Decarbonizing Energy: BP's Solar Investment -- One Small Step

The British-based company, BP, has for many years sought to transition from being primarily a producer of oil to a producer of low or zero-carbon energy.

Initially the focus was on increasing the production and distribution of natural gas, a fuel that, on combustion, yields about a third more energy per unit of carbon dioxide emitted than does oil. Furthermore, due to higher plant efficiency, replacement of natural gas for coal in electricity generation lowers by half the amount of carbon emitted per unit of power generated.

In addition, BP has invested in most areas of alternative energy including wind, solar, ethanol, carbon-free hydrogen and landfill methane. Among these investments, the most promising results thus far have been in the field of solar power. Through a 50% stake in Lightsource BP, BP now has a stake in two gigawatts of solar power generating capacity, with something like another half gigawatt to be installed this year -- that's about 5% of the World's total capacity.

A simple way to understand the significance of BP's solar investments is to translate installed solar capacity to power production measured in barrels of oil equivalent. Then the solar power business can be directly compared with BP's original business of oil production.

Although we do not know the power output per unit of installed capacity for Lightsource BP, we know that worldwide, the average year-round electrical energy production per kilowatt of installed solar capacity is around 1200 kilowatt hours. Applying that value to Lightsource BP's plant indicates that electrical production by the end of this year will be at a yearly rate of around 3000 gigawatt hours. One gigawatt hour is equivalent in energy to 588 barrels of oil. Therefore, the solar power generated by BP's share in Lightsource BP amounts to around 1.75 million barrels of oil per year.

How does that compare with BP's oil and gas production?

Its about 12 hours worth.

So, yes, BP is looking in the right direction, but for their solar investments to change the world is gonna take a while.

Climate Panic: Economics, Ignorance and Mental Illness

Speaking at the One Young World conference in London on Wednesday, BP chief executive Bob Dudley said:

“unless you put a price on something, you can’t control how it’s consumed.” He then called for a “united effort to put a price on carbon. “One of the things we talk most about doesn’t have a price,” he said. “There’s got to be a united effort to put a price on carbon, so when you click a switch on the wall for electricity you’re going to pay a higher price.” “Getting a price on carbon,” he said, will “change the (emissions) situation more than ... four-year outlooks from politicians.” The outgoing BP boss noted that while emissions were stagnating in Europe and North America, other parts of the world were falling behind in addressing the climate crisis. “There are big coal-fired power plants opening in other parts of the world” he said “and that’s the epicenter of the problem.”

But carbon taxes are seriously harmful if applied only on a local basis. They handicap local industry by promoting the transfer of carbon-intensive industries to jurisdictions without a carbon tax.

The solution?

A countervailing import tariff on goods and services from jurisdictions without a carbon tax.

In Canada, where the re-elected Liberal Government plans the introduction of a carbon tax, the countervailing duty is absent, which is one reason that Canadian oil and gas companies are moving south of the Canada:US border — to avoid the million dollars in carbon tax on the diesel fuel consumed in drilling a gas or oil well.

The same incentive to off-shore or out-source to carbon-tax-free jurisdictions will undermine the Canadian steel, lumber, mining and manufacturing industries, which are precisely the industries where Canada has comparative advantage relative to her trading partners.

But apparently such simplistic logic is beyond the grasp of our rulers, let alone the majority of the public for whom Climate Panic seems more closely akin to neurotic illness than an environmental  problem requiring a rational solution (cf, E. Michael Jones: The Religion of Greta Thunberg).