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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

BP Strategy Recommendations

Short-run and long-run approaches to a carbon-constrained future.

the present environment
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.
recent new york times headlines
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.
the future environment
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.
strategy
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.
increase capacity
Increase Capacity
  • Heavy investment in R&D.
      • Technology
      • Infrastructure
      • Processes
  • Develop and invest in relationships with key decision makers and players.
strategy8
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.
positioning
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.
strategy11
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.
co 2 cap and trade

CO2 Cap-and-Trade

What is it and how does it work?

influencing the agenda
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.
strategy14
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.
players
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
players16
Players
  • Opponents – Short run
      • Older coal-burning utities
      • Taxpayers in other states
      • “Pork Barrel” alarmists.
  • Opponents – Long run
      • Oil companies without CO2 transportation capacity
a final word
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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