Delivered at the T&T Energy Conference 2020
So, we are at the end of another Energy Conference and it has been a thought provoking two days.The topics explored so far will help us progress issues that are critical to this industry. Or more correctly, to the industry as we know it today. However, we cannot talk about shaping the energy future of the Caribbean without putting that future into context.
Compelling global caseThe world as BP sees it, will continue to want more energy. We expect energy demand to rise by around a third by 2040. Most of that increase coming from the developing world.[Cue Slide: Energy Outlook Scenarios]But that’s only half the story.The world demands more energy, but it also demands energy that is kinder to the planet. It’s what we call the dual challenge. How we meet the rising demand for energy while reducing carbon emissions.
And our consumers, investors and even our employees expect us to act.The case for this is clear.
Based on our current trajectory, CO2 emissions are projected to grow by around 10 percent by 2040, but to meet the Paris climate goals, emissions need to fall by close to 50% by 2040. We are going in the wrong direction.The world is not on a sustainable path and our industry has a key role to play in solving the problem. That’s because the energy sector accounts for around 35 percent of man-made greenhouse gas emissions with power generation accounting for a large share of those emissions.
The BP responseSo, how do we respond? At BP, we have embraced this global challenge across our various businesses. I am proud that I am part of a company that is already in action.We accept the climate science. We understand the problem enough to act. And we are committed to being part of the solution.
A complex problem
But this is a complex problem and there is no one-size-fits-all solution. BP operates in 78 countries.
What we have experienced is that each country has different energy needs, different supply options, different infrastructure to produce, store and distribute energy, and each economy is structured differently. Because countries have different starting points, we cannot rely on a single policy prescription.It would be great if it was as simple as switching to renewables. A few weeks ago, I was helping my daughter prepare for a school debate on the pros and cons of introducing renewable energy to Trinidad and Tobago. Like many young people she had deeply passionate views on climate change and even questioned why I would still want to work for a fossil fuel company. Her argument, like many we hear today, was that we need to stop producing oil and gas and move 100% to renewables.
I loved her challenge … but as I said before, if it were only that simple! .I explained to her that Yes - renewable energy is important, but this is only part of the solution if we are to limit the increase in global temperatures to less than 2 degrees. To deliver significantly lower emissions, every type of energy needs to be cleaner.
Reduce, Improve, Create (RIC)
So how are we in action to address this? At BP we are working to reduce emission from our operations and we are thinking very differently about the future and about the shape of our business.
We have three areas of focus. We call it the RIC framework and RIC stands for reduce, improve and create. We are systematically reducing CO2 and methane emissions across our operations from flaring, purging and from our logistics activities; we’re improving our products to help customers lower their emissions, developing more efficient and lower carbon fuels, lubricants and petrochemicals; and we have been busy creating new low carbon and renewables businesses, including(Cue slide: Alternative Energy)renewable fuels, renewable power, and renewable products. We have built strong partnerships through new ventures including:
BioFuels, (Biopower, Fulcrum BioEnergy)
• wind and solar power generation (LightsourceBP)
• ultra-fast charging services for electric vehicles (BP Chargemaster, Freewire)
• technologies that promote energy efficiency (Peloton, ONYX Insight)
• and we are even looking at building materials (Solidia Technologies – focused on cement and concrete)
As we developed these new ventures, we have found that we have had better success when we partnered and collaborated with others. We intend to continue finding the right partners for other new ventures and this is something that I encourage you in the room to do, to seek out new partners as you look into new low carbon business opportunities.
BPTT ApproachIn Trinidad we have also developed our Regional low carbon strategy.
In our operations we are looking at ways to improve the efficiency of power generation offshore, as well as the energy efficiency of our offices. We are designing our future offshore facilities to be greener and we are optimizing our logistics – all in an effort to make sustainable emission reductions.
We are collaborating with other stakeholders to help the country achieve its Paris goals.
BPTT has supported an effort by UTT, UWI and the University of Texas to explore opportunities for Carbon Capture Utilization and storage – better known as CCUS. We are exploring opportunities in renewables, hydrogen and other low carbon business models. Just last week we held a series of internal workshops with some of our global experts to continue this work. We are excited by the opportunities to collaborate with others, building on the solid foundation of our current energy industry to help shape the future or energy in T&T and the wider Caribbean.
Why is this important to T&T and the wider region and why now?
As a signatory to the Paris Agreement, Trinidad and Tobago is expected to fulfill its commitments but as an island state we also feel the effects of climate change firsthand. We are already seeing stronger hurricanes, coastal erosion from rising sea levels, severe flooding and prolonged dry seasons.In a real way, we are protecting our own future.Beyond climate change, like it or not, our economy is dependent on hydrocarbon production which, in a scenario of a rapid global energy transition, would leave our energy exports very exposed. So, from an economic perspective, it is far better to actively shape the energy transition and create opportunities for T&T to evolve our energy economy in a controlled way.
I believe we have what it takes
We have an advantage here with over 100 years of experience in energy.
We have world class local expertise and know-how;
We have reinvented our energy economy before as we shifted from oil to gas, built a strong petrochemical sector and developed a world class LNG industry.
We have the advantage of gas being the fossil fuel with the lowest carbon intensity and the understanding that gas will continue to play a vital role in the energy transition.
We have some of the world’s leading companies in the upstream, the downstream and in the energy services sector operating here in Trinidad and Tobago. Amongst us we already have access to local and global expertise and technology.We have innovative local entrepreneurs already exploring opportunities in renewables and hydrogen.
Our industry has amazing talent, technology and know-how, and we have solved some of the world’s most complex problems..... and we can certainly play a role in shaping the energy future for our region. This is within our grasp....... Future generations are demanding this of us. My daughters are already demanding that of me.
How T&T is respondingThe Honourable Minister outlined what the Government is doing to achieve its commitments to the Paris accord and to encourage a national culture that’s more focused on conservation BPTT fully supports the Government’s direction. Meeting T&T’s Paris Commitments is a huge task and I commend the Minister and his team for getting into action to tackle the issue.
One of the biggest challenges we face is creating that culture of conservation. To achieve this there needs to be a focus on education and behavioral change. The Government’s push to add renewables to power generation is also to be commended.
As many of you would know, BP, Lightsource BP and Shell have submitted a joint bid in the Government’s Request For Proposal (RFP) for renewable projects to underpin the country’s commitment to the Paris Agreement.We wait on a decision on the bid but Honourable Minister, may I say that we are excited by the possibility of being part of Trinidad and Tobago’s energy transition! We see this as just one small step to opening the door to many more possibilities.
It’s up to usMinister Le Hunte has laid out what the Government is doing. But it’s not up to the Government alone. It’s up to all of us.T&T, like the rest of the world, is changing. The voices calling for change are getting louder. There’s an opportunity for us – everyone here this afternoon – to play a role in that change.
We must first get our houses in order by reducing emissions and focusing on conservation in our operations. Secondly, we need to collaborate – operators, service providers, government, academia – to identifying lower carbon business models and new non-traditional energy opportunities that can address the dual challenge and create a new energy future for T&T.
It will take a new way of thinking and new ways of working together.
Turning talk into action
Lastly, we need to turn talk into action.
Conferences like these are invaluable in identifying the issues but tackling climate change and grasping the opportunity to reinvent our industry requires us to act now.
It means finding the right mix of quick wins and pursuing longer-term ideas.It means being bold in our actions.It means collaboration.It means taking ownership and leadership.
For me, it means being able to respond to my daughters when they ask me what a company like BPTT is doing to tackle climate change. I look forward to the rest of this evening’s session and our doors at BPTT are open to your ideas and to those who want to join us on this journey.
Thank you and do enjoy the rest of the conference.