energy, biotechnology & biofuels

Renewable Resources & Biorefineries Conference, Justin Adams, BP plc. 7th September 2006

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presentation overview

• drivers of the energy future

• potential of energy biotechnology

• biofuels - beyond petroleum & beyond the hype

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key drivers of the energy future

Innovation

Demand Growth

• population• GDP growth• urbanisation• demand mgmt.

Security of Supply

• import dependence• resource competition

Environmental Constraints

• local pollution• climate change

Supply Challenges

• significant resources• new frontiers• non-conventionals

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rapid demand growth projected for all sectors

0

10

20

30

40

50

60

70

80

90

100

110

120

130

1971 2002 2030

Global Energy Demand Growth by Sector (1971-2030)

Ene

rgy

Dem

and

(bnb

oe)

Key: - industry- transport - power - buildings

Source: IEA WEO 2004

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substantial global fossil resources

0

1,000

2,000

3,000

4,000

5,000

6,000

Oil Gas Coal

R/P Ratio 41 yrs.

R/P Ratio 67 yrs.

R/P Ratio 164 yrs.

Proven Proven

ProvenYet to Find

Yet to Find

Yet to Find

Unconventional

Unconventional

Res

erve

s &

Res

ourc

es (b

nboe

)

Source: World Energy Assessment 2001, IHS, WoodMackenzie, BP Stat Review 2005, BP estimates

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first key challenge: dislocation of supply & demand (security)

0

20

40

60

80

100

Regional Share of 2004 Consumption vs Reserves

- Rest of World- 3 largest energy markets (N. America, Europe and Asia Pacific)Key:

Oil

77%

10%

Consumption Reserves

Gas

60%

15%

Consumption Reserves

Coal

87%

64%

Consumption Reserves

Source: BP Statistical Review 2005 Note: oil reserve figures do not include unconventional reserves estimates

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second key challenge: growing concern about carbon emissions (climate)

Rising CO2 concentrations Rising Global Temperatures

Source: IPCCSource: IPCC

• 2001 IPCC report indicates evidence of link between rising temperatures and increasing CO2 concentrations is strengthening

• Transportation is only ~21% of global CO2 emissions (31% in US) but rising most rapidly

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presentation overview

• drivers of the energy future

• potential of energy biotechnology

• biofuels - beyond petroleum & beyond the hype

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the rationale for energy biotechnologyis simple and compelling

• Novel technologies emerge from rapidly developing science

• Biology is the most rapidly developing of the sciences

Biology will generate disruptive technologies

• 85% of the world’s energy is based upon carbon

• All of life is based upon carbon (and 4.5 billion years of evolution)

There are likely to be great synergies

• Major funding and applications of biotech are biomedical

• Much smaller investments in agriculture, materials, chemicals

“Energy bioscience” is just starting

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nature has already designed multiple solutions to meet our energy challenges

Thalassiosira pseudonana Microbulbifer 2-40 Methanococcus jannaschii

Biomass conversionMethane productionOcean carbon pumping

Rhodopseudomonas palustris Deinococcus radiodurans

Radiation resistance -bioremediation

Hydrogen production / Carbon sequestration Source: DOE

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potential applications of energy biotech

Bio-plastics Hydrogen Production Enhanced Oil Recovery Carbon Sequestration

Bio-remediation Coal Bed Methane De-sulphuirsation Biofuels

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presentation overview

• drivers of the energy future

• potential of energy biotechnology

• biofuels - beyond petroleum & beyond the hype

13

transportation sector - overview

• Transportation accounts for ~55% of oil demand and 61% of projected incremental growth

• Oil accounts for 97-98% of primary energy demand for transport

• Significant quantities of oil in short to medium term

• Key challenge is increasing concentration of conventional oil in OPEC

Global Oil Demand by End-Use Oil Imports from Persian Gulf

Source: EIA IEO (2005)

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technology options for transportation

transport sectorCarbon Free

H2 for Transport

Arctic

Con

cern

ove

r Fut

ure

Ava

ilabi

lity

of O

il an

d G

as

High

HighLow

Low

Adv.Biofuels

CTL

GTL

Heavy Oil

EnhancedRecovery

Ultra Deep Water

Capture & Storage

CNG

HybridsC&S

Vehicle Efficiency (e.g. light weighting)

- supply side options

- demand side options

Key:Dieselisation

Conv.Biofuels

C&S

Concern relating to Threat of Climate Change

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biofuels today

• Biofuels have potential to address both security and climate concerns

• Currently 2% of transportation pool but growing

• Offers advantages of using same infrastructure

• Based on food crops

• Sub-optimal fuel molecules

Flex Fuel Offers in Brazil

Food Crops for Energy

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key questions

• Cost− biofuel production (beyond subsidies?)

− infrastructure & vehicle costs

• Materiality − is there sufficient land?

− competition with food?

• Environmental sustainability − field to tank CO2 emissions?

− agricultural practice – water, nitrogen etc.

• Energy balance− more energy in than out – depends on system boundary

− 22x multiplier on petroleum

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biofuels tomorrow

High Yield Energy Crops

Technology advances will enable:

• Use of low cost and abundant biomass – route to materiality

• Cost effective conversion of ligno-cellulosic materials

• Improved environmental benefits

• Better fuel molecules

Ligno-cellulosic Technologies

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materiality….sources of carbon

0

100

200

300

400

500

600

700

Petrol

Diesel

Other petro

leumNGLsCoal

Natural gas

Biomass t

oday

Biomass p

otentia

l

Corn SoyWhea

tCotto

n

Edible fat

s/oils

Meat/P

oultry

Paper

Woodpulp

MSWTire

sA

nnua

l US

Car

bon

(Mt C

)

Fossil Biomass Agriculture Human

to 1000

15 % of fuel

Fuel

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conversion of ligno-cellulosic materials

3.75

2.48

2.89

0.901.14

0.84

2.79

1.030.91

1.20

0

0.5

1

1.5

2

2.5

3

3.5

4

etha

nol p

rodu

ctio

n co

st ($

/gal

lon)

EU Sugar Beet

Brazilian Sugar Cane

US Corn

US Switchgrass

Ligno-cellulosic Fermentation

Conventional Fermentation

US Corn Stover

Key:

Base case

10 year plausible technology stretch

Technologies needed:• energy crops

• pre-treatment technologies

• enzymatic hydrolysis

• C5/C6 fermentation

• alternative molecules

Source: BP Analysis, NREL

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better fuel molecules

• Biobutanol has a number of attractive properties:

− Easily blended into gasoline

− Can use existing fuel infrastructure without major modification

− Potential to be used at higher blend concentrations than ethanol in unmodified vehicles

− An energy content closer to that of gasoline than ethanol – reducing the impact on fuel economy for the consumer

• Biobutanol is complementary to ethanol:

− Can be used together with ethanol

− It can enhance the performance of ethanol blends in gasoline

BP Biofuels a growing alternative

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biology will enable in the C21st what chemistry did in the C20th

Exploration Production Transport Refining Blending

Petroleum Value Chain:

Germplasm Cultivation Harvest/Transport

Processing A real fuel

Biofuels Value Chain:

•Cellulose (bugs/enzymes/ chems)

•Microbial engineering •Distribution•Plant integration

/ optimization•Co-products•Role of gasification

•Blends•Additives

•Engine mods•Chemicals etc.

•Optimal catchment•In-field processing(e.g., pelletizing)

•Transport energetics•Storage•Waste utilization

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

•Species•Yield / Morphology

/ Development•Chemistry•Unnatural products•Stress tolerance

/ Bio-overhead•Safety

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