BP’s Tony Hayward continues:
“First, energy companies and governments must have confidence in each other if we are to invest the $26 trillion needed to meet expected growth in energy demand over the next twenty years.
Fiscal and regulatory polices must be stable and enduring so industry can invest with confidence. And we must make the right policy choices, because inappropriate and ineffective regulation can discourage investment.
Second, a free and open energy market is our best guarantee of energy security. That’s true whether you live in Beijing, Brussels, or Baltimore.
Over the last 30 years the energy world has become far more inter-connected. Almost two thirds of the world’s oil is traded across international boundaries.
This huge and agile market makes it possible to respond quickly to major supply disruptions – whether it’s a hurricane in the Gulf of Mexico or political unrest in an energy producing nation.
Increased global integration in energy trade is an essential response to the growing imbalance between energy supply and energy demand. We need genuine cooperation to lower trade barriers and tariffs on all forms of energy.
But trade growth is a fragile process. Open markets require constant support and appropriate oversight; they are not just a fact of life.
Third, we must make energy efficiency and energy conservation a priority.
The prize is huge.
Some believe greater use of mass transit, high mileage cars, and green building standards could save enough energy to offset growth in US energy demand for the next decade.
Every BTU and every dollar saved are a contribution to global energy security and an investment in the health of our economy and our planet.
Fourth, we must begin to address the challenge of climate change. Until energy producers and consumers know and pay the cost of carbon, the uncertainty associated with planning and investing in the transition to a low carbon economy will remain high.
Pricing carbon could make energy conservation far more attractive and wind, nuclear and solar power more cost competitive.
It will also allow informed investment in fossil fuels and in the technology necessary to reduce the carbon emissions associated with their use.
In my view, Cap and Trade is the best option because it gives environmental certainty based on an absolute emissions cap. The ultimate objective is a global Cap and Trade system but that is probably a little way off. The best place to start is at the national level.
Fifth, we must support the development of hydrocarbon resources here in the US and around the world.
Even with the rapid growth of biofuels, solar and wind — fossil fuels will continue to provide most of the energy we consume for the foreseeable future.
Our industry must continue to find and develop new sources of oil and gas, and it is important that governments across the world encourage that effort.
President Obama — like his predecessors — has made reducing US dependence on oil imports a central pillar of his energy policy.
In the last thirty years, oil imports have increased from 36 to 65 percent of US consumption as the search for new sources of domestic crude has been constrained by lack of access to promising areas.
The resource estimates for the places now off limits exceed 100 billion barrels of oil in place, with 30 billion recoverable.
Today, a fourth of US oil production comes from the 15 percent of the US outer continental shelf that is available to our industry.
We have the know-how and technology to tap these resources safely and with minimal impact to the environment.
Sixth, we need transitional incentives to make low carbon energy competitive with other energy sources; and to kick start technologies for large scale carbon abatement such as CCS.
These incentives should reward cost reduction and deployment at scale, with the purpose of making new technology commercially competitive in a well defined time frame.
And finally, we need a step change in investments in energy technology research, development and deployment.
At BP we will spend more than $500 million over the next ten years to develop better energy crops, better biofuels and better processes for producing them.
Much of this ground breaking research is taking place in partnership with the University of California at Berkeley, the Lawrence Berkeley National Laboratory and the University of Illinois at Champaign.
We designed the program in consultation with Dr. Steven Chu, the Nobel laureate who now serves as Secretary of Energy in President Obama’s cabinet.”
BP’s Tony Hayward continues: