global fossil resources R/P Ratio  41 yrs. R/P Ratio  67 yrs. R/P Ratio  164 yrs. Proven Proven Proven Yet to ...
oil supply and cost curve Availability of oil resources as a function of economic price Source: IEA (2005)
key drivers of the energy future Demand Growth <ul><li>GDP & pop. growth </li></ul><ul><li>urbanisation </li></ul><ul><li>...
significant hydrocarbon resource potential Source: BP Data Resource Potential (bnboe) Resource Potential (bnboe) Resource ...
dislocation of fossil fuel supply & demand Source: BP Statistical Review 2006
key drivers of the energy future Demand Growth <ul><li>GDP & pop. growth </li></ul><ul><li>urbanisation </li></ul><ul><li>...
climate change and CO 2  emissions <ul><li>CO 2  concentration is rising due to fossil fuel use </li></ul><ul><li>The glob...
crucial facts about CO 2  science <ul><li>The earth absorbs anthropogenic CO 2  at a limited rate </li></ul><ul><ul><li>Em...
some stabilization scenarios Emissions Concentration
social barriers to meaningful emissions reductions <ul><li>Climate threat is intangible and diffuse; can be obscured by na...
CO 2  emissions and GDP per capita  (1980-2004) US Australia Russia Brazil China India S. Korea Mexico Ireland Greece Fran...
implications of emissions heterogeneities <ul><li>21 st  Century emissions from the Developing World (DW) will be more imp...
CO 2  emissions and Energy per capita  (1980-2004) <ul><ul><li>Source: UN and DOE EIA </li></ul></ul><ul><ul><li>Russia da...
greenhouse gas emissions in 2000 by source  Source:  Stern Review, from data drawn from World Resources Institute Climate ...
historical and projected GHG emissions by sector Source: Stern Review from WRI (2006), IEA (in press),  IEA (2006), EPA (f...
key drivers of the energy future Demand Growth <ul><li>GDP & pop. growth </li></ul><ul><li>urbanisation </li></ul><ul><li>...
some energy technologies <ul><li>Primary Energy Sources: </li></ul><ul><li>Light Crude </li></ul><ul><li>Heavy Oil </li></...
evaluating energy technology options <ul><li>Current  technology status  and plausible  technical headroom </li></ul><ul><...
Concern relating to Threat of Climate Change Concern over Future Availability of Oil and Gas High High Low Low Adv.  Biofu...
the fungibility of carbon Primary Carbon Source Syngas Step Conversion Technology Syngas (CO + H 2 ) Lubes Naphtha Diesel ...
what carbon “beyond petroleum”? Fuel Fossil Agriculture Biomass Annual US Carbon (Mt C) ↑ 15% of Transportation Fuels 1000
what carbon “beyond petroleum”? Fuel Fossil Agriculture Biomass Annual  World  Carbon (Mt C) ↑ 15% of Transportation Fuels...
biofuels today <ul><li>2% of transportation pool  </li></ul><ul><li>(Mostly) Use with existing infrastructure & vehicles <...
key questions about biofuels <ul><li>Costs </li></ul><ul><ul><li>Biofuel production costs </li></ul></ul><ul><ul><li>Infra...
corn ethanol is sub-optimal <ul><li>Production does not scale to material impact </li></ul><ul><ul><li>20% of US corn prod...
optimizing biofuels requires fusing the petroleum and agricultural value chains <ul><li>Species </li></ul><ul><li>Yield  /...
BP Energy Biosciences Institute to pursue these opportunities <ul><li>Dedicated research organization  to explore applicat...
evaluating power options Concern over Future Availability of Oil and Gas High High Low Low Hydro Nuclear Solar Wind Biomas...
electricity generation shares by fuel - 2004  Source: IEA WEO 2006
levelised costs of electricity generation Low/Zero carbon energy source Renewable energy source Fossil energy source Sourc...
impact of CO 2  cost on levelised Cost of Electricity $0.35/gal or 5 p/l Solar PV ~$250
potential of demand side reduction Low Energy Buildings <ul><li>Buildings represent 40-50% of final energy consumption </l...
likely 30-year energy future <ul><li>Hydrocarbons will continue to dominate transportation   (high energy density) </li></...
necessary steps around the technology <ul><li>Technically informed, coherent, stable government policies </li></ul><ul><ul...
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  1. 1. Steven E. Koonin March 2007 Energy trends and technologies for the coming decades
  2. 2. key drivers of the energy future Technology and policy Demand Growth <ul><li>GDP & pop. growth </li></ul><ul><li>urbanisation </li></ul><ul><li>demand mgmt. </li></ul>Security of Supply Environmental Impacts Supply Challenges
  3. 3. energy use grows with economic development <ul><ul><li>Source: UN and DOE EIA </li></ul></ul><ul><ul><li>Russia data 1992-2004 only </li></ul></ul>US Australia Russia Brazil China India S. Korea Mexico Ireland Greece France UK Japan Malaysia energy demand and GDP per capita (1980-2004)
  4. 4. demographic transformations source: United Nations 6.3 billion 8.9 billion Oceania Africa N-America S-America Europe Asia Oceania Africa N-America S-America Europe Asia
  5. 5. energy demand – growth projections Source: IEA World Energy Outlook 2006 Notes: 1. OECD refers to North America, W. Europe, Japan, Korea, Australia and NZ 2. Transition Economies refers to FSU and Eastern European nations 3. Developing Countries is all other nations including China, India etc. Global Energy Demand Growth by Region (1971-2030) Energy Demand (Mtoe) Global energy demand is projected to increase by just over one-half between now and 2030 – an average annual rate of 1.6%. Over 70% of this increased demand comes from developing countries
  6. 6. annual primary energy demand 1971-2003 <ul><li>Source IEA, 2004 (Excludes biomass) </li></ul>
  7. 7. growing energy demand is projected Source: IEA WEO 2004 <ul><ul><li>Notes: 1. Power includes heat generated at power plants </li></ul></ul><ul><ul><li> 2. Other sectors includes residential, agricultural and service </li></ul></ul>Global Energy Demand Growth by Sector (1971-2030) Energy Demand (bnboe) Key: - industry - transport - power - other sectors
  8. 8. energy efficiency and conservation <ul><li>Demand depends upon more than GDP </li></ul><ul><ul><li>Multiple factors - geography, climate, demographics, urban planning, economic mix, technology choices, policy </li></ul></ul><ul><ul><li>For example, US per capita transport energy is > 3 times Japan </li></ul></ul><ul><li>Efficiency through technology is about paying today vs tomorrow </li></ul><ul><ul><li>Must be cost effective to be attractive </li></ul></ul><ul><ul><li>May not reduce demand through misuse or in supply-limited situations </li></ul></ul>US Autos (1990-2001) <ul><li>Net Miles per Gallon: +4.6% </li></ul><ul><ul><li>- engine efficiency : +23.0% </li></ul></ul><ul><ul><li>- weight/performance : -18.4% </li></ul></ul><ul><li>Annual Miles Driven: +16% </li></ul><ul><li>Annual Fuel Consumption: +11% </li></ul>
  9. 9. key drivers of the energy future Demand Growth <ul><li>GDP & pop. growth </li></ul><ul><li>urbanisation </li></ul><ul><li>demand mgmt. </li></ul>Security of Supply Environmental Constraints Supply Challenges <ul><li>significant resources </li></ul><ul><li>non-conventionals </li></ul>Technology and policy
  10. 10. US energy supply since 1850 Source: EIA
  11. 11. global primary energy sources Oil Natural gas Coal Hydro Nuclear Oil Coal Gas Hydro Nuclear
  12. 12. global energy supply & demand (total = 186 Mboe/d) Source: World Energy Outlook 2004 Power Generation Transportation 37Mboe/d 76Mboe/d Buildings 56Mboe/d Industry 45Mboe/d 14 Nuclear 14Mboe/d 5 Renewables 5Mboe/d 2 17 3 1 Biomass 23Mboe/d 33 8 2 Coal 43Mboe/d 11 10 16 1 Gas 38Mboe/d 6 35 12 10 Oil 63Mboe/d
  13. 13. global energy supply & demand (total = 186 Mboe/d) Source: World Energy Outlook 2004 Power Generation Transportation 37Mboe/d 76Mboe/d Buildings 56Mboe/d Industry 45Mboe/d 11 16 14 Nuclear 14Mboe/d 5 Renewables 5Mboe/d 2 17 3 1 Biomass 23Mboe/d 33 8 2 Coal 43Mboe/d 11 10 16 1 Gas 38Mboe/d 6 35 12 10 Oil 63Mboe/d
  14. 14. BAU projection of primary energy sources Source: IEA World Energy Outlook 2006 (Reference Case ) ’ 04 – ’30 Annual Growth Rate (%) Total 6.5 1.3 2.0 0.7 2.0 1.3 1.8 1.6 Note: ‘Other renewables’ include geothermal, solar, wind, tide and wave energy for electricity generation
  15. 15. substantial global fossil resources R/P Ratio 41 yrs. R/P Ratio 67 yrs. R/P Ratio 164 yrs. Proven Proven Proven Yet to Find Yet to Find Yet to Find Source: World Energy Assessment 2001, HIS, WoodMackenzie, BP Stat Review 2005, BP estimates Unconventional Unconventional Reserves & Resources (bnboe)
  16. 16. oil supply and cost curve Availability of oil resources as a function of economic price Source: IEA (2005)
  17. 17. key drivers of the energy future Demand Growth <ul><li>GDP & pop. growth </li></ul><ul><li>urbanisation </li></ul><ul><li>demand mgmt. </li></ul>Security of Supply <ul><li>dislocation of resources </li></ul><ul><li>import dependence </li></ul>Environmental Impacts Supply Challenges <ul><li>significant resources </li></ul><ul><li>non-conventionals </li></ul>Technology and policy
  18. 18. significant hydrocarbon resource potential Source: BP Data Resource Potential (bnboe) Resource Potential (bnboe) Resource Potential (bnboe) Oil, Gas and Coal Resources by Region (bnboe) South America North America Oil Gas Coal Oil Gas Coal Africa Oil Gas Coal Resource Potential (bnboe) FSU Oil Gas Coal Resource Potential (bnboe) Gas Europe Resource Potential (bnboe) Oil Gas Coal Middle East Oil Gas Coal Asia Pacific Oil Gas Coal Resource Potential (bnboe) Key: - unconventional oil - conventional oil - gas - coal
  19. 19. dislocation of fossil fuel supply & demand Source: BP Statistical Review 2006
  20. 20. key drivers of the energy future Demand Growth <ul><li>GDP & pop. growth </li></ul><ul><li>urbanisation </li></ul><ul><li>demand mgmt. </li></ul>Security of Supply <ul><li>dislocation of resources </li></ul><ul><li>import dependence </li></ul>Environmental Impacts <ul><li>local pollution </li></ul><ul><li>climate change </li></ul>Supply Challenges <ul><li>significant resources </li></ul><ul><li>non-conventionals </li></ul>Technology and policy
  21. 21. climate change and CO 2 emissions <ul><li>CO 2 concentration is rising due to fossil fuel use </li></ul><ul><li>The global temperature is increasing </li></ul><ul><ul><li>other indicators of climate change </li></ul></ul><ul><li>There is a plausible causal connection </li></ul><ul><ul><li>but ~1% effect in a complex, noisy system </li></ul></ul><ul><ul><li>scientific case is complicated by natural variability, ill-understood forcings </li></ul></ul><ul><li>Impacts of higher CO 2 are uncertain </li></ul><ul><ul><li>~ 2X pre-industrial is a widely discussed stabilization target (550 ppm) </li></ul></ul><ul><ul><li>Reached by 2050 under BAU </li></ul></ul><ul><li>Precautionary action is warranted </li></ul><ul><ul><li>What could the world do? </li></ul></ul><ul><ul><li>Will we do it? </li></ul></ul>
  22. 22. crucial facts about CO 2 science <ul><li>The earth absorbs anthropogenic CO 2 at a limited rate </li></ul><ul><ul><li>Emissions would have to drop to about half of their current value by the end of this century to stabilize atmospheric concentration at 550 ppm </li></ul></ul><ul><ul><li>This in the face of a doubling of energy demand in the next 50 years (1.5% per year emissions growth) </li></ul></ul><ul><li>The lifetime of CO 2 in the atmosphere is ~ 1000 years </li></ul><ul><ul><li>The atmosphere will accumulate emissions during the 21 st Century </li></ul></ul><ul><ul><li>Near-term emissions growth can be offset by greater long-term reductions </li></ul></ul><ul><ul><li>Modest emissions reductions only delay the growth of concentration (20% emissions reduction buys 15 years) </li></ul></ul>
  23. 23. some stabilization scenarios Emissions Concentration
  24. 24. social barriers to meaningful emissions reductions <ul><li>Climate threat is intangible and diffuse; can be obscured by natural variability </li></ul><ul><ul><li>contrast ozone, air pollution </li></ul></ul><ul><li>Energy is at the heart of economic activity </li></ul><ul><li>CO 2 timescales are poorly matched to the political process </li></ul><ul><ul><li>Buildup and lifetime are centennial scale </li></ul></ul><ul><ul><li>Energy infrastructure takes decades to replace </li></ul></ul><ul><ul><ul><li>Power plants being planned now will be emitting in 2050 </li></ul></ul></ul><ul><ul><ul><li>Autos last 20 years; buildings 100 years </li></ul></ul></ul><ul><ul><li>Political cycle is ~6 years; news cycle ~1 day </li></ul></ul><ul><li>There will be inevitable distractions </li></ul><ul><ul><li>a few years of cooling </li></ul></ul><ul><ul><li>economic downturns </li></ul></ul><ul><ul><li>unforeseen expenses (e.g., Iraq, tsunamis, …) </li></ul></ul><ul><li>Emissions, economics, and the priority of the threat vary greatly around the world </li></ul>
  25. 25. CO 2 emissions and GDP per capita (1980-2004) US Australia Russia Brazil China India S. Korea Mexico Ireland Greece France UK Japan Malaysia <ul><ul><li>Source: UN and DOE EIA </li></ul></ul><ul><ul><li>Russia data 1992-2004 only </li></ul></ul>
  26. 26. implications of emissions heterogeneities <ul><li>21 st Century emissions from the Developing World (DW) will be more important than those from the Industrialized World (IW) </li></ul><ul><ul><li>DW emissions growing at 2.8% vs IW growing at 1.2% </li></ul></ul><ul><ul><li>DW will surpass IW during 2015 - 2025 </li></ul></ul><ul><li>Sobering facts </li></ul><ul><ul><li>When DW ~ IW, each 10% reduction in IW emissions is compensated by < 4 years of DW growth </li></ul></ul><ul><ul><li>If China’s (or India’s) per capita emissions were those of Japan, global emissions would be 40% higher </li></ul></ul><ul><li>Reducing emissions is an enormous, complex challenge; technology development will play a central role </li></ul>t E DW IW
  27. 27. CO 2 emissions and Energy per capita (1980-2004) <ul><ul><li>Source: UN and DOE EIA </li></ul></ul><ul><ul><li>Russia data 1992-2004 only </li></ul></ul>Current global average
  28. 28. greenhouse gas emissions in 2000 by source Source: Stern Review, from data drawn from World Resources Institute Climate Analysis Indicators Tool (CAIT) on-line database version 3.0
  29. 29. historical and projected GHG emissions by sector Source: Stern Review from WRI (2006), IEA (in press), IEA (2006), EPA (forthcoming), Houghton (2005).
  30. 30. key drivers of the energy future Demand Growth <ul><li>GDP & pop. growth </li></ul><ul><li>urbanisation </li></ul><ul><li>demand mgmt. </li></ul>Security of Supply <ul><li>import dependence </li></ul><ul><li>competition </li></ul>Environmental Impacts <ul><li>local pollution </li></ul><ul><li>climate change </li></ul>Supply Challenges <ul><li>significant resources </li></ul><ul><li>non-conventionals </li></ul>Technology and policy
  31. 31. some energy technologies <ul><li>Primary Energy Sources: </li></ul><ul><li>Light Crude </li></ul><ul><li>Heavy Oil </li></ul><ul><li>Tar Sands </li></ul><ul><li>Wet gas </li></ul><ul><li>CBM </li></ul><ul><li>Tight gas </li></ul><ul><li>Nuclear </li></ul><ul><li>Coal </li></ul><ul><li>Solar </li></ul><ul><li>Wind </li></ul><ul><li>Biomass </li></ul><ul><li>Hydro </li></ul><ul><li>Geothermal </li></ul><ul><li>Extraction & Conversion Technologies: </li></ul><ul><li>Exploration </li></ul><ul><li>Deeper water </li></ul><ul><li>Arctic </li></ul><ul><li>LNG </li></ul><ul><li>Refining </li></ul><ul><li>Differentiated fuels </li></ul><ul><li>Advantaged chemicals </li></ul><ul><li>Gasification </li></ul><ul><li>Syngas conversion </li></ul><ul><li>Power generation </li></ul><ul><li>Photovoltaics </li></ul><ul><li>Bio-enzyimatics </li></ul><ul><li>H 2 production & distribution </li></ul><ul><li>CO 2 capture & storage </li></ul><ul><li>End Use Technologies: </li></ul><ul><li>ICEs </li></ul><ul><li>Adv. Batteries </li></ul><ul><li>Hybridisation </li></ul><ul><li>Fuel cells </li></ul><ul><li>Hydrogen storage </li></ul><ul><li>Gas turbines </li></ul><ul><li>Building efficiency </li></ul><ul><li>Urban infrastructure </li></ul><ul><li>Systems design </li></ul><ul><li>Other efficiency technologies </li></ul><ul><li>Appliances </li></ul><ul><li>Retail technologies </li></ul>There are no “silver bullets” But some have a larger calibre than others !
  32. 32. evaluating energy technology options <ul><li>Current technology status and plausible technical headroom </li></ul><ul><li>Budgets for the three E’s: </li></ul><ul><ul><li>Economic (cost relative to other options) </li></ul></ul><ul><ul><li>Energy (output how many times greater than input) </li></ul></ul><ul><ul><li>Emissions (pollution and CO2; operations and capital) </li></ul></ul><ul><li>Materiality (at least 1TW = 5% of 2050 BAU energy demand) </li></ul><ul><li>Other costs - reliability, intermittency etc. </li></ul><ul><li>Social and political acceptability </li></ul><ul><li>we also must know what problem we are trying to solve! </li></ul>
  33. 33. Concern relating to Threat of Climate Change Concern over Future Availability of Oil and Gas High High Low Low Adv. Biofuels Carbon Free H 2 for Transport Capture & Storage Capture & Storage Hybrids C&S Vehicle Efficiency (e.g. light weighting) Dieselisation Conv. Biofuels two key energy considerations – security & climate CTL GTL Heavy Oil Enhanced Recovery Ultra Deep Water Arctic CNG - supply side options - demand side options Key:
  34. 34. the fungibility of carbon Primary Carbon Source Syngas Step Conversion Technology Syngas (CO + H 2 ) Lubes Naphtha Diesel Syngas to Liquids (GTL) Process Others (e.g. mixed alclohols, DME) Syngas to Chemicals Technologies Methanol Coal Natural Gas Biomass Hydrogen Extra Heavy Oil Combined Cycle Power Generation Syngas to Power
  35. 35. what carbon “beyond petroleum”? Fuel Fossil Agriculture Biomass Annual US Carbon (Mt C) ↑ 15% of Transportation Fuels 1000
  36. 36. what carbon “beyond petroleum”? Fuel Fossil Agriculture Biomass Annual World Carbon (Mt C) ↑ 15% of Transportation Fuels ↑ 5300 Big!
  37. 37. biofuels today <ul><li>2% of transportation pool </li></ul><ul><li>(Mostly) Use with existing infrastructure & vehicles </li></ul><ul><li>Growing support worldwide </li></ul><ul><li>Conversion of food crops into ethanol or biodiesel </li></ul><ul><ul><li>US Corn ethanol economic for oil > $45 /bbl </li></ul></ul><ul><ul><li>Brazilian sugarcane economic for oil > $22/bbl </li></ul></ul>Flex Fuel Offers in Brazil Food Crops for Energy
  38. 38. key questions about biofuels <ul><li>Costs </li></ul><ul><ul><li>Biofuel production costs </li></ul></ul><ul><ul><li>Infrastructure & vehicle costs </li></ul></ul><ul><li>Materiality </li></ul><ul><ul><li>Is there sufficient land after food needs? </li></ul></ul><ul><ul><li>Are plant yields sufficiently high? </li></ul></ul><ul><li>Environmental sustainability </li></ul><ul><ul><li>Field-to-tank CO 2 emissions relative to business as usual? </li></ul></ul><ul><ul><li>Agricultural practice – water, nitrogen, ecosystem diversity and robustness, sustainability, food impact </li></ul></ul><ul><li>Energy balance </li></ul><ul><ul><li>More energy out than in? </li></ul></ul><ul><ul><li>Does it matter? </li></ul></ul>
  39. 39. corn ethanol is sub-optimal <ul><li>Production does not scale to material impact </li></ul><ul><ul><li>20% of US corn production in 2006 (vs. 6% in 2000) was used to make ethanol displacing ~2.5% of petrol use </li></ul></ul><ul><ul><li>17% of US corn production was exported in 2006 </li></ul></ul><ul><li>The energy and environmental benefits are limited </li></ul><ul><ul><li>To make 1 MJ of corn ethanol requires 0.9 MJ of other energy (0.4 MJ coal, 0.3 MJ gas, 0.04 MJ of nuclear/hydro, 0.05 MJ crude ) </li></ul></ul><ul><ul><li>Net CO 2 emission of corn ethanol ~18% less than petrol </li></ul></ul><ul><li>Ethanol is not an optimal fuel molecule </li></ul><ul><ul><li>Energy density, water, corrosive,… </li></ul></ul><ul><li>There is tremendous scope to improve (energy, economics, emissions) </li></ul>
  40. 40. optimizing biofuels requires fusing the petroleum and agricultural value chains <ul><li>Species </li></ul><ul><li>Yield / Morphology / Development </li></ul><ul><li>Chemistry </li></ul><ul><li>Unnatural products </li></ul><ul><li>Stress tolerance </li></ul><ul><li>/ Bio-overhead </li></ul><ul><li>Safety </li></ul><ul><li>Tillage </li></ul><ul><li>Planting </li></ul><ul><li>Fertilizer </li></ul><ul><li>Water </li></ul><ul><li>Pest control </li></ul><ul><li>Crop rotation </li></ul><ul><li>Sustainability </li></ul><ul><li>Optimal catchment </li></ul><ul><li>In-field processing (e.g., pelletizing) </li></ul><ul><li>Transport energetics </li></ul><ul><li>Storage </li></ul><ul><li>Waste utilization </li></ul><ul><li>Cellulose (bugs/ enzymes/ chems) </li></ul><ul><li>Microbial engineering </li></ul><ul><li>Plant integration / optimization </li></ul><ul><li>Co-products </li></ul><ul><li>Role of gasification </li></ul><ul><li>Blends </li></ul><ul><li>Additives </li></ul><ul><li>Distribution </li></ul><ul><li>Engine mods </li></ul>Exploration Production Transport Refining Blending Petroleum Value Chain: Germplasm Cultivation Harvest/ Transport Processing A real fuel Biofuels Value Chain: Germplasm Cultivation Harvest Process Distribution Agricultural Value Chain:
  41. 41. BP Energy Biosciences Institute to pursue these opportunities <ul><li>Dedicated research organization to explore application of biology and biotechnology to energy issues </li></ul><ul><li>Sited at University of California – Berkeley and it’s partners, University of Illinois Urbana-Champagne and Lawrence Berkeley National Laboratory </li></ul><ul><li>Open “basic” and proprietary “applied” research </li></ul><ul><li>Initial focus on the entire biofuels production chain </li></ul><ul><ul><li>Smaller programmes in Oil Recovery, hydrocarbon conversion, carbon sequestration </li></ul></ul><ul><li>Involvement of BP, academia, biotechnology firms, government </li></ul><ul><li>$500M, 10-year commitment; operations commencing June `07 </li></ul>
  42. 42. evaluating power options Concern over Future Availability of Oil and Gas High High Low Low Hydro Nuclear Solar Wind Biomass power sector Coal Gas CCGT Geothermal Hydrogen Power Unconventional Gas Concern relating to Threat of Climate Change - power generation options - supply option Key:
  43. 43. electricity generation shares by fuel - 2004 Source: IEA WEO 2006
  44. 44. levelised costs of electricity generation Low/Zero carbon energy source Renewable energy source Fossil energy source Source: BP Estimates, Navigant Consulting Cost of Electricity Generation 9% IRR ($/MWh)
  45. 45. impact of CO 2 cost on levelised Cost of Electricity $0.35/gal or 5 p/l Solar PV ~$250
  46. 46. potential of demand side reduction Low Energy Buildings <ul><li>Buildings represent 40-50% of final energy consumption </li></ul><ul><li>Technology exists to reduce energy demand by at least 50% </li></ul><ul><li>Challenges are consumer behaviour, policy and business models </li></ul>Urban Energy Systems <ul><li>75% of the world’s population will be urbanised by 2030 </li></ul><ul><li>Are there opportunities to integrate and optimise energy use on a city wide basis? </li></ul>
  47. 47. likely 30-year energy future <ul><li>Hydrocarbons will continue to dominate transportation (high energy density) </li></ul><ul><ul><li>Conventional crude / heavy oils / biofuels / CTL and GTL ensure continuity of supply at reasonable cost </li></ul></ul><ul><ul><li>Vehicle efficiency can be at least doubled (hybrids, plug-in hybrids, HCCI, diesel) </li></ul></ul><ul><ul><li>local pollution controllable at cost; CO 2 emissions now ~20% of the total </li></ul></ul><ul><ul><li>Hydrogen in vehicles is a long way off, if it’s there at all </li></ul></ul><ul><ul><ul><li>No production method simultaneously satisfies economy, security, emissions </li></ul></ul></ul><ul><ul><ul><li>Technical and economic barriers to distribution / on-board storage / fuel cells </li></ul></ul></ul><ul><ul><ul><li>Benefits are largely realizable by plausible evolution of existing technologies </li></ul></ul></ul><ul><li>Coal (security) and gas (cleanliness) will continue to dominate heat and power </li></ul><ul><ul><li>Capture and storage (H 2 power) practiced if CO 2 concern is to be addressed </li></ul></ul><ul><ul><li>Nuclear (energy security, CO 2 ) will be a fixed, if not growing, fraction of the mix </li></ul></ul><ul><ul><li>Renewables will find some application but will remain a small fraction of the total </li></ul></ul><ul><ul><ul><li>Advanced solar a wildcard </li></ul></ul></ul><ul><li>Demand reduction will happen where economically effective or via policy </li></ul><ul><li>CO 2 emissions (and concentrations) continue to rise absent dramatic global action </li></ul>
  48. 48. necessary steps around the technology <ul><li>Technically informed, coherent, stable government policies </li></ul><ul><ul><li>Educated decision-makers and public </li></ul></ul><ul><ul><li>For short/mid-term technologies </li></ul></ul><ul><ul><ul><li>Avoid picking winners/losers (emissions trading) </li></ul></ul></ul><ul><ul><ul><li>Level playing field for all applicable technologies </li></ul></ul></ul><ul><ul><li>For longer-term technologies </li></ul></ul><ul><ul><ul><li>Support for pre-competitive research </li></ul></ul></ul><ul><ul><ul><ul><li>Hydrates, fusion, advanced [fission, PV, biofuels, …] </li></ul></ul></ul></ul><ul><li>Business needs reasonable expectation of “price of carbon” </li></ul><ul><li>Universities/labs must recognize and act on importance of energy research </li></ul><ul><ul><li>Technology and policy </li></ul></ul>
  49. 49. Questions/Comments/Discussion

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