While General Electric announced structural changes to compensate for increased business in its energy-efficient lighting sector, BP is planning to restructure itself to emphasize…more petroleum.

Once self-dubbed "Beyond Petroleum" because of its increased focus on clean energy — and even considered to be one of the friendlier oil companies by clean energy supporters — BP is now folding its gas power and renewables division into its two exploration and refining segments. But despite the de-emphasis on renewables, it will continue to use the "Beyond Petroleum" moniker (still good for business I suppose) and build wind turbines and solar cells.

Why the change? Simple business: The company’s new CEO, Tony Hayward, is frustrated with its performance compared to rivals like ExxonMobil. While Exxon and BP produce nearly the same about of oil each day (4.2 million barrels from Exxon compared to 3.8 million from BP), the stock market "values" BP’s barrels at $59 and Exxon’s at $122. So Hayward wants to realign BP with its core mission to boost profits: find oil and gas and make it into fuel. As James Harding of the The Times (London) put it, "Mr Hayward is setting out to make BP resemble Exxon, not The Body Shop."

But is this a "brutal reality check" for clean energy supporters, as Harding opines? Or did BP never really leave its oily roots in the first place? Should we be surprised that an oil company — that commits to a hardly-a-drop-in-the-oil-bucket investment of $8 billion in the next 10 years on clean energy — goes back to emphasizing fossil fuels?

I don’t think so. But nor should we discount the fact that they are investing in wind and solar. However, I do wonder whether this restructuring also alters BP’s plan for operating in a carbon-constrained marketplace.

Back in June, Hayward addressed policymakers in Berlin about climate change and how efficient and clean technologies – combined with a price on carbon emissions — will help slow global warming. While BP is talking the talk and making some overtures to clean energy, consumers – backed by a supportive marketplace and policymakers — will still need to be the driving force behind a clean and efficient energy future.

British Petroleum
The Times
Earth2Tech

Like other companies and industries wanting to "tell their side of the story" about energy and global warming solutions, the American Petroleum Institute (API) held its second conference call for bloggers on April 18th. API is the national trade association of the U.S. oil and natural gas industry. It represents more than 400 companies that work in areas such as exploration, refining, production, marketing, and transportation.

I was invited to join the call, hosted by API President and CEO Red Cavaney. I represented Maria Energia and Green Options. Other invited bloggers included Jeff McIntire-Strasburg (representing Treehugger), The Oil Drum, EcoGeek, NewsWatch: Energy (the Houston Chronicle), the Wall Street Journal Energy Roundup, Fortune/CNNMoney.com, ShopFloor.org (National Association of Manufacturers), and Wired.com's Autopia. Unfortunately I was not able to be on the call, but did submit questions in advance. The full, 18-page transcript is online and a podcast is also available. Here, I'll focus on the questions related to energy policy and global warming solutions:

Energy efficiency is the fastest, easiest, and cheapest way to cut our global warming emissions, and it was one of the first questions that came up. Tom Fowler of the Houston Chronicle asked whether API has a specific position on efficiency improvements for vehicles and appliances. Cavaney responded that energy efficiency needs to be the cornerstone of a national energy policy, but API doesn't comment on any specific sector other than to say that everyone has a responsibility:

''…so we don’t comment in great detail about how one might go about addressing CAFÉ [Corporate Average Fuel Economy Standards for vehicles], but we do feel that the transportation sector, like any other, has a responsibility to become more energy efficient….It’s the easiest way to add additional capacity is the barrel…So we find also that that message resonates very well with the individual consumer, but what we also find with the exception, generally, of California – the consumer hasn’t had a lot of recent experience on this and isn’t well-educated on it…"

I was surprised by this statement. It seems like every time gas goes up 2 cents, we're bombarded with fuel-saving tips from the media. Perhaps not enough credit is being given to the consumer, or perhaps I just notice the tips more because I watch for them.

Later, one of my submitted questions was asked: Where is the United States' biggest opportunity to increase energy efficiency? Transportation? Electricity?

Again, Cavaney didn't comment on any particular sector, explaining that API takes the position of "not sticking our nose in other people's business." But he did say that the private sector should work with government on energy efficiency solutions:

"…I think that we’ll end up getting surprising gains in every sector because to the business community, in most cases, energy efficiency is money that drops to the bottom line."

Cavaney also had a comparatively optimistic view of peak oil. He said that even after the world's oil production hits its peak, the fall of production will probably be gradual, rather than steep. He also believes that much of the world is "under-explored."

Jeff McIntire-Strasburg of Treehugger asked about API's stance on federal global warming regulations, like carbon dioxide (CO2) caps. Cavaney responded that API wants to continue with voluntary measures to cut emissions, because "that's how you push the technology." However, if CO2 regulations are coming down the pipeline (as some companies believe and have indeed asked for), API has no preference for a carbon tax versus a cap-and-trade policy, but went on to explain their opinion on the development of any carbon regulation in four parts:

"…we want to be at the table, and we want to share our experience, we’re willing and open to listen to others and we think, number one, that the government should not pick winners and losers in advance of that discussion getting underway, number two, we think that the market is the best place to solve and sort of all these varying things, number three, we think that multiple approaches and multiple opportunities, rather than one, is going to help get us there more cost-effectively. We think, number four, that the problem needs to have global participation, not just U.S. participation; it’s not going to be sufficient."

This reminded me of the frustration I felt when listening to ExxonMobil's Vice President of Public Affairs, Ken Cohen, answer a similar question. We get the same sort of circular answer: Yes, climate change is important. Yes, it requires action. But we don't have a position on the best action, but we should be involved, but it shouldn't just be required of our sector, and we have to make all the countries in the world do it, or it won't work. This sort of vague explanation shows a lack of leadership. We can't sit around waiting for other nations to get on board (while so many others have already). Global warming demands solutions now.

However, I am encouraged that API is reaching out to talk about energy issues and solutions. Many thanks to Red Cavaney for his invitation to be on the call and for his willingness to discuss these very tough issues. I hope that we see real leadership, partnership, action, and change from an industry absolutely critical to the fight against global warming.

Cross posted at Maria Energia

Oil will continue to be a substantial part of our lives until at least 2050, reports the International Energy Agency (IEA) in its 2006 World Energy Outlook. Currently sitting at 35 percent of our energy mix, oil is expected to be about 33 percent of the pie by 2030, assuming a business-as-usual scenario that takes into account renewable energy sources.

Asia will lead the way in consumption and a shrinking number of major producers will drive up demand. IEA predicts prices could reach $130 per barrel in 2030, and OPEC also assumes rising prices as demand outpaces supply. Reuters reports:

An official at oil exporters' group OPEC said oil's share of the world energy mix may be smaller in 2050 than today but it would remain important. "At OPEC we believe whatever the energy mix will be, it will complement the use of oil," said Hasan Qabazard, head of research at OPEC, source of more than a third of world supply. "Oil will continue to play an important role in developing and poor countries, as it played a very important role in the development of industrialised countries in the past."

With the consequences of global warming being felt around the globe, we can’t afford this economically or environmentally. A mere two percent decrease in oil use could be frustrating and demoralizing to those of us working for a clean energy future, but it must drive us as consumers, businesses as suppliers, and governments as regulators to move quickly, logically, and deliberately to break our addiction to oil before it breaks us and the planet.

Reuters News Service, via Planet Ark