Lord Browne outlines the challenge facing business

FORMER BP boss Lord Browne has warned that despite the huge challenges posed by the economic downturn, businesses need to start planning now to use alternative energy sources.

Speaking at a Corporate Wisdom lecture entitled Energy & Change at Leeds University Business School last night, Lord Browne, who is the managing partner of the London office of US private equity firm Riverstone, said that the current financial crisis was one of the greatest challenges of our time.

But he told the audience of Yorkshire business leaders that business must face up to other issues.

“After 40 years in the energy business I cannot remember a time when concerns have been so high,” reflected Lord Browne, who stepped down as CEO of BP last year.

“I agree with those that say that high energy prices are exacerbating the current situation. We are witnessing both downward and upward pressure on the oil price at the same time. The only thing we can say for certain is that energy prices will continue to vary.”

With 80% of the world’s oil production coming from three regions – Africa, Russia and the Caspian Sea and the Persian Gulf – Lord Browne said that the move towards alternative energy sources such as biofuels was more significant than ever before.

And he said that it would mean “policy and politics will become more important in energy everywhere”.

“The world’s energy mix, having been static over the last four decades will become increasingly diverse,” he said. “Much of the bad publicity about biofuels is unjustified.”

Lord Browne said that 1,500 venture capital firms are currently researching clean technology.

“Energy efficiency improvements are changing consumer behaviour. Carbon will become a core economic concern for all businesses increasingly. There is global momentum building behind carbon pricing policies.”

He said that carbon markets were worth $58bn globally last year and would be much bigger if the US put a scheme in place.

“It will impose costs on conventional energy sources. The key is to replace high carbon options with low carbon options.

“I predict that we will see renewable and alternative energy majors in the Fortune 500 soon,” said Lord Browne, who has been voted the most admired CEO by his peers on several occasions.

Corporate Wisdom was held in association with headhunters Whitehead Mann and sponsored by Yorkshire Forward and Marketing Leeds.