The energy industry has to be ready to meet a resurgence in demand that will come once the global economy is back on its feet, BP plc CEO Tony Hayward said last week.
Speaking at Cambridge Energy Research Associates’ CERAWeek conference in Houston, Hayward said it was “critical” to look beyond today and to prepare for what is sure to be huge energy demand in the future. The International Energy Agency, he noted, projects that global energy demand will be 40% higher in 2030.
“In the energy industry it’s our responsibility to look through the here and now to the longer term,” Hayward told CERAWeek attendees. “The world economy will recover. The future is not canceled…The challenge for all of us is to not allow this cyclical fall to pitch us into a structural loss in capacity.”
The energy industry has to take a seat at the table to help President Obama’s administration — and other governments around the world — make policy decisions, he said.
“I’m not someone who thinks regulation must always be bad for business,” Hayward said. “Of course, poor regulation can destroy good business practice, but good regulation is the framework that helps a market function…I think we have a great moment here, a real opportunity to work with President Obama and the Congress to craft a comprehensive national energy policy — one that creates jobs, expands and diversifies energy production, generates new government revenues and reduces the impact of energy use on the environment.”
Hayward reminded the crowd that long before many of its peers worked to enact climate change policies, BP was looking “beyond petroleum,” as it said in its advertisements. The London-based major is “doing all it can to continue investing for growth,” including plans to invest on average $6 billion a year in the United States over the coming 10 years.
The BP chief also said new policies have to ensure that technology, efficiency and conservation are top priorities. With that in mind, BP is setting aside $500 million over the next decade dedicated to research and development.
In addition, Hayward said the environment has to be one of the benefactors of new energy.
“We must begin to address the challenge of climate change,” he said. Among other things, Hayward suggested that governments provide “transitional incentives” to deploy large-scale solutions to reduce carbon emissions. Unlike ExxonMobil Corp., which supports a carbon tax, BP is supporting efforts in Congress to enact cap-and-trade legislation.
“The ultimate objective is a global cap-and-trade system, but that’s probably a little way off,” Hayward said. “The best place to start is at the national level…We know the aims — a stable energy supply and a sustainable planet — and we are all signed up to them. In years to come, when we gather for this and similar conventions, I hope we will look back on this one as a turning point.”
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