Archive for Downsizer For an ethical approach to consumption
 


       Downsizer Forum Index -> Energy Efficiency and Construction/Major Projects
cab

BIG investment in biofuels

Thumping great chunk of money to be invested by BP in biofuels:

http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7018719

Basically they're after getting something major in biobutanol (which offers some distinct advantages over bioethanol and biodiesel) as well as getting a whole load of extra ideas generated.

Of course, while its an astonishing sum of money to be thrown at one institute, and therefore a serious, serious undertaking, its still only approximately nine days of profit for BP.
Penny Outskirts

Re: BIG investment in biofuels

cab wrote:
Of course, while its an astonishing sum of money to be thrown at one institute, and therefore a serious, serious undertaking, its still only approximately nine days of profit for BP.


It is good news that they are trying, but as you say, the figure, as compared to their profits, does put it into perspective a little.

I suppose they really have to do something looking into the future, when there will be diminishing oil supplies. Where will their profits come from then Very Happy
Treacodactyl

Mmmn, so that's about £25m a year from a company that made £11.04bn profit last year? Shockingly small amount of money IMO.
dpack

greenwashing or trying , the debate continues .
Penny Outskirts

dpack wrote:
greenwashing or trying , the debate continues .
I think economic necessity is the more likely motive
Treacodactyl

Penny wrote:
dpack wrote:
greenwashing or trying , the debate continues .
I think economic necessity is the more likely motive


Then why not spend a bit more rather than 0.0000000025% of your annual profit? (Sorry if there are too many or few 0s).
Penny Outskirts

Treacodactyl wrote:
Penny wrote:
dpack wrote:
greenwashing or trying , the debate continues .
I think economic necessity is the more likely motive


Then why not spend a bit more rather than 0.0000000025% of your annual profit? (Sorry if there are too many or few 0s).
Very Happy whatever, it's lots and lots of 0s. I agree, they could do so much more, but it's a start.
dpack

bp's chairman was on the radio a while back ,plausible chap , know them by their deeds not their words .
we will see how this develops but when huge amounts of cash can be made destructivly it will happen ,the arms trade for instance or selling heroin or .....
Treacodactyl

Well at least it's better publicity than some of the recent oil spills in Alaska such as this: http://news.bbc.co.uk/1/hi/business/5057954.stm

Can't help feeling that there's money available to look after such delicate ecosystmes better as well as invest in alternatives.
cab

Far be it from me to be the defender of the petrochemical industry, but this isn't a lone development. BP have also got involved with Du Pont, my understanding (which may be flawed) is that they're making butanol by the old fashioned Clostridium fermentation method, presumably trying to get better yields than used to be the case. Butanol is favoured because you can pump it straight into a car engine; it isn't the mose efficient fuel you can make, it isn't the best way of getting energy out of plant material, but it is a fuel you can pump through your existing pipe infrastructure and sell to motorists.

Make no mistake, petrochemical companies are taking this seriously.
dougal

cab wrote:
... Butanol is favoured because you can pump it straight into a car engine; it isn't the mose efficient fuel you can make, it isn't the best way of getting energy out of plant material, but it is a fuel you can pump through your existing pipe infrastructure and sell to motorists.

Make no mistake, petrochemical companies are taking this seriously.

Seems BP, DuPont and British Sugar are setting up to *manufacture* butanol in 2007.
And that the advantage over ethanol is primarily in energy density.
http://www.autoindustry.co.uk/press_releases/20-06-06

Remember that ethanol (and butanol) are primarily biofuels for petrol engines, while biodiesel suits... diesels!
cab

dougal wrote:

Seems BP, DuPont and British Sugar are setting up to *manufacture* butanol in 2007.
And that the advantage over ethanol is primarily in energy density.
http://www.autoindustry.co.uk/press_releases/20-06-06


That isn't the only advantage. Butanol sops up less water than ethanol does, so you can store it drier. It also works pretty much as is as a petrol substitute

Quote:

Remember that ethanol (and butanol) are primarily biofuels for petrol engines, while biodiesel suits... diesels!


Also true... And they're the fuels that companies will be looking at for the next 10-15 years, so the processes for making them as cleanly and efficiently as possible are going to be big business.

Making butanol by fermentation ain't new, of course, its been around for years; Weizmann did it commercially first, I think (he was making acetone, which you get from the same fermentation). Hasn't been done much in years 'cos its been cheaper to get butanol from oil. Thats all changing now, and theres a lot of catching up to be done in making that process work better. And it ain't just the fermentation process, there'll be a lot of work done in improving crops to turn them into better feestocks, and looking for other ways of getting useful fuel out of them.
MarkS

seems an appropriate amount of money for what they are doing. pointless shoving billions into research without any control. they are setting up an institute to do research - I would expect that further funding would be forthcoming depending on the results of the research.

Be more interesting to have some more details on thje direction of the research.
cab

MarkS wrote:

Be more interesting to have some more details on thje direction of the research.


It would, wouldn't it? But as yet there isn't any real info on that, it'll depend on where it goes.

There's a good bit of work done in the American mid-west, think its Columbia, where they've done a sort of two stage Clostridium fermentation with the first only capable of producing butyric acid and hydrogen, the second converting that to butanol (so you can't get much acetone or ethanol made, which is good), looks like two trickling bed reactors. Nice. I think the smart money is that the research will include crop development (marginal land crops, maximising yield of feedstock, etc.), fermentation research (which will necessarily include some genomics and lots of microbiology and sensors work) and separation technology (its a complex materials problem)... But for half a billion dollars you get a hell of a lot more than that, and its in those more esoteric research proposals that the real excitement will come.
Blue Peter

cab wrote:
I think the smart money is that the research will include crop development (marginal land crops, maximising yield of feedstock, etc.)


What does marginal land mean in this case?


Peter.
cab

Blue Peter wrote:

What does marginal land mean in this case?


I believe they mean land on which it isn't possible to produce food crops.
Northern_Lad

cab wrote:
Blue Peter wrote:

What does marginal land mean in this case?


I believe they mean land on which it isn't possible to produce food crops.


Usually either too wet or too dry; due to the ever expanding Sahara these marginal lands are getting bigger.
Andy B

Blue Peter wrote:
cab wrote:
I think the smart money is that the research will include crop development (marginal land crops, maximising yield of feedstock, etc.)


What does marginal land mean in this case?


Peter.


Somebody elses!!
Blue Peter

Northern_Lad wrote:
cab wrote:
Blue Peter wrote:

What does marginal land mean in this case?


I believe they mean land on which it isn't possible to produce food crops.


Usually either too wet or too dry; due to the ever expanding Sahara these marginal lands are getting bigger.


I ask because I'm rather suspicious of biofuels, because I think that they raise the spectre of food versus fuel. In general, the amount of energy you get out of biofuels compared to the amount you put in is quite low (some people claim/believe that, at least in certain cases, you get out less than you put in).

For economic reasons, I suspect that any biofuels cropping on a reasonable scale, has to use big machinery, and I wonder how compatible that is with marginal lands? Too wet doesn't sound good, and too dry raises the problem of exacerbating water shortages. I wonder if there won't be pressure to move from marginal to more machine friendly land?


Peter.
cab

Blue Peter wrote:

I ask because I'm rather suspicious of biofuels, because I think that they raise the spectre of food versus fuel. In general, the amount of energy you get out of biofuels compared to the amount you put in is quite low (some people claim/believe that, at least in certain cases, you get out less than you put in).


Theres an argument that really intensive agriculture followed by conversion to a biofuel is not even carbon neutral. But thats part of what BP are asking to be looked at (thats my reading of it).

Quote:
For economic reasons, I suspect that any biofuels cropping on a reasonable scale, has to use big machinery, and I wonder how compatible that is with marginal lands? Too wet doesn't sound good, and too dry raises the problem of exacerbating water shortages. I wonder if there won't be pressure to move from marginal to more machine friendly land?


All things that you'd be looking for the new institute to look at, imho.
Treacodactyl

Blue Peter wrote:
I ask because I'm rather suspicious of biofuels, because I think that they raise the spectre of food versus fuel. In general, the amount of energy you get out of biofuels compared to the amount you put in is quite low (some people claim/believe that, at least in certain cases, you get out less than you put in).


Same here. I'm also not too sure of a company that has huge reserves of oil being responsible for developing alternatives. Is it in their interest to bring these fuels to market ASAP?

If you spent $500 million could you not develop food crops that grow in the marginal land?

On a different note, I was looking at grain fed stoves yesterday. Apparently poor quality grain can be much cheaper than most other fuelds and there are special boilers to burn them.
Andy B

there isnt much unused space in the first world ! I cant see anyone wanting to grow this stuff in any unstable third world type place.
cab

Treacodactyl wrote:

Same here. I'm also not too sure of a company that has huge reserves of oil being responsible for developing alternatives. Is it in their interest to bring these fuels to market ASAP?


What Dougal said. BP are bringing biobutanol to market imminently. Theres demand, so theres profit, so theres a will to make the profit. BP can distribute it via the network they already have, so it fits well for them.

Quote:

If you spent $500 million could you not develop food crops that grow in the marginal land?


Probably. Dunno what BP would be doing that for though, it isn't thier business.
Blue Peter

cab wrote:
Probably. Dunno what BP would be doing that for though, it isn't thier business.


This is something I saw on the George Monbiot mailing list, but here about bioethanol:

Quote:

For our 8-county area around Black Hawk County, we have about 8,500 farmers who mostly raise corn and beans and some livestock. On the average, from 1999 to 2003, these farms sold $1.08 billion worth of crops every year. But, they spent $1.14 billion every year to produce it. A loss of $62 million, /every year/, from 1999-2003. Most other counties in Iowa are doing worse, even as we see images of record harvest, etc.

During the same period, our 8-county area farms received $173 million per year in federal government crop subsidies for corn and beans. It is a long story, but by every measure rural communities are declining and these huge subsidies have not helped, because these are not community-building subsidies, these are commodity-exporting subsidies for two specific crops.

Commodity agriculture is acre-based. It requires acres, grain elevators, fuels and chemicals. A gas station and a bar are what is left in many rural towns. But a human community requires churches, schools, health clinics and civic organizations which are all people-based, and "modern agriculture" has no place for them. Most of the subsidies end up in more seeds, chemicals, machinery from the same companies that these farms sell their crops to. A sort of company town with its token currency. And not surprisingly, these companies heavily shape the federal farm policies that bring them the wealth. This is not something grain farmers alone can change. They are simply trying to make a living in an unfair system they have little control over.

In addition to this economy of loss, we are seeing soil loss and degradation as a result of harsh farming practices encouraged by federal crop subsidies. We are seeing corn fertilizer and corn pesticides in our drinking waters.

Now, to top it off, there is a bi-partisan rush by state legislators to make the matter worse: let's subsidize ethanol even more. And here is the four headed monster: a quadruple gravy train of ethanol subsidies. First, you have the huge federal corn subsidies that mask an economy of loss I described above. Then you have the federal ethanol subsidies to makers of ethanol. The third head of the monster is all the tax dollars Iowa Department of Economic Development is handing out to build the ethanol plants. The forth head is the one that makes ethanol blend cheaper at the gas station--state subsidies to ethanol retailers.

It would be very interesting to add up the total annual subsidies our state and federal governments provide to make corn ethanol cheap, and then to think how better we could have spent it towards revitalizing our rural communities. And now the multinational grain merchants want the tax payers to pay for an ethanol pump at every gas station. A pump that, to me, signifies the monster is winning. A pump that really reflects the soil-eroding, nitrate-leaking, money-losing, community-ruining "farm" policies of the last 50 years.

I have not even mentioned that by some analysis ethanol is a net energy loser. Even by promoters' most optimistic analysis, it barely makes enough energy to make up for all the fossil energy burned to produce it. Meanwhile farmers pay for high fuel and energy costs on the farm!

The fields are farmed for an export economy shaped by crop subsidies and unfair prices set by distant corporations. With a sea of cheapened corn, cheapened ethanol fits well into this picture. But things do not have to be this way. We should not have to go down this road further. We can create a more enduring food, agriculture and energy economy for our region. I will suggest alternative policies and practices that deal with the two claims of ethanol promoters-- "helping the farmer" and producing significant energy from farms.

Let's look at what we have going for us: knowledgeable, skilled farmers, the best soils in the world, community-minded people, sunshine and excellent rainfall. How can we guard these assets and build on them?

First, we already know how to farm without damaging the soil or polluting our waters. Raising grain crops in 4 or 5 year crop rotation and grass-based livestock production has numerous benefits: less purchased inputs, less fuel, less or no pesticides, better soils, better yields, more resistant to pest and disease, better water quality, and better income. Numerous farmers all over the nation are demonstrating these by living it. Iowa State University research has proved it. There is solid data here to create good public policy.

In other words, we already know how to farm so that agriculture will not be a threat to soils and water. Yet, none of these well-proven practices are encouraged by current crop subsidies, except the Conservation Security Program which has been on the chopping block.

In a smart and inspiring move, Woodbury County, Iowa, beginning in 2006, offers its own tax rebate program for farms which diversify into 4-year crop rotation and organic production as an economic development strategy. The first county in the nation to enact local farm policies that treat agricultural land as wealth-generating rather than money-losing.

Another much needed strategy is to expand local/regional markets for local farmproducts. Farmers I know do not want favors, just fair markets. We know people of our region spend more than $500 million on food every year and we need to develop new markets, processing and distribution infrastructure to capture this huge leak of financial capital. This would reconnect our plate to their fields, our grocery expenditures to their livelihood.

Now imagine if only $1 million per year of that $173 million crop subsidy for our 8-county area were invested in strengthening of the local and regional food economy of our region. We would see more truck farms, more orchards, more canneries and creameries, more bakeries, more processing facilities, all meeting primarily local/regional food needs. We have lots of work to do to accomplish these.

Why are the state and local officials not investing in the above strategies "to help the farmer"? Why are they stuck on corn and "pharm" crops neither of which are doing any good for us? Well, you should ask them.

And in terms of farms being a source of energy generation, yes, it is critical that farms produce most of their own energy needs and perhaps some for the immediate local area (electricity from wind and sun, wood and other biomass for heat, etc.) We need programs that assist farms to make a transition in that direction and in strong energy conservation.

But to say that our farmlands will provide endless supply of energy for our wasteful driving habit is simply not possible. There is nothing "renewable" about it. It will take us back to more of what we already have--soil degradation, corn weed killers and nitrate in our waters. Our elected officials owe it to us to be smarter, see a broader picture, and not fall for the pie-in-the-sky "bio-fuels," ignoring all that we already know.

Sorry for such a lengthy response.

Kamyar EnshayanAgricultural engineer




It doesn't fill me with hope,


Peter.
cab

Thats precisely why the fuel companies want to move away from growing grains to make ethanol. Make no mistake, the decision to fund bioethanol production in the US has been a political one set up to support farmers; keep your eye out for more such announcements in the run up to elections over there.
Nick

Andy B wrote:
there isnt much unused space in the first world ! I cant see anyone wanting to grow this stuff in any unstable third world type place.


And how much of our oil and gas currently comes from stable places? Middle East, Eastern Soviet states, etc?
Nick

I wonder if anyone's looking at growing stuff in the sea. We're continually hearing about massive blooms of algae, and the like, and we have far more sea than farm land.
tahir

nickhowe wrote:
I wonder if anyone's looking at growing stuff in the sea. We're continually hearing about massive blooms of algae, and the like, and we have far more sea than farm land.


It could be used in conjunction with largescale mid ocean fish farming, something that's being talked about seriously in the US. At the moment huge areas of the ocean bear very little fish life because there isn't an adequate nutrient supply, the idea is to increase nutrient supply to encourage microorganisms which can then be used to feed fish....

Not entirely sure I like the sound of it though.
Shane

Treacodactyl wrote:
I'm also not too sure of a company that has huge reserves of oil being responsible for developing alternatives. Is it in their interest to bring these fuels to market ASAP?

As we saw when Shell were forced to admit that their reserves weren't as extensive as they had thought, the share price of the oil companies is strongly linked to their reserves. We are rapidly reaching the point where reserves will start to fall every year. There is an enormous amount of activity in trying to secure new reserves at the moment - the rental price of drilling rigs has gone up fourfold in the last few months, for example.

The oil companies know that as soon as their reserves go into decline, their business will become less attractive to investors. That is more than enough reason for them to be making serious efforts to add alternative fuels to their portfolios.
dougal

nickhowe wrote:
I wonder if anyone's looking at growing stuff in the sea. We're continually hearing about massive blooms of algae, and the like, and we have far more sea than farm land.

Its a strangely senior moment to realise that you know something or other about that, but you can't remember what, other than that it involved the Japanese and kin' eeenormous nets... anyway, here it is, from May 05:
http://www.timesonline.co.uk/article/0,,3-1611170,00.html

Cool
Treacodactyl

Shane wrote:
As we saw when Shell were forced to admit that their reserves weren't as extensive as they had thought, the share price of the oil companies is strongly linked to their reserves. We are rapidly reaching the point where reserves will start to fall every year. There is an enormous amount of activity in trying to secure new reserves at the moment - the rental price of drilling rigs has gone up fourfold in the last few months, for example.

The oil companies know that as soon as their reserves go into decline, their business will become less attractive to investors. That is more than enough reason for them to be making serious efforts to add alternative fuels to their portfolios.


As you say, the reserves are linked to share price and I think companies such as BP either have reserves or a reasonable idea of where the oil will come from for a number of years yet. It is in BPs interest to safeguard these reserves so I would question if they are the best company for everyone to trust to invest in alternative fuels or at least bring them to market as quick as possible. Wouldn't this devalue their traditional reserves? From BPs point of view it's certainly wise investigate the technology but then ensure it doesn't devalue you other business areas so bring the products to market when your are ready. Compared to the billions spent on oil exploration each year the money spent investing in alternatives is tiny.
cab

Treacodactyl wrote:

As you say, the reserves are linked to share price and I think companies such as BP either have reserves or a reasonable idea of where the oil will come from for a number of years yet. It is in BPs interest to safeguard these reserves so I would question if they are the best company for everyone to trust to invest in alternative fuels or at least bring them to market as quick as possible. Wouldn't this devalue their traditional reserves? From BPs point of view it's certainly wise investigate the technology but then ensure it doesn't devalue you other business areas so bring the products to market when your are ready. Compared to the billions spent on oil exploration each year the money spent investing in alternatives is tiny.


I don't think anyone is suggesting that no one but BP should be doing this kind of research. But I think you're understating BP's commitment here, they're looking to get biobitanol on the market in the UK not at some distant point in the future but next year. This isn't as big as their petrochemicals work, but then it isn't their core business.

I don't see anyone but the petrochemical companies investing heavily in technology to replace petrol. Who else is going to pay for it?
Nick

Car manufacturers, but, aside from them, yes, it'll be BP, Shell, Exxon, et al.
Andy B

nickhowe wrote:
Andy B wrote:
there isnt much unused space in the first world ! I cant see anyone wanting to grow this stuff in any unstable third world type place.


And how much of our oil and gas currently comes from stable places? Middle East, Eastern Soviet states, etc?


Well thats my point, where there is space there is also instability. i cant see companies / governments wanting to do that. Regional dependancy, not good.
Blue Peter

Treacodactyl wrote:
As you say, the reserves are linked to share price and I think companies such as BP either have reserves or a reasonable idea of where the oil will come from for a number of years yet. It is in BPs interest to safeguard these reserves so I would question if they are the best company for everyone to trust to invest in alternative fuels or at least bring them to market as quick as possible. Wouldn't this devalue their traditional reserves? From BPs point of view it's certainly wise investigate the technology but then ensure it doesn't devalue you other business areas so bring the products to market when your are ready. Compared to the billions spent on oil exploration each year the money spent investing in alternatives is tiny.


Reserves are just whatever oil BP believes/knows it can pump, i.e. they are using their reserves all the time. The trick for an oil company, is to try to find as much (or even more) oil in a year than they pump. I understand that currently a good way for an oil company to increase its reserves is to buy another oil company.

More generally (non-national oil companies only account for about 12% of oil, I believe), I think that we are using approximately 2 - 4 times more oil in a year than we are discovering.

If biofuels were a serious competitor to oil (as say oil was to coal), then there might be a worry about BP's interests in this area. But as I said above, biofuels are of questionable energy efficiency, and the amount of biofuels that could be produced is miniscule compared to the amount of oil that's around (oil is a bit like millions of years of biofuels compressed into a nice bubble). I expect that there will be a bit of profit and lots of subsidies for biofuels in the future, and BP has to do somehting with all the money which it's making,


Peter.
cab

Andy B wrote:

Well thats my point, where there is space there is also instability. i cant see companies / governments wanting to do that. Regional dependancy, not good.


We also produce a fairly whopping agricultural surplus in the developed world. A good solution is to start growing low environmental impact perennial biofuel crops.
cab

Blue Peter wrote:

If biofuels were a serious competitor to oil (as say oil was to coal), then there might be a worry about BP's interests in this area. But as I said above, biofuels are of questionable energy efficiency,


You can make a strong argument for bioethanol produced from, say, intensively farmed wheat being that ineffcient. I think you'd struggle to find the same fault with biobutanol.

Quote:

and the amount of biofuels that could be produced is miniscule compared to the amount of oil that's around (oil is a bit like millions of years of biofuels compressed into a nice bubble).


Thats the key problem. Biofuels, for transport, have a contribution to make. But we can't view them as a panacea, we've simply got to stop burning so much fuel.

Quote:

I expect that there will be a bit of profit and lots of subsidies for biofuels in the future, and BP has to do somehting with all the money which it's making,


I'm just not that cynical about it. Actually that isn't true, I'm just as cynical about it, but I think that your cynicism is ever so slightly misdirected Wink
Blue Peter

cab wrote:

You can make a strong argument for bioethanol produced from, say, intensively farmed wheat being that ineffcient. I think you'd struggle to find the same fault with biobutanol.

Yes, I don't really know what the energy return on energy investment (EROEI) for biobutanol is. Any idea?
Quote:


I'm just not that cynical about it. Actually that isn't true, I'm just as cynical about it, but I think that your cynicism is ever so slightly misdirected Wink


Where did I ought to be directing my cynicism then?


Peter.
Blue Peter

cab wrote:

We also produce a fairly whopping agricultural surplus in the developed world. A good solution is to start growing low environmental impact perennial biofuel crops.


I believe that that's declining though, or at least the world's grain reserves have bene falling pretty steadily for the last 5 (?) years?

And, isn't the problem not so much the crops as the area and approach which has to be taken to get anything worthwhile out? You can't make an impact on fuel use in a low impact way,


Peter.
Nick

cab wrote:
Blue Peter wrote:

If biofuels were a serious competitor
I expect that there will be a bit of profit and lots of subsidies for biofuels in the future, and BP has to do somehting with all the money which it's making,


I'm just not that cynical about it. Actually that isn't true, I'm just as cynical about it, but I think that your cynicism is ever so slightly misdirected Wink


Any money they spend on research (into anything) is no longer a profit, so they'll save on their tax bills, too. You're right to be cynical, but we need alternatives to oil, and BP are best placed and best motivated to do it. And, happily, they also have more cash than crude.
Shane

Treacodactyl wrote:
As you say, the reserves are linked to share price and I think companies such as BP either have reserves or a reasonable idea of where the oil will come from for a number of years yet. It is in BPs interest to safeguard these reserves so I would question if they are the best company for everyone to trust to invest in alternative fuels or at least bring them to market as quick as possible.

Which is why they know that the amount of oil they can expect to extract, say, 10 years from now, is less than the amount of oil they can extract today. They have to make up that potential lost revenue, otherwise their share price will suffer.

No oil company wants to safeguard their reserves - the price of oil is at a record high. What they want to do is recover all of their reserves as quickly as possible while the oil price remains high (nobody knows what's going to happen to it long term - indeed, the chairman of BP is of the opinion that long term prices will drop back toward $25/bbl), whilst making enough new discoveries or acquisitions to replace those reserves.

Treacodactyl wrote:
Wouldn't this devalue their traditional reserves?

Unlikely with the current supply vs. demand. Maybe you'd knock it down from $75/bbl to $70 bbl. Big deal - they'd still be coining it in.

Treacodactyl wrote:
Compared to the billions spent on oil exploration each year the money spent investing in alternatives is tiny.

That's because they know that if they make a decent sized discover they can get the oil to an exisiting market in x number of years using proven technology. If the "tiny" amount of money they are spending on investigating the alternatives throws up any hopeful leads, they'll throw whatever money they need to at it to either discount the potential or turn it into a marketable proposition.
Treacodactyl

Shane wrote:
No oil company wants to safeguard their reserves - the price of oil is at a record high. What they want to do is recover all of their reserves as quickly as possible while the oil price remains high (nobody knows what's going to happen to it long term - indeed, the chairman of BP is of the opinion that long term prices will drop back toward $25/bbl), whilst making enough new discoveries or acquisitions to replace those reserves.


As the reserves run down the price will go up, especially if there's nothing to replace the oil. IIRC the bulk of BPs profits comes from selling oil out of the ground rather than fuels. It'll be interesting to see how they plan to make such large profits from biofuels.

Shane wrote:
Treacodactyl wrote:
Wouldn't this devalue their traditional reserves?

Unlikely with the current supply vs. demand. Maybe you'd knock it down from $75/bbl to $70 bbl. Big deal - they'd still be coining it in.


Such a price move does affect their share price by a fair bit.

But I admit we are all mostly guessing, time will tell. I think I'll rely on the biodiesel / plain veg oil route and grow the oil crops myself.
cab

Blue Peter wrote:

Yes, I don't really know what the energy return on energy investment (EROEI) for biobutanol is. Any idea?


Much higher (hence its considered a serious contender for the next generation biofuel), but I don't have the figures to hand.

Quote:

Where did I ought to be directing my cynicism then?


I would be asking why BP is outsourcing this rather than doing it in-house.
cab

Blue Peter wrote:

I believe that that's declining though, or at least the world's grain reserves have bene falling pretty steadily for the last 5 (?) years?

And, isn't the problem not so much the crops as the area and approach which has to be taken to get anything worthwhile out? You can't make an impact on fuel use in a low impact way,


It all depends on what proportion of fuel burned for transport is biofuel and what you convert; look at the BP/Dupont linkup, based on sugar beet.

The challenge is to come up with an approach to get the right crop grown in the right place in sufficient quantity such that the right fermentation processes can be used to turn it into fuel. It would be futile to have to start again from first principles in every part of the world, which means that the developed processes need to have some flexibility... Now there are ways you could tackle that problem, but it ain't simple.
Nick

cab wrote:


I would be asking why BP is outsourcing this rather than doing it in-house.


That's easy. Same reason many companies use Universities to use their facilities.
1. Matched funding. It'll be cheaper, because the Uni or government will often match BPs funding, meaning their buck goes further.
2. They will be able to hire facilities that already exist, and don't have to start from scratch. This includes stuff they'll need for the length of projects, but not forever. It's technical stuff like mass specs, but also dull stuff, like the buildings and land.
3. Same story for the staff. They can use some BP brains, but many of the best brains are in the Universities. Also, they'll remain university staff, so it's easier on pensions, sick pay, etc etc.
4. There are tax breaks for investing with Academia. Again, more bang for your buck.

Industry investing in Universities is good for both in the long run. Of course, there are dangers that the science will become guided too far along BPs lines, and not enough Proper University Research will go on, but there's a balance in everything. Many of our Unis are heavily dependant on industrial funding; Nottingham, for example, would pretty much close huge chunks of its biology and chemistry if it wasn't for Mars and Boots.
       Downsizer Forum Index -> Energy Efficiency and Construction/Major Projects
Page 1 of 1
Home Home Home Home Home