There's a big difference between a gasoline powered SOFC auxiliary unit and a primary drive PEM unit powered by reformed gasoline. Just ask Ballard and GM/Exxon. Meanwhile, Sir John gives a excellent clue about the future....namely, natural gas, ceramics, synthesis gas, and gas-to-liquids technology. All are a derivative of HIS vision of energy's future and what BP has been working on for the past 3 years.
BP Changes Gear In Switch To Gas
Ian Howarth
09/21/2000
Australian Financial Review
Executive interview with Sir John Browne BP global CEO
The world is hurting from high oil prices, but it's not because we are running out of oil. While politically inspired price rises have damaged the industry's credibility, petroleum companies are being forced to adapt to the more immediate concerns about climate change.
Leading the charge into cleaner, greenhouse-friendly fuels, and spending billions of dollars in the process, is the newly rebranded BP, the world's second-biggest oil company.
In the past year, it has spent $US127 billion ($234 billion) acquiring companies and assets to shift its portfolio away from crude oil to a position where natural gas now totals 40 per cent of its assets.
BP has sold all its heavy crude oil assets and is concentrating on developing new fuels synthesised from the simple methane (natural gas) molecule.
Leading the charge into BP's green future, global chief executive officer Sir John Browne believes fervently that BP's role as ``one of the world's largest suppliers of oil and gas and petrochemicals carries with it some serious responsibilities''.
``The world needs the fuel and products we produce,'' he says, ``and our challenge is to meet the world's growing needs at a reasonable cost and in ways which do not destroy the environment.
``The natural gas content of BP has gone from 15 per cent of our total hydrocarbon output to 40 per cent. That proportion will rise a bit more ... but we will not ignore the great oil resources we have when they are really competitive with OPEC supply.
``This is a very dramatic shift and that was done on purpose because we believe that natural gas will grow faster than oil.''
While crude oil prices are bouncing erratically, BP believes natural gas will rapidly increase its share of the world's energy portfolio, shifting the balance of power away from the OPEC cartel and reducing its influence on the energy market.
Sir John said: ``I don't think we are running out of oil. There is a lot of oil and I don't think we have got to the point where the production rate has got to its maximum.
``There will come a time when the production rate will be limited, but it may remain at that rate for a long time.
``Right now, production grows quite handsomely to meet demand and have a surplus and indeed the surplus has been very large and has been in the hands of several producing countries. That is why the price of oil has been very volatile. Right now, most of the spare capacity is in the hands of Saudi Arabia. Some spare capacity is in the hands of Iraq, but the leader of Iraq is somewhat unpredictable. There is a minor amount of capacity in some of the other Gulf States, Kuwait and the Emirates.''
Sir John said Venezuela had used its spare capacity for its own purposes in recent years, which drove the crude oil price down to its low point of $US10 a barrel 20 months ago.
The question then was: how low can the price go? That period of low oil prices worked to BP's advantage by fraying the confidence of other oil industry players and rendering them vulnerable to takeover.
``That level of $US10 oil was unsustainable for the Gulf countries, hence their determination to turn the price around and they have done that,'' Sir John said, adding: ``It is impossible to forecast where the price of oil will go. The best you can say is that the price will vary.''
In the past year, non-OPEC countries have lifted crude oil production rates by more than 1 million barrels a day.
Sir John said the period of weak prices in 1998 had discouraged investment and some short-term production was knocked out of the system.
Now BP has responded by pinning its faith on new energy forms, principally gas, but also through investing in developing solar technology and ceramic fuel cells, which hold promise for power generation and even vehicle engine technologies.
BP sees methanol, produced from natural gas, as a promising liquid fuel for the fuel cell system. But Sir John said: ``The real question is, what about demand? What are people going to use hydrocarbons for in the future?''
BP asked itself that question and found there was already a fundamental shift in the hydrocarbons market with a much bigger and growing role for natural gas. And the massive restructuring of its portfoliois was designed to reflect that future.
``If we could synthesise gasoline [from natural gas] to get exactly the product you want, rather than distilling crude oil to get broadly what you want, but with impurities like sulphur, benzene etc people would prefer it.''
The synthesis process was ``absolutely controllable'', Sir John said. ``The most controllable naturally occurring product is natural gas. It is the simplest molecule and [many] things can be done with it.
``Technology has allowed us to improve enormously the energy conversion from methane to other forms of energy.'' |
