Lower 48 CEO Dave Lawler discusses energy transition

On March 15, Dave Lawler, CEO of BP’s Lower 48 onshore upstream business, delivered a keynote speech at the University of Oklahoma Price College of Business Energy Institute’s 2018 Energy Symposium

Addressing an audience of students, scholars, policymakers, industry professionals and others, Lawler discussed the long-term global transition to a lower-carbon economy, and how BP is seeking to advance that transition in the United States.

He began his remarks by highlighting five key realities about the future of energy:

• First, the transition to lower-carbon energy sources is happening much faster than people predicted just a few years ago.
• Second, despite the rapid pace of the transition, the world still needs to do much more if it hopes to meet the emission-reduction goals set out in the Paris climate agreement.
• Third, the global energy transition is not simply about expanding the use of renewables; it’s about reducing greenhouse gas emissions while also meeting increased demand for reliable, affordable energy.
• Fourth, even in many highly aggressive lower-carbon scenarios - scenarios in which the world meets the Paris climate goals - oil and gas remain a significant part of the global energy mix for decades to come.
• Finally, natural gas in particular has a crucial role to play both as a “bridge fuel” to a lower-carbon future and as a “destination fuel” that can support renewable energy for the long run.

Lawler emphasized that governments, industries and individuals around the world face a dual challenge: They must meet growing energy demand while simultaneously transitioning to a lower-carbon economy.

As Lawler explained, BP has decades of experience addressing this dual challenge, and today all four components of its global business strategy are working to advance a lower-carbon future.

Citing just a few examples from the U.S., he pointed out that: 

• BP’s U.S. wind farms can produce enough electricity to power all the homes in a city the size of Philadelphia.
• BP is the largest supplier of renewable natural gas to the U.S. transportation sector.
• It is the largest marketer of traditional natural gas in North America.
• At its Cooper River chemicals plant in South Carolina, BP recently completed a $200 million modernization project that will enable the site to reduce electricity use by 40 percent and cut up to 110,000 tons of carbon emissions per year while also boosting overall production by 10 percent.
• Since 2006, BP Ventures has invested more than $290 million in 35 U.S. companies, including eight alternative energy companies.
• Many of the products made by Castrol - BP’s world-class lubricants business, which is America’s No. 1 motor oil brand for consumers who change their own oil - can boost engine efficiency and help drivers reduce their carbon intensity.

For example, BP’s Lower 48 business has an analytics-backed logistics system that helps operators prioritize which well sites to visit for safety issues, which ones to visit for maintenance purposes, and which ones to visit for other reasons.

As for “multilateral wells” - that is, multiple wells connected to a single wellbore - BP completed its first such wells a few years ago in New Mexico’s San Juan Basin. Multilateral wells allow companies to access more of the oil and gas in a reservoir while reducing the number of drilling sites.

BP currently is expanding its natural gas operations in the Lower 48. This expansion, Lawler said, “reflects a broader, global emphasis on growing our gas portfolio.”

He explained that BP considers gas absolutely crucial to the global energy transition - not only because it offers a lower-carbon alternative to coal, but also because it can provide necessary backup generation for renewables like wind and solar. After all, wind turbines can’t produce energy when there’s no wind, and solar panels can’t produce energy when there’s no sunlight. Natural gas, therefore, is the essential complement to renewables, helping them supply energy around the clock.

Lawler acknowledged that “whenever you talk about the lower-carbon benefits of natural gas, you have to address the methane challenge.”

He told the audience that reducing methane emissions is a key focus area for BP, which has worked hard to be a leader in understanding the challenge and addressing it.

In the Lower 48, specifically, BP has achieved significant methane reductions through a number of voluntary actions. As Lawler observed:

• BP’s Lower 48 business has replaced around 99 percent of its high-bleed pneumatic controllers with continuous low-bleed and intermittent pneumatic controllers.
• The business also has reduced venting during liquids unloading by implementing enhanced automation, plunger lift, and optimized shut-in cycles through its Smart Automation project in the San Juan Basin.
• In addition, the Lower 48 business implemented “green completion” technology before it was a regulatory requirement. (This is the technology that recovers natural gas for sale and minimizes the amount of gas that is flared or vented during the completion of wells.)
• Meanwhile, the business has replaced chemical injection pumps with solar pumps.

Lawler said that BP Lower 48 continues searching for other viable opportunities to reduce methane emissions, in cooperation with governments agencies and academic institutions. For example, the business is analyzing various leak detection technologies that could help it identify leaks more quickly and more efficiently.

BP’s progress on methane shows how it is “incorporating lower-carbon solutions and emission-reduction technology into our traditional operations and products,” Lawler said.

Toward the end of his remarks, Lawler stressed that the challenge of transitioning to a lower-carbon economy cannot be solved by one company or one industry singlehandedly. “Everyone has a role to play.”

Lawler urged government policymakers to create a market-based energy framework that encourages greater competition, efficiency and innovation.

If governments establish such a framework, he said, they can help establish the right incentives for energy producers and energy consumers alike.