ENERGY POLICY:

Don't risk 'clean energy' future to save coal jobs -- BP's CEO

The United States isn't going to get "beyond petroleum" anytime soon, but the chief executive of oil giant BP says it's time for the nation to start thinking beyond coal.

The nation should not be trying to save coal jobs at the expense of cleaner fuel industries, Tony Hayward, head of BP PLC, told a Washington think tank audience yesterday, adding that there is no reason to keep building coal-burning power plants here.

"We've got to find a better way to create jobs than preserving coal jobs," Hayward told his audience at the Peterson Institute for International Economics.

Hayward's comments reflect an increasingly bitter political rift between two of the largest elements of the country's energy industry -- coal and natural gas.

Gas executives are irritated that authors of the House climate bill last year built significant protections into the legislation to protect coal industry jobs and coal-state lawmakers. If lawmakers want to cut carbon emissions, they say, they should look more to natural gas, which emits about half as much carbon as coal. They say gas should be the "bridge fuel" to a low-carbon future or, even better, a permanent fixture of a diverse approach to lowering emissions.

"The coal sector was disproportionately favored in the first go at this," Hayward said. "It's about creating jobs."

BP is one of the world's largest producers and refiners of oil and gas. But it has little or no stake in coal, a fact that the coal industry highlights in challenging Hayward's assertions.

"Mr. Hayward is obviously unaware that coal is America's most abundant energy resource," said Carol Raulston of the National Mining Association. "I'm consistently surprised that one of the world's wealthiest companies would suggest Americans should forgo good jobs and affordable electricity from coal so that oil and gas can increase their market share."

BP's source of credibility leans greener. Hayward's predecessor, John Browne, made BP one of the world's first oil giants to deem climate change a problem. With its "Beyond Petroleum" campaign, BP continues to market itself as a forward-looking and environmentally conscious energy company.

BP is among the petroleum companies laboring to improve the fortunes of natural gas in the Senate climate bill being drafted by Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.). Among other efforts, the company has circulated a "discussion draft" of language that would block federal regulation of a gas drilling technique that has opened up huge domestic sources of gas (E&E Daily, March 23).

Hayward also said that with the vast supplies of natural gas now available in the United States, the country should be weaning itself from coal-fired electricity.

"It's surprising the U.S. is still building coal-fired power plants," he said. Among other things, he noted, electric vehicles won't reduce carbon emissions much if they are powered by coal-generated electricity.

But he used his speech at the think tank to stress that fossil fuels are not going away in the decades ahead, because the world will need energy as the residents of developing countries climb out of poverty.

"Renewable energy will increase," he said, "but we have to be realistic. The world is going to use much more energy."

He also expressed more optimism than most about the recent Copenhagen climate summit and efforts in Congress to develop a policy to limit climate change. He said he "fundamentally" disagrees with those who say Copenhagen failed by not creating a binding accord to limit carbon.

"The nations of the world are lined up and pointed in the same direction," Hayward said.

And he said he is "cautiously optimistic that something will emerge" on climate in Congress. But he said "the blueprint remains very much a cap-and-trade mechanism," even though Kerry, Graham and Lieberman have said say they have turned sharply away from the cap-and-trade approach.

He also dismissed the idea of a carbon tax as a solution for greenhouse gas emissions.

"You can't conceive of a tax high enough to change people's behavior," Brown said.