A conversation with the head of BP is incomplete without discussion of climate change initiatives, and the Chronicle’s chat with new CEO Tony Hayward this week was no different. Six weeks into his new job, Hayward says the company’s commitment to investing in alternative and renewable fuels in addition to finding oil and gas is as strong as ever.
| BP’s new top guy, Tony Hayward
BP is already outspending the world’s other oil majors on alternative and renewables at $8 billion over a decade. The company has wind and solar divisions, and is working at its Carson, Calif. refinery to use an oil refining byproduct to produce hydrogen and carbon dioxide. The hydrogen will be used to fuel electric power, while the carbon dioxide will be injected into mature California oil fields to produce otherwise inaccessible oil.
Exxon Mobil Corp. CEO Rex Tillerson is at the other end of the spectrum, eschewing such investment beyond supporting research into new technologies because such ventures as solar, wind and biofuels need subsidies to make money or break even.
Hayward says he and Tillerson share like views on subsidies.
“I’m absolutely with Mr. Tillerson, who says quite rightly that building a business based on a subsidy is not a good idea. Because one day the subsidy goes away,” he told the Chronicle.
He supports some kind of near-term price support that will diminish over time while accelerating technological advances in low-carbon energy. Hayward spelled out his vision in more detail in this speech at the G8 Summit in Berlin nearly two weeks ago.
He’s also not riding the wave of corn-based ethanol as the biofuel flavor of the day. BP is a major ethanol blender, having blended more than 700 million gallons with gasoline last year. But Hayward says the life cycle of carbon dioxide is the same in a gallon of gasoline as in a gallon of ethanol, so BP’s eye is on the next generation of biofuels.
The company is pouring $500 million into the newly created Energy Biosciences Institute in partnership with the University of California, Berkeley, and the University of Illinois at Urbana-Champaign.
He says the institute’s task will be to create the kind of raw material companies need to create low-carbon fuel, such as a plant that grows fast, needs no water, has high cellulose lactose density and lots of sugar.