Capital Commerce: Alternative energy gets a big backer: BP
Big Oil is betting on some new sources of energy. John Browne, chief executive of oil giant BP, said this week that both security and climate risks had spurred his company's decision to double its investment in alternative energies like solar, wind, and next-generation gas and coal to $8 billion over the next 10 years.
"This is not business as usual. Things have changed," Browne said in remarks at the Brookings Institution. He said some customers want to reduce the risk of dependence on the few countries with vast oil and natural gas resources, while others want to reduce the risk of carbon emissions. And, he added, "technology is making it possible now to supply alternative energy at highly competitive prices."
But Browne said the bulk of the company's investment will be in power generation, not in new fuels for cars and trucks. Technology has not yet advanced enough on alternative transportation fuels like biofuels and hydrogen, he said. "These areas are under debate, and none's quite sure where to go." Although BP plans to continue "a lot of work and a lot of experimentation in this area," it is in power generation that the new technologies are competitive, available today, and could make a large environmental impact. He noted most of the world's carbon emissions are due to power generation rather than transportation.
Although solar and wind traditionally have been a small share of the global energy picture, Browne said that his company estimates there will eventually be a $600 billion market for alternative energy. One element of the company's plan that may soon become familiar to consumers: BP plans a big push to homeowners looking to install solar energy, having joined in a partnership with Home Depot to sell new BP Solar Energy Tile for residential roofing.
"Our aim is not to make a statement or to add further to the policy debate," Browne said. "Our aim as a business is to make money and by giving our customers new choices to make a difference."