Renewable
BP subsidiary is a major player in American wind power.
As CEO of BP Wind Energy, Laura Folse leads a team that helps operate 14 wind farms in the U.S., including four in West Texas. BP leads all the so-called Big Oil giants in operational renewable power. BP’s 14,450 megawatts of U.S. wind power are theoretically enough to power all the homes in San Francisco.
“We’re the 12th largest wind company in the United States,” she said.
Folse, whose offices are on the 32nd floor of the Bank of America building downtown, was once in charge of BP’s response to the 2010 Deepwater Horizon disaster in the Gulf of Mexico. She started her latest position in January. She recently spoke with the Houston Chronicle about the future of wind power for BP and traditional energy giants:
Q: Is BP now transitioning beyond its problems in the Gulf and back toward green energy alternatives? A:
The Deepwater Horizon accident caused the need for BP to do a lot of reflection on many fronts. Now that we have agreements to resolve the major liabilities stemming from the accident, the company is starting to look now to the future, and I was pleased to learn renewables are going to be a big part of that future. The one qualifier is one of the hindrances to reinvestment right now is not just the Deepwater Horizon liabilities, but also the oil price and gas price. We’re still going to need those prices to stabilize.
Q: How close did BP come to getting out of the wind business? A:
It’s public knowledge over the last five years BP had to divest a number of properties. There was a decision made to divest out of our wind business. But we weren’t pleased by the indications we got from the market, and we withdrew that. It was contemplated a second time but, after discussing the potential sale with the chief executive and also because of some input from our shareholders, BP decided that we wanted to remain in the wind business. What I can say is that BP has taken a long hard look at the future, and we see that there’s a transition occurring in the energy industry, particularly around generation of electric power. If you’re an energy company looking to the future, you have to be in renewables.
Q: How soon is BP expanding its wind footprint given that federal tax credits begin phasing out after 2016 and where?
A:
The production tax credits are an important aspect of the wind industry, so BP is certainly not alone in evaluating options for growth and trying to make some very important decisions before that step-down occurs after the end of this year. There’s not a specific location, but the central part of the United States is where the wind resources are the best.
Q: Seeing as how wind is categorized as part of “other” in its financial documents, what specifics can you give about BP’s budgetary commitments?
A:
Talk about glamour. I’m the CEO of “other.” How do you like that? I’m not being coy. We’re still working on the right financial framework for our wind business. I had the occasion to meet with our chairman, our executive team and our board of directors a few weeks ago and talked to them about my vision about where we want to take BP’s wind business, and I received support. I have some work to do to go back and see them again in September.
Q: What can you say about the sophistication of a wind industry that might seem simple to an outside observer?
A:
It’s pretty amazing. It’s not just the blades that turn — and tilting them for optimal edge angles — it’s many aspects of the wind turbine that actually turn. Simplistically speaking, they convert the wind energy electricity on the order of about 40 percent of the energy, so there’s a lot of energy lost. But, in some of the turbines that were designed 10 years ago, it was closer to 30 percent efficiency. So that’s a big jump in a very small amount of time. We’re seeing the ability for the machines to learn and correct themselves. By reviewing the data, the machine is actually learning how to adjust its performance to optimize the generation.
Q: How rapidly is the industry evolving? A:
Oil and gas is an industry that’s been in existence for over 100 years with wellembedded processes. Although wind energy has been around for hundreds of years, in the current state it’s only been about the last 10 to 20 years. In many ways it’s a nascent industry that’s very young. It feels more like electronics in terms of how fast technology is improving and changing and bringing more efficiency. It’s an amazing and very rapid pace that we’re seeing.