MR. CHARLES CHRISTOPHER: I have to tell a quick Florida story too. Bottom right. What do you mean bottom right?

UNIDENTIFIED VOICE: (Indiscernible).

MR. CHRISTOPHER: Okay. I live in Houston. And my family doctor has a piece of property in Florida. And every year when I go in to have my physical we talk about when he's going to retire and so on. So after all the hurricanes I asked him how his property in Florida was doing. He said fantastic. I said what's the deal? He said there used to be a row of houses between me and the beach, now they're gone and my property is worth a lot more. I said well, I think this is an optimum time to sell.

I want to talk to you a little bit about what one business, in particular BP, is doing about the climate issue. I'm not going to try to talk about the science, although I can do that. Bob's done a good job of that. But the issue for us is not whether there's a problem, but the issue is whether we can maintain the standard of living that we have and still create business opportunities to move forward. And BP thinks we can. So I want to show you how we're going to do that (Christopher PowerPoint presentation).

First of all, BP does accept the science. The science is getting progressively stronger on this issue. There are some uncertainties. There will always be uncertainties when the weather and the climate is concerned but we believe it's time to move forward. And the Socolow wedges that Bob talked about are one example of how to do it. But each of these wedges is enormous. The first one in doubling gas mileage from 30 miles per gallon to 60, the fleet average in the U.S. is 23. So we've got to go up 50 percent to get to 30. So it's a big jump. And the point is that it doesn't require new technology. It requires that we move ahead with what we already know how to do, if we want to.

So the technologies are known. We think this is a business feasible thing to do. So BP's goal, BP is an energy provider and we intend to stay in that business for a long time. But we think that it can be done in a more responsible way so that we can minimize damage to the environment that's caused not only by our internal business, but also by the products that we sell. And BP has made some announcements and is about to make some more that will show that we hope to lead the transition from where we are now into a different place.

The world's energy is based on fossil fuels at this point. There's a strong link between economic growth and business growth and energy utilization. And almost all of that produces CO2. At some point in the future we have to be in a different place where we're using renewables of some sort.

There are three bridges that will get us there. One of them is emissions reductions in our own business and in the products that we distribute. Another is energy efficiency, using those products better. And a third is alternative energy.

BP has made commitments about its internal business. The first one was that in 1998 we said we would make a 10 percent reduction from 1990 levels. In 2002 we said that that goal had been reached. We did that through reducing flaring and energy efficiency, and it was good business to do that. We also committed then to net emissions, being at those reduced levels in 2012. In the interim we intend to grow the business. So what we're going to try to do is break the paradigm of CO2 increases as business grows. But we intend to grow the business but not grow the CO2.

CO2 capture and storage is one of the methods that can be used to reduce the amount of CO2 that goes into the atmosphere. There are a lot of sources of CO2 that are pure. But most of the sources of CO2 are not pure. They are flue gas which ranges from five to 15 percent CO2. You can capture the CO2 from those flue gases, but it's expensive to do. And there are methods where you can make the exhaust gases higher concentrations of CO2. But there are a lot of pure sources around as well. But generally those are too small to do anything with. So what we want to do is capture the CO2 and inject it into subsurface formations first to do enhanced oil recovery which has a financial benefit, and later on when there's a carbon credit associated with it, into aquifers with idea one (ph).

But there's several pieces to geological sequestration. The first one is capturing and using high purity sources. If you have a pure source now there's nothing you can do with it. But if we create large pure sources and create a business around it, then people who have pure sources can monetize those sources as well. Then there's the transportation part and the geologic storage part.

There are two issues about this. The first one is the cost of the capture. It's too expensive now and we're trying to drive it down. The second one is the risk of geologic storage. Will it stay where we put it for a long period of time and not cause any damage to the environment? What we're trying to do is to reduce the cost and reduce the risk so that there will be less aversion to doing something like this. If you look at the wedges that Socolow talked about, a number of them are involved with efficiency. And we believe efficiency can go a long way but we don't believe it can all the way.

So how do you create a business environment that causes people to be interested in energy efficiency and CO2 reduction? We found that there's four key enablers that were necessary in our business to create that sort of environment. The first one you have to have the competency. People have to know how to do what's necessary. The second one is the technology. It has to be technically feasible with known technology. The third one is you have to have money. You have to set aside money to do these things. And then you have to have an organizational structure that makes it important. People's short term goals have to be tied to such a thing.

So we have put in place a process to drive energy efficiency and we've put in a web site that allows ideas to be identified and to be carried through a hopper so that we can choose the ones that are best for the business. Some of these are implemented right away by different business units that see this as advantageous to do. Others require more development to get to that point. And we have money set aside to do that.

The results so far have been very good for business. We have about 200 projects that have come out of this system that have been implemented world wide. They've been prioritized for commercial effectiveness. And we do them because they're commercially attractive. But the green house gas situation follows. Something happened to the first three letters of these words. Mr. Gates again.

So in order to get to where we are now into a different place in the future where we're in a more sustainable situation, BP is moving in a big way into alternative energy. We're currently the world's leading low carbon power business and we intend to move further in that direction. We've just announced $8 billion of investments over the next 10 years to create 10 projects that would create pollution free power and uses CO2 from that for enhanced oil recovery. One of those projects has been announced in Scotland. That was announced some time back. And the second project in the U.S. is going to be announced this Friday. So keep your eyes open for that. We expect this business to have an annual operating profit of a billion dollars within a decade. And we expect to cut green house gas emissions by 24 million tons a year by 2015.

We're growing solar power. BP is the world's third largest solar manufacturer and manufacturers about 100 megawatts a year or so of solar panels. We plan to double that capacity by 2006. And we have new joint ventures that will more than triple that capacity. We're growing our wind power. We have two wind farms now and we've identified a lot of places that have wind potential. So BP is getting big in the wind business.

We're growing our gas business. That business is a really good business. We are participating in a number of power projects. We currently participate in 13 gigawatts of gas fired power plants in the U.S., Vietnam, South Korea and Spain. BP is a medium size utility in the electric industry already. We also intend to develop another 200 megawatts of gas fired power by 2008. And we are one of the leading traders in carbon credits.

We're growing our hydrogen power business. We announced, as I mentioned, the first hydrogen power plant, with carbon capture and sequestration in Scotland. We call that our DF-1 project. That means de-carbonized fuels. We plan to announce others and the next one will be announced in the U.S. on Friday.

So we believe the risks to uncontrolled emissions of CO2 are real. We believe that precautionary measures should be taken now to significantly reduce those emissions. It's obvious that there's no single solution to the problem that can work. But we believe that a realistic transition can be made to a more sustainable future while still upholding our standard of living. And we intend to be a very real force in driving that transition. Thank you.

MEAD TREADWELL: Alaskans are very familiar with the concept of cap and trade, the idea of quotas and sharing quotas because we've done that in our fishing industry now for years. And Kellee James, our next speaker from Chicago, is going to talk about how the climate quota trading system may also effect us. Thank you.