Alternative Energy - Hopeful Signs Emerging
Lately I've been reading about companies getting serious about alternatives to oil.
Company I used to work for has a big sugar plantation on Maui. They barely make money at it. Now that oil is priced so high, they are looking into using the sugar cane as a source for ethanol production. Maybe someday we won't have to rely on the middle east for oil.
BP to boost alternative-energy outlay
By ALEX MACDONALD and SPENCER SWARTZ
DOW JONES NEWSWIRES
November 29, 2005; Page D6
LONDON -- BP PLC said it will plow profit from its oil-and-gas business into alternative-energy projects through a new business unit, BP Alternative Energy. BP said it expects to invest as much as $8 billion in alternative-energy projects, including solar, wind, hydrogen and carbon-abatement technology, over 10 years.
The investment represents a fraction of BP's annual $14 billion-to-$16 billion capital-expenditure program, but it marks as much as an eightfold increase from the $1 billion spent over the past decade, Chief Executive John Browne said at a news briefing.
Lord Browne said he expects the unit to achieve a 15% return on capital employed annually by investing in equal proportions in solar, wind, hydrogen and combined-cycle gas-fired power generation.
Equity analyst Jason Kennedy of ING Group welcomed the consolidation of BP's alternative-energy projects into one business unit, but he said he didn't expect the unit to "have a huge impact" on short-term earnings.
BP's solar unit is a critical plank in its alternative-energy business and was profitable for the first time last year, Lord Browne said. The company plans to double its solar capacity from roughly 100 megawatts of capacity in the U.S., Spain, India and Australia.
"It's encouraging to see that they're joining up all the different parts of their renewable business and making it a core focus," said Tony Juniper, chief executive of the environmental organization Friends of the Earth.
But he added that more needs to be done to increase the pace of alternative-energy investment: "They're just making investment in the part that's market-ready," Mr. Juniper said.
Lord Browne said BP was planning a carbon-sequestration project for 2006-07 in which carbon emissions from power plants would be reinjected in fallow offshore gas and oil fields.
Lord Browne said BP looked to hire "several hundred" staff, including engineers, to support its plan for alternative and renewable energy, which is among the biggest by a major oil company.
He added that peak oil production could come in 2020 but said it was difficult to gauge, partly because of the shifting economics of the oil industry.
MinnesotaEats - www.goodfoodmsp.com