Innovating Clean Technologies at BP by Dr. Steve Koonin, BP

Steven E. KooninChief Scientist, BP plcClean Tech Investor Summit, Palm SpringsFebruary 6-7, 2008

Innovating clean technologies at BP

US energy supply since 1850

0%

10%

20%

30%

40%

50%

60%

70%

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90%

100%

1850 1880 1910 1940 1970 2000

RenewablesNuclearGasOilHydroCoalWood

Source: EIA

distinguishing aspects of energy technologies

• Scale

− Large infrastructure, amounts of material, numbers of units

− Requires large capital, leverage of existing infrastructure

• Longevity

− Lifetimes of large equipment and/or interoperability imply slow changes

• Ubiquity

− There are many players with sometimes divergent interests

− Consumers, suppliers, governments, NGOs, …

• Incumbency

− New energy technologies must compete on cost

− May not provide any qualitatively new service to the end-user

evaluating energy technology options

• Materiality

• Current technology status and plausible technical headroom

• Budgets for the three E’s:

− Economic (cost relative to other options)

− Energy (output how many times greater than input)

− Emissions (pollution and CO2; operations and capital)

• Other costs - reliability, intermittency etc.

• Social and political acceptability

Two BP examples:

1) Hydrogen Power

2) Energy Biosciences

Source: IEA WEO 2006

Gas19.60%

Oil6.67%

Hydro16.14%

Biomass1.30%

Other2.13%

Coal39.73%

Nuclear15.74%

Geothermal0.32%

Wind0.47%

Solar0.02%Tidal/Wave

0.01%

electricity generation shares by fuel - 2004

Hydrogen Power Project – California

Rationale for Hydrogen Power

• Power demand will grow strongly (and disproportionately)

• Absent emissions controls, coal will continue to be the dominant source of power for some time

− Abundant reserves, cheap, easy to use, co-located with demand

• Coal is the most emissions-laden of the fossil fuels

• GHG emissions will be priced in the future

• We can reconcile these two through hydrogen power

− Nuclear a competitor on cost and scale

• BP has established a Hydrogen Energy business

The challenges of Hydrogen Power

• Integration and demonstration of above-ground kit at scale

• Integrity of underground storage on a millenial scale

− Depleted reservoirs (with EOR)

− Saline aquifers

• Cost reduction through optimization, scale

− Membranes

• Legal issues

− Monitoring criteria, liability

• Public acceptance

− Storage

− Pipelines

It’s really hard to beat liquid hydrocarbons

Density = 1 gm/cm3

optimizing biofuels requires fusing the petroleum and agricultural value chains

•Species•Yield / Morphology / Development•Chemistry•Unnatural products•Stress tolerance • / Bio-overhead•Safety

•Tillage•Planting•Fertilizer•Water•Pest control•Crop rotation•Sustainability

•Optimal catchment•In-field processing (e.g., pelletizing)•Transport energetics•Storage•Waste utilization

•Cellulose (bugs/ enzymes/ chems)•Microbial engineering •Plant integration / optimization•Co-products•Role of gasification

•Blends•Additives•Distribution•Engine mods

Exploration Production Transport Refining Blending

Petroleum Value Chain:

Germplasm Cultivation Harvest/Transport

Processing A real fuel

Biofuels Value Chain:

Germplasm Cultivation Harvest Process Distribution

Agricultural Value Chain:

the rationale for Energy Biosciences is simple and compelling

• Biology is the most rapidly developing of the sciences

• Novel technologies emerge from rapidly developing science

Biology will generate disruptive technologies

• ~90% of the world’s primary energy is based upon carbon

• All of life is based upon carbon (and 3.5 billion years of evolution)

There are likely to be great synergies

• Major funding and applications of biotech are biomedical

• There have been far smaller investments in agriculture, materials, chemicals

“Energy bioscience” is largely open territory

Biofuels, enhanced oil recovery, conversion, sequestration

BP Energy Biosciences Institute to pursue these opportunities• Dedicated research organization to explore application of

biology and biotechnology to energy issues

• Sited at a University of California – Berkeley, University of Illinois Urbana-Champagne, and Lawrence Berkeley National Laboratory

• Open “basic” and proprietary “applied” research

• Initial focus on the entire biofuels production chain

− Smaller programmes in Oil Recovery, hydrocarbon conversion, carbon sequestration

• Involvement of BP, academia, biotechnology firms, government

• $500M, 10-year commitment; operations began November, 2007

Questions/Comments/Discussion

Energy Trends and Technologies Video at

http://clients.mediaondemand.net/BP/#