This policy proposal is addressed to the global head of BP regarding the potential of renewable energy and its need to diversify from present non-renewable energy portfolio into the future.
Recent changes in the energy landscape have brought with them significant strides within the scope of energy use. In particular, there are moves towards the adoption of clean and renewable energy with the aim of reducing the carbon footprint globally and keep the level of temperature increase at a maximum of 2 degrees by the years 2100. This has been met through a raffle of measures that are meant to ensure that there is a global shift from many of the non-renewable sources that are in use towards renewable sources such as solar and hydro energy (BP, 2015). Along this trend, there have been significant increases in the adoption of renewable energy and growth in its use. However, the most significant issue along this line lies in an increase in the use of non-renewable sources, even as existing measures seek to reduce its use. Part of the non-renewable sources have reduced in use such as coal while petroleum products still continue to increase in use, even as concerns regarding their impact continue to rise.
The present developments indicate an eerie landscape where despite the growth in non-renewable sources, there is a similar increase in the use of non-renewable energy, especially the portion of petroleum products. He statistics in the year 2014 indicate that energy developments have resulted in a surge in demand of energy products in line with the greater volume of consumption. This has remained the major force that is driving the path of production even as efforts in place aim to replace this surge with a greater portion of renewable sources (BP, 2016). Careful evaluation equally indicates that the connection between energy and technology continues to impact the path of efficiency as energy becomes more plentiful and cleaner. However, despite the path of growth in the volume of energy that is demanded all over the growth, the year has indicated a slight drop in aggregate global demand of fuel products fell slightly, this first time this has happened in close to two decades.
As a producer of petroleum products, these changes indicate that BP needs to adopt a path of clean energy as a way of contributing towards sustainability in the future and safeguarding its revenue streams, even as technology continues to create an impact on the choice of sources. Beyond the influence of growth in renewable energy, there is further indication that the price of non-renewable sources of energy continue to drop. It is consequently imperative that production entities adopt an alternative source of revenue in an aim of enhancing their state of diversity and growing their share portfolio to a level where despite drops in global petroleum prices, they will still be able to cope in an effective manner (BP, 2016). At BP, such changes would involve carrying out control over its capital investments and establish a viable judgment model that would enable the firm to apportion its capital towards the areas that would provide highest rate of return.
The other indication as to the growth in potential of alternative energy sources as an imperative for the firm to adopt alternative sources as potentially found in clean energy. As an indication of this, nuclear power and hydroelectric power has experienced a path of growth over the recent times, particular indicating a positive growth of close to 2 percent in the past three years. The former is more evidently a new portal that has not been explored and for which there remains a great untapped potential that would be exploited through the commercial capacity that is available in the firm. In aggregate terms, the area of renewable energy has experienced a phase of growth of over 3 percent in terms of consumption, thereby going more than triple the amount that was recorded in about a decade or so ago (BP, 2016). Even more particular as an area that needs to be explored, the potential in solar energy has experienced close to 40 percent in growth over this same period (The Economist, 2015).
While the demand and levels of production for petroleum energy products has experienced a steady path of growth amid the debate and concerns over its environmental concerns and the presence of cleaner alternatives, there is further indication that at some point, the volume of production is surpassing the existing levels of demand, thereby creating a surplus that is not absorbed. The slower growth is demand as compared to the present levels of supply indicate that the consumer is taking up alternative sources and responding to concerns regarding the level of sustainability in the use of non-renewable energy products. In particular, the greatest area of growth remains to be in the United States that has recently surpassed the middle east in production of oil and petroleum products (The Economist, 2015). A significant part of this drive is the shale revolution in the US that has served to drive the path of demand and production, thereby creating the state of disparity which is being manifested.
Further, the dynamics in supply of energy through the recent times are also driven by changes in technology, especially a path of invention and improvement. This has resulted in the surge of creating energy products, but also acts as a reason as to why as one of the largest producers of petroleum energy products in the globe, there is need to respond towards these changes. A number of states in the United States have legislated and imposed energy quotas that require that a progressively growing portion of energy sources within the state are drawn from renewable sources. This measure has also been compounded with emergence of startup companies in the area of renewable energy that continue to grow in their market share (The Economist, 2015). Effectively, this imposes a direct volume quota regarding the amount of energy that the firm can produce and supply within the state and going forward, the rest of the country and globe at large. In addition, renewable energy sources remain the source component that continue to record a solid positive growth over time despite the surges that are being manifested in petroleum and oil products.
Coal was once the most exploited energy product in the globe and still remains dominantly so in some parts of the globe, especially in countries such as India and China within the continent of Asia. However, its potential in many other parts of the globe continues to deteriorate due to the negative effects and concerns about its environmental effects. Equally, this same scenario is bound to be replicated in oil and petroleum products. Despite its volume being potentially strong in the United States, there is every indication that its large volume would progressively occur to be untenable with deteriorating demand and imposition of policies that curb its volume of use. Equally, the influence of technology acts as a suitable template upon which the largest producer of petroleum energy in the globe would capitalize upon in establishing a greater level of diversity within its product portfolio. Renewable energy sources such as wind, solar and nuclear power remain the most promising avenues into the future.
The Economist. (2015). Energy and technology. Special Report. http://www.economist.com/node/21639014/print