Case Study:
Energy Security
v. Energy
Independence
Alexandra Thompson --- alex5580@hotmail.com
Joel Eagle --- jdeagle@hotmail.com
-------------------------------------------------------Energy Law, Spring 2007
Chicago-Kent College of Law
On Energy Independence…
“At ConocoPhillips, we don’t believe that
Energy Independence is practical, possible,
or achievable. We need more research in all
forms of potential energy. And we need to
protect the environment in all we do.”
--John Lowe, Executive Vice President of Commercial
…Why?
“You can’t use a quarter [of the energy supply]
but only have 3% of it here. So I just answered
why we are in Saudi Arabia, why we are in
Venezuela, why we are in Russia. Why are we
out in all of these far-reaching places in the
world? We’re trying to find oil, that’s why. We’re
a country that consumes huge quantities of
energy.”
-- Jim Gallogy, Executive VP, Refining, Marketing, and Transportation,
ConocoPhillips
Consistent Theme
U.S “Addicted to Oil”

George W. Bush, 2007 State
of the Union Address

“For too long, our Nation has
been dependent on oil.
America’s dependence
leaves more vulnerable to
hostile regimes and to
terrorists, who could cause
huge disruptions of oil
shipments, raise the price of
oil, and do great harm to our
economy.”
Dependence on Foreign Oil




U.S. imports roughly 60% of energy–liquids,
oils and refinery product–and rising
U.S. – 4% of world’s population, consumes
25% of world’s energy
Independent companies own only 6-7% of
world reserves
93-94% owned by government controlled
companies or governments themselves.
Imports, Demand and Oil Price
DEMAND VARIES LITTLE WITH PRICE
 According to the Oct. 2006 Report of the
Council on Foreign Affairs:
–
–
If imports decrease and demand decreases,
prices may go down
But if imports decrease and demand remains
high, prices will increase and consumers will be
forced to seek higher-priced substitutes
World Energy Demand
Three-fold increase in consumption:
 As worldwide population grows, oil
consumption expected to increase from 85
million barrels/day to 250 million barrels/day
by 2030.
Energy Independence v. Energy
Security


Independence: U.S. could supply all the
country’s energy needs without relying on
foreign energy sources.
Security: U.S. could provide the country’s
energy needs through a variety of energy
sources both domestically and internationally.
How to Reduce
Energy Dependence

“If the goal is reducing dependence on Middle
Eastern oil, the public must be willing to make
dramatic changes:
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–
–
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Ethanol and biodiesel production
Reduction in usage
Research into new technologies
Realism
“The choices we’re making today are not leading to energy
independence” -- Lou Burke, ConocoPhillips
Introduction to ConocoPhillips
The company which would eventually be known
as Conoco was founded in 1875 as the
Continental Oil and Transportation Co. by Isaac
Elder Blake.
Introduction to ConocoPhillips

Blake and his company became one of the first
petroleum marketers in the West.

Blake thought that if kerosene was imported from
eastern refineries by railroad and sold in bulk in the
West, prices would drop and demand would rise.
Many western pioneers were still using candles and
whale oil to light their homes at that time.

The company also sold
candles and wax.
Introduction to ConocoPhillips
From 1885-1913 Standard Oil controlled
Continental
Introduction to ConocoPhillips
Continental built the West’s first filling
station in 1909
Continental was top marketer of
petroleum products in the Rocky
Mountain region
In the next 20 years, Continental
built 1000 more service stations
in 15 states
Introduction to ConocoPhillips
–
–
In 1929 Continental Oil merged with Marland
Oil, a petroleum company started in 1911 by
E.W. Marland in Ponca City, OK.
Marland had access to a steady supply of crude
and was an innovator of drilling techniques.
Introduction to ConocoPhillips
–
–
New company was named Continental Oil
Company and it owned 3,000 wells and
thousands of retail outlets spread over 30 states.
The company first began trading on the NYSE in
September, 1929.
Introduction to ConocoPhillips
On September 30, 1981 Conoco became a wholly
owned subsidiary of DuPont, when 100% of its
shares were purchased in the largest merger in U.S.
history at that time.
On October 22, 1998 Conoco split from DuPont and had
the largest IPO in history at that time of $4.4 billion.
Introduction to ConocoPhillips

1905 - Phillips brothers hit the first of 81 wells
in a row.

1917 – Phillips Petroleum Company was
founded.

1927 – Phillips begins marketing
gasoline through service stations.
Introduction to ConocoPhillips

1931 – Phillips builds the first
long-distance multi-product
pipeline.

1951 – Phillips invents
polypropylene plastics.

2001 – Phillips acquires
Tosco Corporation.
Introduction to ConocoPhillips
ConocoPhillips was formed on August 30, 2002
by the merger of Conoco, Inc. and Phillips
Petroleum Company of Oklahoma.
Introduction to ConocoPhillips
Today ConocoPhillips has its headquarters in
Houston, Texas and operates in more than 40
countries.
The company has approx. 38,400 employees
worldwide and assets of $183.7B.
Introduction to ConocoPhillips
–
Third largest integrated energy company in the U.S.
based on market capitalization, oil and gas proved
reserves and production.
–
Second largest refiner in the U.S.
–
Has the sixth largest total of proved reserves worldwide of
nongovernment- controlled companies.
–
Fifth largest refiner based on crude oil capacity
worldwide.
Introduction to ConocoPhillips
–
4 Core activities worldwide

Petroleum exploration and production

Petroleum refining, marketing, supply and
transportation

Natural gas gathering, processing and marketing

Chemicals and plastics production and distribution
Introduction to ConocoPhillips
–
Investing in 4 emerging businesses

Technology solutions

Carbons-to-liquids

Power generation

Alternative energy and programs
ConocoPhillips-Sponsored
Conversations on Energy
–
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ConocoPhillips 35 city tour
Town Hall meetings & community events
COP representatives, state & local governments,
business and industry, and interested citizens
PURPOSE: Engage communities, invite questions
and comments, and discuss alternative energy
sources.
Main Themes of Conversations
1.
Poor Communication in Oil Industry
2.
Low Credibility in Oil Industry
3.
4 Steps to Energy Security
4.
Need for Education
1. Poor Industry Communication



ConocoPhillips reaching out – overcoming oil
company’s historically poor communication
Jim Mulva, CEO: “Our industry, and our company,
have not done an acceptable job of reaching out to
public and the American consumer.”
John Lowe, Executive VP of Commercial: “Our
industry has lost touch with public. We’re viewed as
part of the problem. We want to be part of the
solution.”
2. Distrust of Oil Industry

American Petroleum Institute poll - “Out of 25
major industries that are polled and
reviewed, the oil industry ranks last – last in
credibility even behind tobacco.”

“High dose of reality” for oil industry and COP
3. Energy Security
ConocoPhillips’ 4 Steps to Energy Security
1.
Energy Source Diversification
2.
Greater Energy Efficiency
3.
More Innovation and R&D
4.
Environmental Protection
I. Energy Source Diversification







Ethanol
Biodiesel
Hydrogen
Oil sands & oil shale
Heavy oils
Additional liquid fuel technology (turning coal
and natural gas into liquids)
Carbon sequestration
Ethanol – Not a Silver Bullet



COP remains cautious
of ethanol and
biodiesels, but still sees
a future for them
Need government help:
research and
incentives/subsidies
E85 – quality control
will be very important
Ethanol


Iowa residents concerned
about rising price of beef &
dairy in response to rising
corn prices
Iowa Renewable Fuels
Association: “Is a nickel
more for a pork chop worth
becoming more independent
of foreign oil?”
Health Risk of Ethanol


Is ethanol better for our health?
Stanford University Study:
–
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A high blend of ethanol poses an equal or greater
risk to public health than gasoline (which already
causes significant health damage)
Computer modeling: simulation of atmospheric
conditions throughout U.S., especially L.A.
Health Risk of Ethanol
According to the study, using ethanol-based fuel instead of gasoline
would likely increase the ozone-related death rate in Los Angeles by 9
percent in 2020
Health Risk of Ethanol




Results: E85 vehicles reduced atmospheric levels of
two carcinogens (benzene and butadiene) but
increased two others (formaldehyde and
acetaldehyde)
E85 may increase ozone, similar effects to lungs and
immune system.
No difference what E85 is made of: corn,
switchgrass, or other plant product.
Alternative? Battery-electric, plug-in hybrid,
hydrogen fuel cell vehicles, wind or solar powered
energy
Additional Ethanol Concerns




Ethanol produced
mainly in middle of the
country
Ethanol cannot be
shipped by pipeline
Must be shipped by
truck or rail
These sources use
energy to ship
Competitors

BP announced in 2005 plans to invest $8 billion over 10 years into an
alternative energy division focusing on wind, solar, natural gas and
hydrogen power.

In February of 2007 BP announced a plan to give $500 million over 10
years to a consortium with UC – Berkeley.

Chevron Corp owns part of a biodiesel plant along the Houston Ship
Channel and has earmarked $5 billion for alternative and renewable
energy technologies from 2002 through 2009

Last year, Chevron Corporation pledged $25-million to the University
of California at Davis and $12-million to Georgia Institute of
Technology, both awards over five years, for research into alternative
fuels.
Competitors

Shell has spent more than $1 billion on biofuels, wind, solar
and hydrogen since 2000 and distributed nearly 100 million
gallons of biofuels last year.

Stanford announced in 2002 that it would receive $225-million
over 10 years from the Exxon Mobil Corporation and two other
sponsors for a variety of research on renewable research,
including biofuels.

Exxon Mobil Corp. isn’t seeking to invest in renewables
because they aren’t viable without subsidies. The company
had unprofitable investments in solar and nuclear energies.
Is Conoco Doing Enough?

According to pro-environment investment firm
Trillium Asset Management, a ConocoPhillips
investor:
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–
–

ConocoPhillips is ignoring zero-carbon technology
Behind the curve
BP, Shell, and Chevron will have market share before
ConocoPhillips joins the market
May 9 Shareholder meeting will consider whether to
prepare a report on COP response to rising
competitive and regulatory pressure to “significantly
develop renewable energy sources.”
II. Greater Energy Efficiency
Great lifestyle changes are needed
 Must be more efficient with energy use. U.S has
4% of world’s population but consumes 25% of
world’s energy.
 5-7% of electricity demand comes from
“Parasitic Load” (home computers left on during
the day, devices/chargers left plugged in,
unused lights left on…)
 ConocoPhillips U.S. refineries will improve
efficiency by 10% by 2012.
Greater Energy Efficiency



ConocoPhillips Billings refinery earned EPA
ENERGY STAR for superior energy performance
Top 25% in country
Based on design, operations, and maintenance captures and recycles thermal energy used to make
fuel


heat-recovery system from crude tower for preheating cold
crude
intensive steam trap maintenance program to separate
condensed water from a steam system and returns hot water
to the boilers to generate more steam
III. Increased Innovation and R&D
 Increasing
2007 technology R&D
budget by 50% - to $150 million.
 Employs 250 scientists, engineers,
and researchers – exploring
alternative and renewable energy
sources
Current ConocoPhillips Projects
1. ConocoPhillips and Tyson Foods
2. Iowa State University Biodiesel Research
Program
3. Controlled Hydrogen Fleet and Infrastructure
Demonstration and Validation Project
4. Whitegate Refinery for renewable diesel
5. Freedom Car & Fuel Partnership for Hydrogen
Research
6. Clean coal application
7. LNG initiatives
1. ConocoPhillips & Tyson Foods
On April 16, 2007 ConocoPhillips and Tyson
Foods, Inc. announced a strategic alliance to
produce and market renewable diesel fuel.
ConocoPhillips & Tyson Foods
Plan to use beef, pork and poultry byproduct fat to create a transportation fuel
ConocoPhillips & Tyson Foods

Renewable diesel
–
Similar to biodiesel in that they use similar feedstocks
–
Different from biodiesel in that they have different
processing methods and create chemically different
products.
–
Renewable diesel is chemically equivalent to
conventional diesel fuel and can be shipped and
distributed through existing pipelines to distribution
terminals unlike other biofuels which must be transported
by rail or trucks.
ConocoPhillips & Tyson Foods
Benefits of renewable diesel:
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–
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Produces lower life-cycle carbon
emissions.
Increases energy security by using
a domestic and renewable energy
source.
Can be used in today’s vehicles.
Can be produced and distributed
with existing refineries and fuel
distribution systems.
Refinery quality control systems
ensure product quality.
ConocoPhillips & Tyson Foods

Tyson will make capital improvements this
summer in order to begin pre-processing
animal fat in some of its North American
rendering facilities.

ConocoPhillips will also be making capital
expenditures to enable it to produce the fuel
in several of its refineries.
ConocoPhillips & Tyson Foods

By the fourth quarter of
2007, ConocoPhillips’
Borger refinery will be
the first to process the
renewable diesel from
fat from Tyson’s
Amarillo beef rendering
plant about 50 miles
away.
ConocoPhillips & Tyson Foods

They will produce renewable
diesel fuel mixtures that meet all
federal standards for ultra-lowsulfur diesel.

Production is expected to
eventually reach as much as 175
million gallons (4.2 million
barrels) per year, roughly 3% of
ConocoPhillips’ entire diesel
production.
ConocoPhillips & Tyson Foods

Proprietary thermal depolymerization production technology.

Animal fats will be processed with hydrocarbon feedstocks to
produce high-quality diesel fuel that meets all federal
standards.

The addition of animal fat will improve the fuel’s ignition
properties.

The processing steps will improve the fuel’s storage ability and
handling characteristics.
ConocoPhillips & Tyson Foods

Thermal depolymerization technology
–
Process for the reduction of complex organic materials into
light crude oil.
–
Mimics the natural geological processes.
–
Under pressure and heat, long-chain polymers of hydrogen,
oxygen and carbon are decomposed into short-chain
hydrocarbons with a maximum length of around 18 carbon
atoms.
ConocoPhillips & Tyson Foods
“ConocoPhillips believe the key to a secure energy
future is the development and efficient use of diverse
energy sources. This alliance will provide a new and
significant contribution to our nation’s domestic
renewable fuel supply. It also offers an excellent
opportunity to use our company’s manufacturing
expertise and advanced technology to help increase
the supply of renewable fuels and to reduce
greenhouse gas emissions.”
--Jim Mulva, ConocoPhillips Chairman & CEO
ConocoPhillips & Tyson Foods
ConocoPhillips & Tyson Foods

The processing technology was developed
by a cross-functional team at ConocoPhillips
and was tested successfully at the
company’s Whitegate refinery in Cork,
Ireland, in 2006.
ConocoPhillips & Tyson Foods
Energy Policy Act of 2005
- Provides tax subsidies of 51 cents per gallon
of ethanol and $1 per gallon of biodiesel
ConocoPhillips & Tyson Foods

Early April, 2007, IRS issued Notice 2007-37
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Ruling interprets thermal depolymerization
“generically.”
The Energy Policy Act of 2005 and its legislative
history do not specify whether a process that uses
catalysts is a thermal depolymerization process.
IRS said it was.
Upon this finding, ConocoPhillips and Tyson
foods announced their co-venture.
ConocoPhillips & Tyson Foods

Rep. Lloyd Doggett, D-TX, plans to introduce
legislation that would repeal the Treasury
Department’s interpretation.

“There appears to be abuse that demands
legislative correction.”
–
Lloyd Doggett
ConocoPhillips & Tyson Foods

In addition, the National Biodiesel Board, which
represents companies primarily using soybean oil to
make fuel, does not agree with ConocoPhillips’ and
Tyson’s ability to use the tax incentive.

“We’re not opposed to refiners converting a portion
of their capacity into renewable capacity. But we
believe it’s bad public policy for taxpayers who are
paying as much as $3 for a gallon of gasoline to
have their taxes pay another dollar for this.”
--Joe Jobe, CEO of the National Biodiesel Board
ConocoPhillips & Tyson Foods

Denying the companies the right to use the
tax credit “will only serve to limit the
expansion and availability of alternative fuels
and also damage the ability of livestock
farmers and ranchers to participate in the
renewable energy business.”
--Gary Mickelson, spokesman for Tyson Foods
ConocoPhillips & Tyson Foods

Cost of using animal fat as a feedstock:
$2 per gallon, or about $84 per barrel.

Crude oil futures at above $63 per barrel on
the NYME.

With the tax credit the cost of using animal
fat as a feedstock:
$1 per gallon, or about $42 per barrel.
ConocoPhillips & Tyson Foods
“Without the tax credit, it wouldn’t be
commercial. With the tax credit, it’s just
barely commercial.”
--Jim Mulva, CEO, ConocoPhillips
ConocoPhillips & Tyson Foods

“If we’re trying . . . to reduce our dependence
on foreign oil and have more homegrown
energy sources, every bit of flexibility we can
provide in getting bio-mass converted to
usable forms of transportation is absolutely
needed for this country.”
--Cal Hodge, President of A 2nd Opinion, a fuels consulting
firm which supports the Treasury’s decision.
ConocoPhillips & Tyson Foods

Several agricultural groups such as the
National Cattlemen’s Beef Association, the
National Chicken Council and the Texas
Cattle Feeder Association support the
broader interpretation.

Subsidy for Big Oil? Or helping farmers and
ranchers and fostering production of
alternative fuel?
2. ConocoPhillips & Iowa State University

April, 2007 – ConocoPhillips established a $22.5 million
biofuels research program.

Initial grant of $1.5 million in 2007.

$3 million each year for 7 years thereafter.
ConocoPhillips & Iowa State University
Research will include converting
biomass to fuel through fast pyrolysis
–
Process that uses heat in absence
of oxygen to decompose biomass
into a liquid product.
–
This bio-oil can be used as a
heating oil or can be converted
into transportation fuel at
petroleum refineries.
ConocoPhillips & Iowa State University
COP will also sponsor studies of other thermochemical technologies
that produce biofuels

Research to understand and support
environmental sustainability and rural
economies
– Emphasizing crop improvement
and production
– Harvesting and transport of
biomass
– Impacts of biofuels on economic
policy and rural sociology
ConocoPhillips & Iowa State University



ConocoPhillips’ staff scientists will not work regularly
on Iowa State's campus.
The university will own the rights to any inventions
discovered with ConocoPhillips’ money, but the
company will have first rights to an exclusive license.
ConocoPhillips will have a right to delay publication
of scholarly findings for up to 45 days to ensure that
none of its proprietary information is inadvertently
released.
ConocoPhillips & Iowa State University
“ConocoPhillips is developing long-term
relationships with respected academic
institutions such as Iowa State to research
extensions of traditional energy sources that
ultimately will benefit consumers."
--Jim Mulva, Chairman & CEO
3. Controlled Hydrogen Fleet and
Infrastructure Demonstration and
Validation Project





5-year program, began in 2004
Funded in part by DOE grant
COP, automakers, CA universities, government agencies
Goal: continue to demonstrate and validate
advancements in hydrogen-based transportation
infrastructure
COP will provide six of 24 CA fueling stations and will
provide hydrogen produced from natural gas and
renewable energy sources
4. Whitegate Refinery
Cork, Ireland

Renewable diesel
production

Uses soybeans and other
vegetables to produce
renewable diesel that meets
European Union diesel fuel
standards
Crude oil discharging
at Whitegate
Whitegate Refinery (cont.)
Tyson Project
 Process may be used to
convert animal fats and oils
to renewable diesel
 2006 – Developed the
technology to co-process
beef, pork and chicken fat
with hydrocarbon feedstocks
at Whitegate facility.
Aerial View of Whitegate
5. FreedomCAR and
Fuel Partnership



Began in September 2003
Goal – Research
technologies for cars/light
trucks and fueling
infrastructure to reduce
foreign oil import
dependence – without
sacrificing freedom and
mobility and vehicle choice.
Promote hydrogen dialogue
and research

DOE, BP America, Chevron Corporation,
ConocoPhillips, Exxon Mobil Corporation,
Shell Hydrogen LLC, and the United States
Council for Automotive Research (USCAR)—
a legal partnership among DaimlerChrysler
Corporation, Ford Motor Company, and
General Motors Corporation.
6. Clean Coal Technology

Wabash River Coal Gasification
Repowering Plant in Indiana
has been using ConocoPhillips’
E-Gas Technology on a
commercial basis since 1995.

E-Gas Technology converts
coal and petroleum coke, which
may have a negative economic
value, into a clean synthesis
gas containing hydrogen. The
process allows virtually all
pollutant-forming impurities to
be removed.
Clean Coal Technology



2004 – ConocoPhillips and Excelsior Energy
announced plans for a technology licensing
agreement for an IGCC facility using the E-Gas
Technology, called the Mesaba Energy Project.
Being built in Minnesota and is expected to be
operational by 2012.
Will be one of the cleanest and most efficient coalfired power generating facilities in the world.
7. Liquid Natural Gas (LNG)




ConocoPhillips built the first LNG carrier used for international
trade in 1959.
The company also built the first successful commercial
liquefaction facility in 1969 in Kenai, Alaska, which it continues
to safely operate today.
ConocoPhillips’ LNG technology is employed in Trinidad and
planned for use in Egypt, Equatorial Guinea, Australia and
Nigeria.
Construction has begun on a regasification terminal in Freeport,
Texas
– Will connect with the Texas intrastate gas pipeline system.
– Rights to approximately 1 billion cubic feet per day of the
terminal’s capacity.
– Estimated startup: 2008.
Other COP Social Initiatives
1.
2.
Kuukpikmuit Subsistence Oversight
Panel: Designed to identify and
minimize conflict between COP and
Native Alaskans
Indonesia Workforce Program: Aids
in development of a skilled workforce
1. Kuukpikmuit Subsistence Oversight
Board (KSOB)

ConocoPhillips operates the first
production facility on Native Alaskan
land at the Alpine field.

ConocoPhillips and Nuiqsut
community developed the KSOB to
help identify and minimize conflict
between Alpine operations and
traditional practices.

The KSOB consists of Nuiqsut
residents and monitors the health of
subsistence resources on Kuukpik
lands and identifies any impact that
exploration, development or
production activities might have on
those resources.
2. Indonesia Workforce Program

1-year new engineer training
program.

Program teaching high school
students about drilling and other
skills for working in offshore
operations.

Joined with a group of companies
to create vocational training
workshop in Natuna.
IV. Environmental Protection

Ties into everything
ConocoPhillips does

Cannot operate without
following all
environmental laws &
regulations

Must think about
carbon emissions and
climate change
ConocoPhillips and USCAP





U.S. Climate Action Partnership (USCAP)
April 2007 – COP joined USCAP to support
mandatory national framework to address
greenhouse gas emissions
Need businesses to step forward to provide
solutions to climate change problem
COP building potential long-term cost of carbon
into capital spending for major projects
Developing internal targets for GHG emissions
from its operations
ConocoPhillips and USCAP
Requirements of Carbon Reduction Framework:





Transparent
Clearly communicate cost of carbon to
consumers.
Structured to avoid increasing energy price
volatility
Encourage energy efficiency
Paced to match speed of developing
technology
Environmental Protection
Greater environmental responsibility (shrinking
environmental footprint) = Broader discretion in
operations
Sustainable Development
4 ‘A’s’ of Sustainable Development
1. Affordable to end user
2.
Adequate returns to suppliers
3.
Available any time
4.
Acceptable impacts to society and
environment
Sustainable Development

No single energy source completely
satisfies all 4 “A’s”

Must strive for as many as possible

Leads to need for energy source
diversification
Interdependence
(a.k.a. Energy Security )

Ways to facilitate supplies outside of U.S.
1.
Canadian oil sands (same size as Saudi
Arabian fields)
2.
Find partnerships in countries with the
remaining 93% ownership (COP owns 20% of
Russian oil co. LUKOIL)
3.
Broker peaceful relations with Iraq, Iran,
Venezuela – trade and appropriate agreements
(not doing great job so far)
REALITY: So much reserves in foreign lands, we
need them.
Interdependence
(a.k.a. Energy Security )
4. Domestic supplies in coastal fields, Alaska
(ANWR) – difficult for environmental reasons
• Need to develop new technologies
-
Only 25-30% accessible, need technological
improvements to get hard-to-reach 70-75%
•
No longer pursuing oil in ANWR
•
Cut ties with Arctic Power
Interdependence (cont.)
5. Methane hydrates:
 Natural gas trapped in ice slush at bottom of the
ocean
 Geographically well-distributed globally
 Contain 7% more NG than in traditional source
areas
 As oil/gas prices increase, these sources will
become more necessary
6. Stranded oil/gas reserves: using new technology to
acquire new resources at old Texas fields
The Future of U.S. Oil Dependence
Is this the Future?
Some Opinions of Energy
Independence

“The concept of ‘energy independent’ is ridiculous,
unachievable, and perhaps not desirable”
-- Mark Mathis, Responsiblenergy.org

“Energy independence is not really possible in the
U.S., and the public needs to shift to the more
practical goal.”
-- Jim Mulva, CEO, ConocoPhillips
Rocky Mountain Institute
Winning the Oil End Game, RMI
4 Steps to Energy Independence:
1.
Double the Efficiency of Using Oil:
Ultralight vehicle design
a.
b.
Advanced composite or lightweight-steel materials
can nearly double the efficiency of today's popular
hybrid-electric cars and light trucks while improving
safety and performance.
The vehicle's total extra cost is repaid from fuel
savings in about three years
Rocky Mountain Institute (cont.)
2. Apply creative business models and public
policies to speed the profitable adoption of
super-efficient light vehicles, heavy trucks, and
airplanes.
3. Provide another one-fourth of U.S. oil needs
through major domestic biofuels industry
4. Save half the projected 2025 use of natural
gas
a. Use the saved gas instead of oil
b. Convert gas into hydrogen
The Future of the Oil Industry according
to RMI
What happens to the oil industry?




Shell, BP, ConocoPhillips already shifting from Oil
companies to Energy companies.
“Done right, this shift can profitably redeploy their skills
and assets rather than lose market share.”
Biofuels are already becoming a new product line that
leverages existing retail and distribution infrastructure and
can attract another $90 billion in biofuels and biorefining
investments.
Oil may, however, retain or even gain value as one of the
competing sources of hydrogen.
IV. Educate the Youth

Educate young children on energy
efficient lifestyle – need cultural
changes
–
–
–
–
Carpooling
Consolidating car trips
Living closer to work
Utilize mass transit
Education at ConocoPhillips



Active in communities where there are COP
facilities (refineries and research)
Community Outreach at grade schools and
high schools
40-50% of ConocoPhillips’ 38,000 employees
are within 5 years of retirement
–
Educate college students to be geo-scientists,
project managers, all types of jobs
Conclusion
1.
Energy Source Diversification: biofuels, hydrogen,
liquid natural gas
2.
Greater Energy Efficiency: increasing facility
efficiency by 10% by 2012
3.
More Innovation and R&D: increased by 50% in
2007, partnerships with Tyson, Iowa State University,
DOE, car manufacturers, & industry competitors
4.
Environmental Protection at ConocoPhillips: shrink
environmental footprint, be environmental stewards
QUESTIONS/COMMENTS?