SALT LAKE CITY -- Carlos Cabrera knows the downstream
industry from many sides, from his former role as President of
UOP to his current position as Executive Chairman of heavy oil
development group Ivanhoe Energy and several other stops along
I come today as independent, he said in Monday
mornings keynote address. I hope to some degree I
can insult all of you, but also find some balance.
He did note, however, that one particular theme should unite
all downstream businesses: the need to redefine sustainability.
This is a business, and its all about having a
sustainable business, said Mr. Cabrera, speaking to a
diverse audience at the AFPM Q&A and Technology Forum. Im
offended by environmental groups that think anything
sustainable has to be environmental or green.
You, as the industry, have to recapture that term that
has been hijacked by environmentalists.
Mr. Cabrera said the hydrocarbon processing industry (HPI)
faces many regulatory hurdles to reach this goal, starting with
government-subsidized sectors such as several within
Sustainable means you have to be profitable in the
absence of government subsidies, he said. At the
end of the day, if you have a business, you have to have a good
and novel idea. You cant rely on them to give it to
Other priorities for companies to reach true sustainability, Mr. Cabrera said,
include having the capability to grow, the flexibility to adapt
to changing environmental and regulatory frameworks, and giving
an acceptable return to all stakeholders.
Those stakeholders are not just direct shareholders, he
warned, but also the communities served and employees, among
I have become very distressed in the last 10 to 15
years that some mega-companies in the US have taken to only
being concerned with shareholders and forgetting the other
players, Mr. Cabrera said.
Thats not a sustainable business.
Part of focusing on the communities served means
understanding new markets. In a world where OECD product demand
is flat or declining and non-OECD countries are seeing rapid
demand increases, access to growing markets is critical, Mr.
Our drivers in the industry were from a perspective of
affluence, but now its moving to poverty, he said.
Efficiencies are important, but its really a
low-cost world. We face a world where competitors are very
cheap just because of underlying economic conditions.
The key is low-cost, affordable energy.
For companies to meet those goals and become sustainable,
they need technology breakthroughs, according
to Mr. Cabrera. However, he cautioned that his experience tells
him that it can be very difficult to get new
technology in the oil industry.
Theres a natural risk aversion within the
industry, plus policy uncertainty can influence investment
decisions, Mr. Cabrera said.
To overcome those factors, developers should focus as
directly as possible on the most-needed areas. In the modern
HPI, Mr. Cabrera said those areas are in hydrocracking,
hydrotreating and desulfurization.
In the short-term, it keeps looking like a middle
distillate world, he said.
Technology breakthroughs are most needed in three specific
areas, according to Mr. Cabrera. Those are heavy oil processing
development, finding out how to efficiently and economically
handle cellulose, and determining new ways to activate methane
and convert abundant gas reserves to liquids.
Those are the potential game changers, he
For leadership personnel, Mr. Cabrera said those most
effective at creating and operating sustainable enterprises
will share several common traits. Those include the capability
to simplify and process complex government and market
They must be willing to take risk and act, he
Other needed traits include a willingness to change,
understand and accept responsibility to the public and
consumers; have a keen sense of who true competitors are, both
now, emerging and future; embracing and investing in technology and appreciating the
game-changing role it can play; and integrating multiple
sources of knowledge to motivate and influence all
Like any business, the HPI is complex and
challenging, Mr. Cabrera said. Threats and
opportunities are interrelated.
Mr. Cabrera closed his remarks by thanking AFPM for the
opportunity to speak, noting that it was his first time to
attend the conference in a few years.
Im proud to be back, he said.
When AFPM called me up, I didnt respond at first
because I didnt recognize [the new name], he
But Im so glad to be here. I see a lot of
friends and a lot of familiar faces. Ive spent a lot of
time with this group and am delighted to see that its
vibrant again under good leadership.
I see AFPM as a catalyst to deliver very, very good
things for the industry.