Jason Barton

Professional Information and Energy News

Archive for the ‘BP’ tag

BP Chief Says Brazilian Ethanol is Best Bet to Replace Petroleum

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There is definitely substantial agricultural land for much more fuel, fiber, and food production in Brazil, as well as preservation of forests and even reforestation, but the headline seems quite an overstatement of the facts.

My PhD research has investigated the potential for Brazil to supply enough ethanol for the U.S. Renewable Fuel Standards, which may have renewables accounting for as much as 20% of our transportation fuels in 2022. There does appear to be sufficient arable land for both Brazilian demand as well as to supply the U.S. for these renewable mandates signed into law by George Bush in 2007.

To say there is enough land to replace all petroleum globally, however, especially considering the booming demand in China and India as their economies expand and have more people driving cars, is a stretch, to say the least.

Between the typos, the outdated photo, and the lack of background research for the article below, I’m wondering where to send my resume for a job at the Telegraph.

Brazilian ethanol is the best hope for replacing oil, says BP’s Bob Dudley

Ethanol derived from Brazilian sugar-cane offers the best hope of replacing oil as the world’s main source of fuel when it runs out, according to Bob Dudley, BP’s chief executive.

Brazilian ethanol is the best hope for replacing oil, says BP's Bob Dudley

By Robin Yapp, in Sao Paulo 7:03PM GMT 13 Feb 2011

He said Brazilian ethanol is the “best type of renewable energy” and offers the possibility of an “ultrapotent fuel that could revolutionise the market”.

“The alcohol extracted from sugar cane is cheaper, less polluting and more efficient than that from corn, for example, produced in the US.

BP is channelling its research into renewable fuels accordingly, with 40pc of its $1bn (£625m) annual spend in this area targeted at Brazilian ethanol, Mr Dudley told the weekly Brazilian news magazine Veja.

“There will obviously a time when the oil runs out and with this prospect on the horizon, we will use more renewable energy sources,” he said.

Read the entire article here.

Written by Jason

February 17th, 2011 at 9:55 pm

BP Oil Spill Demonstrates Need for (Limited) Government Intervention

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Is it possible for the gov’t to establish who–whether BP, Halliburton, Transocean, Anadarko, or others– is responsible for what portion of the damages in an efficient manner?

As has been written many times before on this site, this is the job of government: internalize the costs of these external damages so that the firms and other parties responsible are paying the bills.

The report said the explosion that triggered the worst offshore oil spill in U.S. history resulted from management failures by BP and its contractors as well as “failures of government to provide effective regulatory oversight of offshore drilling.” It said the root causes of the disaster were “systemic” and “might well recur” without significant changes to industry practices and government policies.”

The regulation described here is usually highly inefficient, inhibiting firms from the innovation that makes them both safe and profitable. When firms are held responsible for the costs of their actions, rather than strangled by regulation, they can perform the risk analysis necessary to see whether or not the technology and infrastructure they have available will make a potential drilling location, yes, both safe and profitable.

Already, the report has its detractors. Rex Tillerson, chief executive of Exxon Mobil Corp., told reporters Thursday he did “not agree that this is an industrywide problem,” adding that the report’s conclusions shouldn’t be extended to the entire sector. Exxon was one of a number of oil companies that claimed last summer that the Gulf of Mexico blowout was a one-time event caused by unusual and risky decisions by BP.

Holding responsible those specific firms that were involved with the tragedy* also means avoiding placing blame on those firms that are more careful with their choices of where and how to drill, mine, etc.

Under this kind of scenario, the costs associated with the 2010 Gulf spill would be, for the most part, passed along to the customers of these firms, but this is a much more efficient means of paying them than having them paid by taxpayers who use the products and services provided by BP from the Deepwater Horizon rig.

This brings us back to the original question: To what extent it is possible that government establish responsibility?

The goal is to ensure that those benefitting from the the consequences, both intended and unintended, of the drilling, are also held responsible for the direct as well as indirect costs. Taxpayers benefit in different proportions that the government is not able to establish.

The companies, once faced with the fines and other clean up costs, will pass those costs along to their users, meaning We The People (private consumers, not taxpayers) are able to decide how much these benefits are really worth.

  • JANUARY 7, 2011

BP Gets Lift From Oil-Spill Report


The U.S. presidential commission’s report on last year’s Gulf of Mexico oil spill reduces the likelihood that BP PLC will be found guilty of gross negligence, legal experts and industry analysts said Thursday, potentially lowering the ultimate cost of the disaster to the U.K.-based oil giant.

A 48-page chapter from the report, released Thursday, shone a harsh spotlight on BP’s actions in the run-up to the blast at its gulf well, but also piled criticism on two of the company’s contractors, Transocean Ltd. and Halliburton Corp.

Read the entire article here.

Written by Jason

January 11th, 2011 at 9:24 pm

Real People Show the Need to Internalize the Externalities

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If the devastation of the Gulf oil spill is too abstract, as it is for many of us, this story places faces and immediacy on the tragedy. The women discussed here have already lost their husbands and are now in danger of further losing their ability to make ends meet, as soon as the end of this month, this of all months. Yet executives and policy makers bicker over who’s responsible.

If BP and the other companies that operated the well were not fully prepared to pay the costs, then they should not have ventured after the benefits.

To put it unemotionally, the pain these women are experiencing is an externality. The job of government is not to distort the market, letting these firms profit at the expense of third parties, but to ensure that these companies are free to pursue their profits while ensuring that they must pay the costs, internal and external, direct and indirect, associated with their business.

Ah, it’s so simple, no?

  • DECEMBER 16, 2010, 12:08 P.M. ET

Widows Push Congress to Act on Gulf-Spill Measure


Two widows of men killed in the Gulf of Mexico explosion that led to the largest offshore oil spill in U.S. history say they fear Congress is losing interest in passing a measure soon that would allow them to seek damages in court for the tragedy.

Under current law, families of anyone killed at sea—rather than on land—are banned from receiving damages for loss of care and comfort. Congress is considering a measure that would change the law for families of workers who died in the BP PLC explosion.

Read the entire article here.

Written by Jason

December 16th, 2010 at 11:54 pm

Battered BP Thinks Twice About Arctic Oil

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Risk management. Oil drilling. The public. For a business to perceive risk, it is largely measuring costs. There are very few direct costs with environmental damage, so the burden lies with us as consumers and voters to put pressure on firms to make decisions like this one by BP not to drill in areas that pose environmental risks.

When we stay informed of these events (with the help of a diligent and free media) and hold companies accountable to fix their mistakes, or, even better, motivate them to avoid committing them in the first place, we’re doing our job to ensure that a capitalist system functions properly.

Parmy Olson, 08.26.10, 08:05 AM EDT

A foray into environmentally sensitive Greenland must have looked like a bad idea.

LONDON — It’s been four months since the Deepwater Horizon drilling rig explosion that killed 11 people and caused the worst environmental catastrophe in United States history. So, how is BP approaching new opportunities to explore for oil? Probably with a lot of caution.

The oil giant confirmed Thursday that it would not bid for an oil exploration license in Greenland and refused to say whether the decision had been influenced by the deepwater well blowout in the Gulf of Mexico. BP had “decided not to proceed with a bid” during a licensing round, though it had been involved at an early stage, a spokesman told the Associated Press.

Read the entire article here.

BP Sells Oil Rigs, Keeps Renewables

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Whatever their faults, and there are many, BP has run a successful business for many years. This decision to retain their alternative and renewable energy assets in the face of massive selloffs in other areas, including oil-rich Venezuela and potentially Alaska, signals the belief on the part of some very intelligent business minds that this once hippy pipe dream has some very profitable potential.  Does it also signal their belief that Venezuela (or Alaska) may be destabilizing? That’s a separate matter.

The main point here is that the big players in the energy world see a necessary place for wind, solar, and other renewables.

July 14, 2010, 8:27 p.m. EDT

BP: No plans to sell alternative-energy units

By Naureen S. Malik

NEW YORK (MarketWatch) — BP PLC (BP, BP.LN) has no plans to sell its renewable-energy businesses as the British oil giant seeks to sell billions of dollars of assets in the wake of the Gulf of Mexico oil spill, the head of the company’s wind-power unit said Wednesday.
BP executives “have reaffirmed their commitment to the alternative-energy business; they told us it’s not for sale,” Graham said. “We look at every option all the time; if the price is right, we will sell.” However, “we haven’t built it [the renewable-energy business] to sell it. There is no need to sell it.”
The integrated oil company talked about selling off the renewable-energy business at an analyst meeting two years ago when it had a value of at least $5 billion, but later “they took it off the table,” said Argus Research analyst Phil Weiss. BP doesn’t break out the value of these assets in its financial reports. Every major oil company has some exposure to alternative energy, albeit a relatively small one. “I’m not sure it would be wise for any of them to move out of that space altogether,” Weiss said.
BP is reviewing options to build two wind-power projects totaling 400 megawatts, either by expanding existing wind farms or by going to new locations, possibly in California, Colorado, Indiana or Wyoming.
“We are not going offshore,” Graham said when asked whether the company was interested in developing wind power along the East Coast. “We have not seen anything that would attract us to go offshore. Too risky.”
By the end of the 2010, wind-power capacity will total 1,500 megawatts, up from 1,200 megawatts. BP has two projects under construction in Idaho and Colorado totaling 375 megawatts. A megawatt is enough to power up to a 1,000 homes.

Read the entire article here.

Written by Jason

July 20th, 2010 at 8:30 pm

The Coming Era of Extreme Energy?

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I am not an alarmist who believes we need an immediate, radical shift in our nation’s energy matrix. The compendium of tragedies in the article below presents another perspective containing several sound points, but also some impractical emotional appeals not based in fact nor reason.

Were it published in February, Klare’s article would raise few eyebrows. Now, because of a single terrible disaster, it sparks ample discussion, including an article by Daniel Gross today in Slate Magazine called “The Dangerous New Era of ‘Extreme Energy.'” In the second paragraph of that article, Gross claims that “When the land-based oil was exhausted, American prospectors went to sea. And when the shallow-water oil was exhausted, they went farther out.” Even if one didn’t immediately know that these claims were inaccurate, Gross graciously contradicts himself just a few sentences later to confirm that he’s simply engaging in yellow journalism: “Today, deep-water Gulf wells account for about one-quarter of the oil the United States sucks from the earth.” The other 75% come from the places Gross just said were exhausted.

I like Slate Magazine, but come on, Mr. Gross, we don’t need to lie to make the important points about changing our practices when it comes to our energy resources. Such dishonesty or carelessness only undermines your point.

When we see a car accident, even a massive one involving several vehicles and loss of multiple lives, do we say we should no longer drive? Do we argue that cars and roads need to be completely redesigned? No. We learn from the details, such as the dangers of drinking or texting while driving, the importance of seat belts, etc. The Deepwater Horizon rig may have been a bad idea from the start, or there may have been clear mistakes as the companies involved were trying to close the well, and these problems should be examined and learned from so they do not happen again. But there is little evidence to suggest that the problems that occurred should lead to the elimination of the thousands of rigs in shallower water that have been operating safely for decades.

Klare is correct to argue that government oversight of health and safety regulations in oil and gas drilling has been woefully inadequate. But as I pointed out in an earlier post, given the poor track record of these government bureaucracies, expanding their size or giving them more power may not be the best option. As citizens and consumers, as well as energy executives, politicians, and bureaucrats, paying greater attention to our sources of energy and their impacts is as fundamental to a safe energy matrix as energy is fundamental to our way of life, to all life.

If it’s true that sunlight is the best disinfectant, then the disaster in the Gulf should expose the many problems that led to the explosion, and even to the poorly planned implementation of the Deepwater Horizon rig in the first place. We should learn from these mistakes and move forward.

Yes, we need to pay greater attention to health and safety considerations as energy resources become more difficult to locate and extract. Let us be pragmatic in this pursuit, and not fall victim to alarmist calls for unrealistic or unnecessary measures. One market based solution is simply to make companies liable for most or all damages from accidents such as the one occurring now in the Gulf, rather than capping their liability and forcing taxpayers to cough up the rest.  Consider the current estimates that put clean up costs around $1 billion. BP recorded first quarter profits of just over $6 billion. They can afford to foot the bill, and if they try to pass the costs of their negligence on to the consumer, competition from other companies will inhibit this effort.

Most importantly, as readily available resources become more scarce, we need to examine our energy use more carefully. Increasing energy efficiency saves money while reducing our exposure to risk. Long term planning needs to include increased efficiency as well as development of technologies that can gradually enter our energy matrix in the coming decades as oil and gas become more scarce, more difficult to extract, and more expensive.

The next few decades could have us witnessing more problems like the one in the Gulf; but thoughtful, measured, gradual changes in our energy practices are possible, and necessary.

Michael T. Klare

Michael T. Klare

Author and Professor of Peace and World-Security Studies at Hampshire College

The Relentless Pursuit of Extreme Energy: A New Oil Rush Endangers the Gulf of Mexico and the Planet

Yes, the oil spewing up from the floor of the Gulf of Mexico in staggering quantities could prove one of the great ecological disasters of human history.  Think of it, though, as just the prelude to the Age of Tough Oil, a time of ever increasing reliance on problematic, hard-to-reach energy sources.  Make no mistake: we’re entering the danger zone.  And brace yourself, the fate of the planet could be at stake.

It may never be possible to pin down the precise cause of the massive explosion that destroyed the Deepwater Horizon drilling rig on April 20th, killing 11 of its 126 workers.  Possible culprits include a faulty cement plug in the undersea oil bore and a disabled cutoff device known as a blow-out preventer.  Inadequate governmental oversight of safety procedures undoubtedly also contributed to the disaster, which may have been set off by a combination of defective equipment and human error.  But whether or not the immediate trigger of the explosion is ever fully determined, there can be no mistaking the underlying cause: a government-backed corporate drive to exploit oil and natural gas reserves in extreme environments under increasingly hazardous operating conditions.

Read the entire article here.

Shell CEO: Policy Impact Of Gulf Spill Yet To Be Seen

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It’s interesting to watch this debate unfold. Yes, I prefer to focus on the debate, rather than the potentially devastating ecological impacts of the spill itself. There’s enough bad news in the world.

When we see a car accident we don’t generally have the reaction that we shouldn’t drive cars anymore. We usually don’t even say we should drive less. If the driver wasn’t wearing a seatbelt, or had been drinking or driving recklessly, we’ll be reminded that those behaviors are irresponsible and we can learn from that.

Similarly, with literally thousands of off-shore oil rigs in operation, few of them creating significant ecological problems, hopefully we can focus the debate on these extremely deep water wells, and can ensure that the technology is in place to avoid spills like this in the future. If that technology isn’t available, then these deep water rigs are not worth the risks they pose.

MAY 4, 2010, 6:53 A.M. ET

   By Max Lin

SINGAPORE (Dow Jones)–The recent massive oil spill following an explosion that destroyed a deepwater oil rig in the Gulf of Mexico represents a pivotal moment for the entire oil industry, but it is too early to say whether it will have any impact on future U.S. policy, Royal Dutch Shell PLC (RDSB.LN) Chief Executive Peter Voser said Tuesday

Read the entire article here.

Written by Jason

May 4th, 2010 at 6:12 am

Why Ford Wants Microsoft to Manage the Electric Vehicle Influx

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If there is a significant move to electric vehicles, and most of us come home from work and plug in our vehicles at the same time, there’s going to be an even bigger glut that we already have, and we already have a big glut. To those who deny the possibility, I’ll point to a recent conversation with a VP of BP (formerly British Petroleum) who said that in 50 years, the only use for oil will be for aviation. (Well, first he said that “we will never run out of oil.” When pressed about the meaning of “never,” he said not in his lifetime, and probably not in his kids’ lifetime. He was about 60, maybe 55. Clearly he’s not a geologist.)

The point is not to argue timescales or the finite nature of petroleum, but to point out that even the higher ups in the petroleum industry are thinking that plug-in vehicles are the wave of the future.

If these people within the petroleum industry and the folks discussed in the article below are correct, then the technology discussed in this article will be of the utmost importance to ensure a smooth transition to the infrastructure required for such a system.


Apr. 1, 2010, 12:00am PDT

Ford and Microsoft’s announcement on Wednesday that they’ll use Microsoft’s Hohm tool to minimize energy costs for drivers of Ford’s electric vehicles — and help limit strain on the power grid for utilities — represents a big step in the development of a “smart charging” ecosystem. But Microsoft and Ford both say Hohm, and other tools like it, need to — and will eventually — offer much more than this initial step.


Thousands of companies — many of them startups — are working on hardware and software for charging plug-in vehicles, Gioia said at the time, adding “We have not come even close to a funnel.” With an open architecture, the idea with Hohm is to keep the doors open for awhile longer.

Read the entire article here.

Fmr. CEO of BP, John Browne’s memoirs

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This short article is an interesting read about what looks like a very interesting, much longer read. Having worked at BP’s Energy Biosciences Institute, I’ve been intrigued by what I’ve learned about the company. His comment that corporate social responsibility “is not just political correctness, but a means to safeguard investments for the long term,” presents what I see to be an effective level, one with which I once might have found fault, but am now much more prone to pull. I’ll have to find this book.

Mar 4th 2010 | From The Economist print edition

Beyond Business. By John Browne. Weidenfeld & Nicolson; 310 pages; £20. Buy from Amazon.co.uk

DURING his 12 years as boss of BP, John Browne was the master of many complicated briefs. He launched three big takeovers, sparking a wave of consolidation that reshaped the industry; to the horror of his peers, he admitted that oil firms had a part to play in the fight against global warming; he invested in Russia’s lucrative but lawless oil business with much greater success than other Western oil firms—and he made pots of money for BP’s shareholders, year after year.

Read the entire article here.