This article was lightly updated on 27 May 2020 to reflect the impact of coronavirus and the associated oil price crash.
4 February 2020 was Bob Dudley’s last day as CEO of BP. Unfortunately, the company’s quarterly results, issued on the same day, were not particularly good, but he has nevertheless been declared business person of the year by the Sunday Times. Is it possible that Bob Dudley is indeed the businessman of the year, 2019? Only if you have rather low expectations of business people.
Dudley’s main achievement came not last year but last decade, when BP foundered on the rocks of Deepwater Horizon. Sharks were circling but he managed to keep the company afloat despite the oil rig disaster costing $65 billion. BP came out the other side looking a lot healthier than the marine life that has died off or suffered deformities, and the local fishing communities.
But perhaps his ability to navigate that particular pollution problem led to an unfortunate over-confidence in BP’s ability to spin its way out of the current environmental crisis.
Millions spent on lobbying against climate legislation
BP is spending around £30 million a year on greenwashing itself as a climate-friendly company. But this is overshadowed by the £50 million they spend each year on lobbying against legislation which might actually help deal with climate change. This is primarily in the US, where the company has most of its assets, but also the EU.
They successfully lobbied against emission controls for fracking, against restrictions on drilling in sensitive wilderness areas, and against the EU’s adoption of a net-zero target date. They also lobbied for the recent weakening of the National Environmental Policy Act in the US.
But if you were trying to deduce BP’s priorities from their expenditure, you wouldn’t need to bother digging down into their public affairs department’s balance sheet. Prior to the onset of COVID-19 measures and the oil price crash, BP had planned to spend $71 billion developing new oil and gas. That’s oil and gas we cannot afford to burn, often from fragile habitats – and the $71bn figure makes everything else look like a rounding error. Its business plan takes us to a world which many ecosystems, and human civilisation, could not endure.
BP tries – and fails – to change its image
But Bob’s gone, and Bernie’s taken his place. No, not that Bernie. Bernard Looney, a BP lifer from their upstream (oil and gas production) division. Despite his carefully constructed image as a youthful new broom, Looney has been a player inside BP since before Dudley’s predecessor, the hapless Tony Hayward, replaced Lord John Browne.
It’s arguable that, as an upstream executive, he bears as much responsibility for some of BP’s misdeeds over the last decade as Dudley. But people can change, and so, according to Looney, can oil companies.
Looney has already been busy trying to draw a line under BP’s dirty history, and define a new era for BP as a climate conscious, environmentally responsible company. In exactly the same way BP has been regularly trying and failing to do for decades. But the world is now awake to the climate crisis, and BP’s role in creating it, in a way which makes this a much bigger priority (or PR challenge) for Looney than for his predecessors.
Sticking solar panels on petrol stations and using a bit more green in the corporate branding is unlikely to cut it this time. Nor is the $32 they invest in fossil fuels for every $1 they put into renewable energy. Or the dividends paid to shareholders which were a staggering 18 times more than the amount spent on clean energy. When the planet is burning, BP’s responsibilities extend far beyond maximising dividend payments.
No more oil
So what does he need to do to make BP genuinely climate-friendly? Stop being an oil company. That means no exploration for new oil and gas, anywhere, starting now. We already have 6% more gas and 9% more oil than we can afford to burn whilst staying under the 1.5°C threshold set at the Paris climate talks. If anyone is still in doubt that staying under 1.5°C should be a priority, have a look at the effect a 1.1°C rise is having on Australia’s environment.
Prior to the onset of COVID-19 measures and the oil price crash, BP had allocated $71 billion to new oil and gas this decade. This needs to be repurposed to get BP out of fossil fuels entirely. Dudley once famously remarked that if you gave him ten billion dollars to spend on renewable energy, he “wouldn’t know how to do it”. Looney needs to learn how, seven times over, and quickly. BP should be genuinely net zero, without any dodgy carbon accounting tricks, within a decade.
This is undeniably challenging, but the reason why we have so little time to decarbonise is because BP and its competitors have spent thirty years or more blocking action to protect the climate, and many hundreds of billions of dollars making the problem worse.