CAMBRIDGE, Mass.--Everyone from politicians, investors, and consumers tout the potential of solar and wind technologies.
But even BP, a company that changed its tagline to "Beyond Petroleum," sees renewable energy as a very small piece of the global energy picture--a situation that's not likely to change in the coming decades, according to BP's chief scientist, Steven Koonin.
Koonin spoke here on Monday to Massachusetts Institute of Technologies' energy student fellows, part of a campuswide initiative to promote technology innovation in energy.
BP is perhaps the most high-profile oil and gas company to take alternative energy seriously.
But Koonin said that changing from BP's core oil and gas exploration business is a slow process, given that demand for liquid fuels continues to go up.
"We're trying (but) it's not easy to change things...You can't cut off the present," he said. "Deployment of energy innovations (in the oil and gas industry overall) is very hard because of entrenched interests."
He said that climate regulations that put a price on emitting carbon dioxide would incent energy companies to invest in low-carbon energy sources.
"The only way you're going to get a shift off of this is through a price on carbon," Koonin said. A carbon tax or cap-and-trade system would act the same way that a rise in gasoline prices has prompted many people to conserve, he said.
"The question is whether it will be high enough...It needs to be high enough to hurt to get people to do something different," Koonin said.
He noted that Europe already has climate regulations in place, and the U.S. is likely to adopt its own. At the same time, he said "it was hard to imagine" the fast-growing economies of China and India having costly limits on carbon emissions.
In his talk, Koonin listed a number of technologies that BP is exploring or funding research in, including biofuels, underground carbon storage, and various means of improved oil and gas exploration.
BP researchers are exploring under-ice drilling in the Arctic, building more robust drilling platforms, more environmentally benign methods to extract oil from tar sands, and hydrogen production.
"Technically, there are lots of opportunities in conventional fossil fuels," he said.
At the same time, BP is investing a billion dollars to establish a biofuels business and is pushing into wind power. It has also done a handful of tests in carbon capture and sequestration, where large amounts of carbon dioxide are stored underground.
Carbon storage is a technology that could be an important option for reducing greenhouse gas concentrations in the atmosphere, but it also faces a number of technical challenges, such as safe storage, Koonin said.
BP is also researching energy storage for renewable energy and advanced photovoltaics, although Koonin predicted it would be decades before they would make a major impact on worldwide energy use.
One of the most promising research paths is the intersection of biology and energy. BP, for example, is looking at how enzymes in cows and other ruminants can sequester carbon, he said.
"Beyond Petroleum was once an advertising slogan when I came in (in 2004). We're trying to do something about it now," he said.
Correction 10:20 a.m. PST: This blog misstated the day that BP CEO Tony Hayward spoke at the conference. It is Tuesday.
WASHINGTON--Amid rumors that BP will sell its alternative-energy business, company Chief Executive Tony Hayward on Tuesday said that the current scale of the clean-tech industry will not be enough to address the world's energy challenges.
Hayward spoke at the Washington International Renewable Energy Conference (WIREC) 2008 where he called for more aggressive government policies to address both climate change and energy security, which he said were interlinked.
BP Chief Executive Tony Hayward
(Credit: BP)Specifically, he said that nations need adopt a market-based mechanism, called a "cap and trade" system, to limit greenhouse gas emissions, including carbon dioxide. He also said that government "transitional" incentives are required to speed up development of clean technologies.
"Even though clean tech is growing fast, we all need to be honest," he said during a ministerial plenary session. "The scale that the industry is working at today is not going to have much impact."
He said carbon regulations should put a price on pollution. Hayward favors a cap and trade system, where polluters can trade carbon emission allowances, over a carbon tax because it is market-based and provides more "environmental certainty."
A global system, where carbon allowances are traded around the world, would be optimal. But individual countries or regions should implement their own systems and then seek to coordinate with other carbon-trading markets, a process that would mimic how financial markets evolved.
"Nobody can doubt the financial markets are now global but they grew up in individual countries," he said, noting that California has already begun the process of integrating with Europe's carbon market.
BP's primary business is oil and gas exploration but the company has been on the forefront of developing an alternative-energy business, even changing its name from British Petroleum to BP and adopting the tagline "Beyond Petroleum." It has spent $30 billion on exploration since 2001 and intends to invest another $30 billion in the next six years.
It now has a wind and solar business and is partnering with universities to develop "next-generation biofuels" that do not use food crops and are better fuels than ethanol, Hayward said.
He also said that BP is very optimistic it can make carbon capture and storage commercially viable because of its experience in oil and gas exploration. Carbon dioxide is injected underground to help oil and gas extraction.
Altogether BP spends $1 billion a year in alternative energy; the company is rumored to be looking at a sale of that business. Hayward spoke last week at an investor conference, where company watchers interpreted his comments as a signal that it may choose to focus on its core oil and gas business.
Here's a novel twist on curbing greenhouse gases. Some scientists and companies are examining ways of using captured carbon dioxide to extract fossil fuels.
It works like this. Carbon dioxide from smokestacks would be captured and compressed, and then shuttled into pipelines to oil fields. The gas would then be forced into oil wells to extract more fossil fuels.
The scenario solves two major problems in the energy field. First, what do you do with all of the carbon dioxide? The leading idea is to store it underground in depleted mines or saline aquifers. By being forced into oil fields, the gas will at least perform an economic function. Second, it would help ameliorate one of the age-old problems facing the oil industry: oil companies only get about 30 percent or so of the oil out of a field. (iRobot is contemplating creating a robot that can help free up captured oil.)
Granted, some of the benefits of sequestration are lost by using it to extract fossil fuels, but conventional cars are going to be with us for a while. Better to use carbon dioxide for this than leave it in the atmosphere and burn oil. Getting permits to lay pipelines will also take quite a bit of time.
Duke Energy is currently building a power plant in Indiana that will come with a carbon sequestration facility. One of the ideas the utility is contemplating is using the gas for enhanced oil recovery, said CEO Jim Rogers at the Clean Tech Investor Summit, held this week in Indian Wells, Calif. Duke is working with Princeton University on sequestration research.
Oil giant BP is also examining a way to pipe carbon dioxide from a hydrogen power plant to oil fields. Hydrogen and BP? It created a hydrogen business last year and has launched experiments.
Steven Koonin, BP's chief scientists (and a former California Institute of Technology professor), noted that underground storage--whether used in oil recovery or not--seems to be the most viable for sequestration. Transforming carbon dioxide into baking soda, which has been proposed by some companies, or other solids, he noted, requires quite a bit of additional raw material and energy.
"There is a good reason CO2 is the end product of combustion. It is a low energy molecule," he said. " Getting rid of CO2 by burying it underground may be the best option."
Still, even there, scientists still don't know if room exists underground to store it all.
Some start-ups are trying to convert the gas into a fuel.
Algae's not the only organism that can be used as a feedstock for biofuel.
BP will collaborate with Arizona State University to try to figure out a way of using cyanobacteria, a photosynthetic form of bacteria, as a feedstock for diesel or synthetic petroleum. Ideally, the bacteria could be cultivated in large, contained plots of land baked by the sun--Arizona has a lot of that. The bacteria also consume carbon dioxide to grow. Thus, carbon dioxide could be pumped in from a power plant into the contained bacteria farm. The company could thus make money from selling carbon credits and selling fuel feedstock.
Financial details of the deal, announced Friday, were not disclosed.
GreenFuel Technologies has a similar project in Arizona under way but with algae. A lot of companies, in fact, are trying to concoct feedstocks out of algae. The race now is to figure out who can come up with a microorganism and a process that results in the cheapest, highest-energy feedstock. One of the challenges of algae: separating the single-celled buggers from the water they grow in.
Microbes are hot these days. Some companies, such as Cambrios Technologies, are trying to figure out ways to use microorganisms in industrial processes while others are trying to get microorganisms to convert wood chips into ethanol. Others are working on bacteria-based fuel cells.
Earlier this year, BP signed deals with University of California at Berkeley and the University of Illinois.
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