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BP StrategyBP Strategy

RecommendationsRecommendations

ShortShort--run and longrun and long--runrun

approaches to a carbonapproaches to a carbon--constrained future.constrained future.

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The Present EnvironmentThe Present Environment

High and increasing demand for oil.High and increasing demand for oil.

Dwindling rates of oil production.Dwindling rates of oil production.

Instability in Middle EastInstability in Middle East IraqIraq

Demand for Energy IndependencyDemand for Energy Independency

Threat ofTerrorismThreat ofTerrorism

Increasing profile of anthropocentricIncreasing profile of anthropocentric

climate change.climate change.

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Recent New York Times Headlines:Recent New York Times Headlines:

Global warming to bring heavier rains, snow,Global warming to bring heavier rains, snow,October 14October 14thth, 2005., 2005.

As Polar Ice Turns to Water, Dreams ofAs Polar Ice Turns to Water, Dreams ofTreasure Abound, October 10Treasure Abound, October 10thth, 2005., 2005.

In a Melting Trend, Less Arctic Ice to GoIn a Melting Trend, Less Arctic Ice to Go

Around, September 29Around, September 29thth, 2005., 2005.

Time to Connect the Dots, September 28Time to Connect the Dots, September 28thth,,2005.2005.

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The Future EnvironmentThe Future Environment

Sharpened salience of global warmingSharpened salience of global warming

issue and demand for carbon abatement.issue and demand for carbon abatement.

Emissions restrictions on COEmissions restrictions on CO22 and capand cap--

andand--trade mechanisms will create valuetrade mechanisms will create valuefor COfor CO2.2.

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StrategyStrategy Increase capacity for producing innovation inIncrease capacity for producing innovation in

energy technologies.energy technologies.

Position to take full advantage of this capacity byPosition to take full advantage of this capacity byactively entering the enhanced oil recoveryactively entering the enhanced oil recovery

(EOR) and carbon capture markets as interim(EOR) and carbon capture markets as interimstrategiesstrategies

Influencing the agenda by manipulating theInfluencing the agenda by manipulating thepace, shape, and direction in which carbonpace, shape, and direction in which carbon

abatement will be pursued in the U.S.abatement will be pursued in the U.S. Focus is on taking profitable actions in the shortFocus is on taking profitable actions in the short--

run which will facilitate a longrun which will facilitate a long--run agenda settingrun agenda settingstrategy.strategy.

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Increase CapacityIncrease Capacity

Heavy investment in R&D.Heavy investment in R&D. TechnologyTechnology

InfrastructureInfrastructure

ProcessesProcesses

Develop and invest in relationships withDevelop and invest in relationships with

key decision makers and players.key decision makers and players.

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StrategyStrategy Increase capacity for producing innovation in

energy technologies.

Position to take full advantage of this capacity byPosition to take full advantage of this capacity byactively entering the enhanced oil recoveryactively entering the enhanced oil recovery

(EOR) and carbon capture markets as interim(EOR) and carbon capture markets as interimstrategiesstrategies

Influencing the agenda by manipulating thepace, shape, and direction in which carbon

abatement will be pursued in the U.S. Focus is on taking profitable actions in the short-

run which will facilitate a long-run agenda settingstrategy.

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PositioningPositioning

Target and acquire mature oil fields in proximityTarget and acquire mature oil fields in proximity

to BP owned point sources of COto BP owned point sources of CO22 in Gulf Coastin Gulf Coast

region ofTexas.region ofTexas.

Pursue federal and state funding for BP ownedPursue federal and state funding for BP owned

COCO22 pipeline and monitoring infrastructure.pipeline and monitoring infrastructure.

Capture COCapture CO22 from point sources and use forfrom point sources and use for

EOR.EOR.

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StrategyStrategy Increase capacity for producing innovation in

energy technologies.

Position to take full advantage of this capacity byactively entering the enhanced oil recovery

(EOR) and carbon capture markets as interimstrategies

Influencing the agenda by manipulating theInfluencing the agenda by manipulating thepace, shape, and direction in which carbonpace, shape, and direction in which carbon

abatement will be pursued in the U.S.abatement will be pursued in the U.S. Focus is on taking profitable actions in the short-

run which will facilitate a long-run agenda settingstrategy.

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COCO22

CapCap--andand--TradeTrade

What is it and how does it work?What is it and how does it work?

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Influencing the AgendaInfluencing the Agenda

Target publicTarget public raise profile of globalraise profile of global

warming.warming.

Provide info to relevant CongressionalProvide info to relevant Congressionalplayers.players.

Invest in relationships with key leaders.Invest in relationships with key leaders.

Establish a PAC to support candidatesEstablish a PAC to support candidates Build alliances with industry partners andBuild alliances with industry partners and

NGOs.NGOs.

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StrategyStrategy Increase capacity for producing innovation in

energy technologies.

Position to take full advantage of this capacity byactively entering the enhanced oil recovery

(EOR) and carbon capture markets as interimstrategies

Influencing the agenda by manipulating thepace, shape, and direction in which carbon

abatement will be pursued in the U.S. Focus is on taking profitable actions in the shortFocus is on taking profitable actions in the short--

run which will facilitate a longrun which will facilitate a long--run agenda settingrun agenda settingstrategy.strategy.

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PlayersPlayers

AlliesAllies Short runShort runMid sized oil companies, chemical plants, refineries.Mid sized oil companies, chemical plants, refineries.

Industry groups like Gulf Coast Carbon CenterIndustry groups like Gulf Coast Carbon Center

NGO alliesNGO allies

Texas public, governor, and many congressional leaders.Texas public, governor, and many congressional leaders.

AlliesAllies Long runLong run

Utilities can be convinced to invest in IGCC, whichUtilities can be convinced to invest in IGCC, whichreduces cost of carbon capture.reduces cost of carbon capture.

Public and increasing number of representatives.Public and increasing number of representatives.

Foreign industrialized countriesForeign industrialized countries

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PlayersPlayers

OpponentsOpponents Short runShort runOlder coalOlder coal--burning utitiesburning utities

Taxpayers in other statesTaxpayers in other states

Pork Barrel alarmists.Pork Barrel alarmists.

OpponentsOpponents Long runLong runOil companies without CO2 transportation capacityOil companies without CO2 transportation capacity

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A final wordA final word

Short term and long term strategies to be keptShort term and long term strategies to be keptseparate:separate:

Public outreach and work with NGOsPublic outreach and work with NGOs High profileHigh profile

EOR and pipeline subsidies, as well as push forEOR and pipeline subsidies, as well as push forcarbon capcarbon cap--andand--tradetrade Low profileLow profile