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BP Strategy Recommendations

BP Strategy Recommendations. Short-run and long-run approaches to a carbon-constrained future. The Present Environment. High and increasing demand for oil. Dwindling rates of oil production. Instability in Middle East Iraq Demand for Energy Independency Threat of Terrorism

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BP Strategy Recommendations

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  1. BP Strategy Recommendations Short-run and long-run approaches to a carbon-constrained future.

  2. The Present Environment • High and increasing demand for oil. • Dwindling rates of oil production. • Instability in Middle East • Iraq • Demand for Energy Independency • Threat of Terrorism • Increasing profile of anthropocentric climate change.

  3. Recent New York Times Headlines: • “Global warming to bring heavier rains, snow,” October 14th, 2005. • “As Polar Ice Turns to Water, Dreams of Treasure Abound,” October 10th, 2005. • “In a Melting Trend, Less Arctic Ice to Go Around,” September 29th, 2005. • “Time to Connect the Dots,” September 28th, 2005.

  4. The Future Environment • Sharpened salience of global warming issue and demand for carbon abatement. • Emissions restrictions on CO2 and cap-and-trade mechanisms will create value for CO2.

  5. Strategy • Increase capacity for producing innovation in energy technologies. • Position to take full advantage of this capacity by actively entering the enhanced oil recovery (EOR) and carbon capture markets as interim strategies • Influencing the agenda by manipulating the pace, shape, and direction in which carbon abatement will be pursued in the U.S. • Focus is on taking profitable actions in the short-run which will facilitate a long-run agenda setting strategy.

  6. Increase Capacity • Heavy investment in R&D. • Technology • Infrastructure • Processes • Develop and invest in relationships with key decision makers and players.

  7. Strategy • Increase capacity for producing innovation in energy technologies. • Position to take full advantage of this capacity by actively entering the enhanced oil recovery (EOR) and carbon capture markets as interim strategies • Influencing the agenda by manipulating the pace, shape, and direction in which carbon abatement will be pursued in the U.S. • Focus is on taking profitable actions in the short-run which will facilitate a long-run agenda setting strategy.

  8. Positioning • Target and acquire mature oil fields in proximity to BP owned point sources of CO2 in Gulf Coast region of Texas. • Pursue federal and state funding for BP owned CO2 pipeline and monitoring infrastructure. • Capture CO2 from point sources and use for EOR.

  9. Strategy • Increase capacity for producing innovation in energy technologies. • Position to take full advantage of this capacity by actively entering the enhanced oil recovery (EOR) and carbon capture markets as interim strategies • Influencing the agenda by manipulating the pace, shape, and direction in which carbon abatement will be pursued in the U.S. • Focus is on taking profitable actions in the short-run which will facilitate a long-run agenda setting strategy.

  10. CO2 Cap-and-Trade What is it and how does it work?

  11. Influencing the Agenda • Target public  raise profile of global warming. • Provide info to relevant Congressional players. • Invest in relationships with key leaders. • Establish a PAC to support candidates • Build alliances with industry partners and NGOs.

  12. Strategy • Increase capacity for producing innovation in energy technologies. • Position to take full advantage of this capacity by actively entering the enhanced oil recovery (EOR) and carbon capture markets as interim strategies • Influencing the agenda by manipulating the pace, shape, and direction in which carbon abatement will be pursued in the U.S. • Focus is on taking profitable actions in the short-run which will facilitate a long-run agenda setting strategy.

  13. Players • Allies – Short run • Mid sized oil companies, chemical plants, refineries. • Industry groups like Gulf Coast Carbon Center • NGO allies • Texas public, governor, and many congressional leaders. • Allies – Long run • Utilities can be convinced to invest in IGCC, which reduces cost of carbon capture. • Public and increasing number of representatives. • Foreign industrialized countries

  14. Players • Opponents – Short run • Older coal-burning utities • Taxpayers in other states • “Pork Barrel” alarmists. • Opponents – Long run • Oil companies without CO2 transportation capacity

  15. A final word… • Short term and long term strategies to be kept separate: • Public outreach and work with NGOs  High profile • EOR and pipeline subsidies, as well as push for carbon cap-and-trade  Low profile

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