LP Gas

A global view of propane’s future

The secretary general for the World Energy Council concedes he has serious doubts about finding long-term solutions to meet burgeoning consumption needs in today’s radically changing global energy market.


The president of BP Natural Gas Liquids says there are answers, but they require unprecedented innovation and bold investment.

Several hundred propane industry representatives from around the world listened to Gerald Doucet and Jeanne Johns present their views of global energy market challenges as keynote speakers at the World LP Gas Forum and Global Technology Conference held Oct. 17-20 in Chicago.


Jeanne Johns, president of BP Natural Gas Liquids, believes innovation will answer pressing global energy issues.

Doucet, who brings a background in international relations, economics and diplomacy to his duties at the foremost multi-energy organization in the world, says the world needs to keep all energy options open because no one fuel or distribution model can answer the insatiable demands for more energy in a complex global market.

“We are in a very unstable world,” said Doucet, whose organization represents more than 90 countries – including most of the largest energy-producing and energy-consuming nations. The World Energy Council works with coal, oil, natural gas, nuclear, hydro and renewable energy sectors to promote the sustainable supply and use of energy for the greatest benefit of people across the globe.


A panel of international energy experts share their insights about the future of energy supply around the world.

Doucet is discouraged that worldwide energy leaders have been unable to find agreement on global infrastructure investment. He believes solutions must spring from new partnerships between the global energy community and the governments representing world powers and developing nations alike.

“It is a significant issue that needs to build in margins of trust,” Doucet said. “New partnerships between government and industry are essential for the research and development needed in a market-driven world. But those partnerships have largely broken down and need to be rebuilt.”

Strides also need to be made in the arenas of public awareness and acceptance. “Right now, everyone demands energy, but nobody wants it built in their backyard. Somehow, that mindset needs to change,” he said.

The politicization of energy, particularly among major players such as Russia, the United States, Bolivia and Middle East nations continues to stifle progress in building reliable systems of investment and management, he observed.

Huge growth in Russia, India and China will be a wild card in competition for supply by region and by fuel. Yet increased competition in the market has not driven down costs and enhanced expansion of electricity. In fact, the price of power has risen 20 percent while global accessibility remains a distant World Energy Council goal, he said.

“What does the future hold? Certainly, it is a growth market,” Doucet said. “But there is debate as to whether it is attainable. Some think we are heading to a real reduction in GDP [gross domestic product – a measure of the market value of goods and services produced within a country] as far as overall demand for energy and services.”

If the World Energy Council is unable to broker rules for world energy trade, policy development in individual countries will continue to stagnate and development will be driven by political and social concerns.

“We are looking for answers that address the short-term interests of shareholders, societal expectations and the need for long-term planning,” Doucet said. “And we need to realize that the decisions we make now will impact us in the year 2030 and beyond.”

Innovation offers answers

BP’s Jeanne Johns doesn’t share Doucet’s pessimism. She does believe, however, that the three primary global energy challenges – affordability, security of supply and global warming – each demands innovative solutions.

The new business model using a number of technologies at Ferrellgas offers a good example of how innovation can help keep down the cost without jeopardizing customer service, she said.

“These improvements, like those other propane suppliers have implemented across the propane value chain, give me confidence in the vibrancy and long-term health of our industry,” Johns said.

Long-term, the big questions are security of supply and global warming – and how the two can be addressed simultaneously.

“We are at a moment in time that calls for both boldness and innovation, the courage to go to new places and try new things,” she said. “We at BP believe we cannot wait for a scientific consensus in order to address these pressing global energy needs. If we do, we will wait for a very long time indeed. Innovation happens in a climate of political, social and technical uncertainty. Consequently, consensus is not only unlikely, it is virtually impossible.”

Johns maintains that the issues in today’s complex, uncertain global environment are too complex to be reduced to right or wrong answers. Solutions sought by energy companies, governments and the public at large can only come from aggressive, proactive action and collaboration.

“In the context of energy, we will need unprecedented levels of innovation over the next 30 years in order to provide the solutions to growing global energy demand,” she said.

The issue goes beyond satisfying insatiable demand for energy around the world. Adequate supply must be balanced against the limits of conventional oil and gas supplies and climate change. The challenge, Johns said, is to use fossil fuels with greater efficiency and with technologies that reduce their carbon emissions.

For BP, the needs of the next generation are driving new business lines and funding leading-edge projects. Some of those have led to partnerships in alternative energy research at universities around the world, including programs at Stanford and Princeton.

“In many cases we have acted without prior resolution of all the scientific or technical issues, without having clear policy frameworks in place, without a conventional water-tight business case,” she said.

Outside the laboratory, the company invested $8 billion in its Alternative Energy business, which will focus on power generation using a mix of solar, wind, hydrogen and gas technologies. It also is committed to explore clean coal opportunities through investment in technologies that capture and store carbon dioxide.

BP also is building a $1 billion power plant in California that will use petroleum coke as a feedstock treated with waste water to convert hydrogen and carbon dioxide. The hydrogen will be used to fuel a turbine to generate electricity to power 300,000 homes.

The timing for innovation is sound, she noted, as venture capital investment in the energy technology sector has grown from $380 million between 1993-98 to $4.4 billion from 1999-2004.

“I strongly believe technology is fundamental to the way forward, and I don’t doubt the growing vitality of human ingenuity and inventiveness,” she said. “This is why investment in technology is so critical.”