Samuel Webb
Tue, 7 February 2023
Environmental groups have condemned oil giant BP for slashing emissions targets when its profits hit record highs.
The company said that it had slashed its emissions reduction targets by a third, and will produce much more oil and gas by the end of this decade than previously thought – sparking fury from environmental groups and politicians.
BP said that profit reached £23 billion last year, just days after Shell reported its highest profit on record at nearly £33 billion.
Greenpeace UK’s head of climate justice Kate Blagojevic said: "Not only will BP’s new strategy fail to deliver much-needed energy security in the UK but it will ensure that people across the globe already battling devastating droughts, floods and heatwaves, will continue losing their lives and livelihoods."
Campaign group Global Justice Now said BP’s profit haul was "sickening" and called for a polluters’ tax.
Director Nick Dearden said: "It should sicken people to their core that BP is responsible for more global historic emissions than most countries on earth, yet has no plans to stop polluting even in the face of a global climate crisis.
Enough is enough. It’s time to bring in a polluters tax and hold BP truly accountable for the destruction they’ve wreaked across the planet.”
Connor Schwartz, climate campaigner at Friends of the Earth, said: “Inflation is soaring, real-terms pay has nosedived and energy bills are set to rise higher still in April.
“Fossil fuel companies shouldn’t be able to reap such massive profits while people are paying exorbitant energy costs.
Trades Union Congress general secretary Paul Nowak said BP was “laughing all the way to the bank”.
"Ministers are letting big oil and gas companies pocket billions in excess profits,” he added. “But they are refusing to give nurses, teachers and other key workers a decent pay rise."
Labour shadow climate change secretary Ed Miliband said: "What is so outrageous is that as fossil fuel companies rake in these enormous sums, Rishi Sunak still refuses to bring in a proper windfall tax that would make them pay their fair share.
"In just eight weeks’ time, the government plans to allow the energy price cap to rise to £3,000. Labour would use a proper windfall tax to stop prices going up in April."
Liberal Democrat leader Ed Davey said: "Yet another oil giant has been allowed to rake in huge profits from (Vladimir) Putin’s illegal invasion of Ukraine, while families choose between eating and heating.
"Rishi Sunak has failed the people of this country by ignoring calls for a proper windfall tax. "This Conservative government need to start putting people first instead of allowing energy bills to rise again this April.’’
BP had been one of the first oil and gas majors in the world to announce an ambition to cut emissions to net zero by 2050.
As part of this, it has previously promised that emissions will be 35-40 per cent lower by the end of this decade.
However, on Tuesday the company said it was significantly revising this target to a 20-30 per cent cut.
Boss Bernard Looney said it was about investing in both the transition and the energy that is needed today as he announced an extra $8 billion (£6.6 billion) for oil and gas investment by 2030 and another $8 billion for transition projects.
"With today’s announcement we are leaning further in," he said.
"We are growing our investment into our transition and, at the same time, growing investment into today’s energy system.”
BP said that it now plans to cut oil and gas production by just 25 per cent by the end of 2030 when compared to 2019. The previous target had been a 40 per cent cut.
Why BP is cutting back on its climate goals
Joel Mathis, Contributing Writer
Wed, 8 February 2023
oil barrels. Illustrated | Gettyimages
The road to a carbon-free world just got a little bumpier. BP — the energy company that pledged in 2020 to slash its carbon emissions to net zero — this week announced that its transition to renewable energy will slow down. Instead, The Wall Street Journal reports, the company is going to increase its spending on oil and gas after earning nearly $28 billion in profit for 2022. "At the end of the day, we're responding to what society wants," said Bernard Looney, the company's CEO. Critics say the decision will make it more difficult for the world to slow the rate of climate change. "Just when we need to be rolling back oil & gas production @BP_plc is rolling back its climate commitments," tweeted Doug Parr, the chief scientist for Greenpeace UK. Why is BP backing off its climate commitments? Here's everything you need to know:
What were BP's climate goals?
Even though it's a giant oil and gas company, BP has long tried to present an environmentally friendly image to the public: It even changed its name from "British Petroleum" in 2000 to de-emphasize the whole oil thing — the BP supposedly stood for "beyond petroleum" — and even helped popularize the idea of a "carbon footprint" in an early 21st-century advertising campaign. (Critics said the concept tried to shift the blame for climate change from big oil companies like, well, BP to individual consumers.) And in 2020, the company declared it would slash the carbon content of its products in half by 2050, largely by shifting to renewable energy products. There was skepticism, The Washington Post noted at the time. "It means BP is fundamentally promising to become a completely different kind of energy company by 2050," said Columbia University's Jason Bordoff. "Now we need its actions to live up to its promises."
So what changed?
BBC News reports that BP was aiming for at least a 35 percent carbon reduction by the end of this decade — that goal is now targeting a cut of somewhere between 20 and 30 percent. Why? "The shift follows a tumultuous year in energy markets driven by Russia's war in Ukraine that supercharged the industry's profits and drove up costs for households," the Financial Times reports. Looney says the moment calls for his company to drill and deliver more oil and gas to the market right now: "Governments and societies around the world are asking companies like ours to invest in today's energy system," he said. But FT also suggests that BP's climate goals have — despite the big profits that remain — undermined the company's value with shareholders. "Total shareholder returns since Looney took the helm in February 2020 have been the lowest among" major oil companies. And none of those companies have set a hard target to reduce carbon emissions. That means there's pressure to produce bigger returns, and also to back away from measures — like climate goals — that get in the way.
How are those other energy companies doing?
Exceedingly well, financially. Shell made $39 billion in profits in 2022 — the highest in its 115-year history, and more than double the previous year's returns. Chevron made $36 biExxon did even better: $56 billion in profits, which Reuters calls "a historic high for the Western oil industry."
What are critics saying?
BP's decision to cut back on its climate commitments — and the oil industry's mind-bending profits — have naturally produced pushback from climate activists. "It's astounding that in the middle of a climate emergency BP is planning to invest billions more dollars on planet-warming fossil fuels than on clean, green renewables." Friends of the Earth's Mike Childs tells The Guardian. In the UK, at least, there has been growing talk of putting teeth into a windfall tax on oil companies' global profits. There are big obstacles: Jeremy Hunt, the government's treasury minister, said this week he won't raise the tax. "Anything higher will stop investment, increase dependence on Putin and increase energy prices," he said. In the United States, California is also considering a windfall tax on oil companies. But while the Biden Administration has criticized the big oil profits, it's not clear that any federal action is forthcoming.
What's next?
More warming, and more drilling. The two are related. On Tuesday, the United Nations released a report — "Bracing for Superbugs" — saying global warming is contributing to the rise of bacteria, viruses, and fungi that can defeat medications that neutralize them: As many as 10 million people a year are expected to die from such infections by 2050. In the meantime, though, Bloomberg reports that BP's strategy involves "adding drilling capacity in the Gulf of Mexico, the North Sea and the Permian shale formation in the U.S." But at least one expert says that what goes up must come down. "This is a temporary situation," former BP executive Nick Butler tells BBC. "Oil and gas prices are going down and the windfall these companies are making won't last."
Joel Mathis, Contributing Writer
Wed, 8 February 2023
oil barrels. Illustrated | Gettyimages
The road to a carbon-free world just got a little bumpier. BP — the energy company that pledged in 2020 to slash its carbon emissions to net zero — this week announced that its transition to renewable energy will slow down. Instead, The Wall Street Journal reports, the company is going to increase its spending on oil and gas after earning nearly $28 billion in profit for 2022. "At the end of the day, we're responding to what society wants," said Bernard Looney, the company's CEO. Critics say the decision will make it more difficult for the world to slow the rate of climate change. "Just when we need to be rolling back oil & gas production @BP_plc is rolling back its climate commitments," tweeted Doug Parr, the chief scientist for Greenpeace UK. Why is BP backing off its climate commitments? Here's everything you need to know:
What were BP's climate goals?
Even though it's a giant oil and gas company, BP has long tried to present an environmentally friendly image to the public: It even changed its name from "British Petroleum" in 2000 to de-emphasize the whole oil thing — the BP supposedly stood for "beyond petroleum" — and even helped popularize the idea of a "carbon footprint" in an early 21st-century advertising campaign. (Critics said the concept tried to shift the blame for climate change from big oil companies like, well, BP to individual consumers.) And in 2020, the company declared it would slash the carbon content of its products in half by 2050, largely by shifting to renewable energy products. There was skepticism, The Washington Post noted at the time. "It means BP is fundamentally promising to become a completely different kind of energy company by 2050," said Columbia University's Jason Bordoff. "Now we need its actions to live up to its promises."
So what changed?
BBC News reports that BP was aiming for at least a 35 percent carbon reduction by the end of this decade — that goal is now targeting a cut of somewhere between 20 and 30 percent. Why? "The shift follows a tumultuous year in energy markets driven by Russia's war in Ukraine that supercharged the industry's profits and drove up costs for households," the Financial Times reports. Looney says the moment calls for his company to drill and deliver more oil and gas to the market right now: "Governments and societies around the world are asking companies like ours to invest in today's energy system," he said. But FT also suggests that BP's climate goals have — despite the big profits that remain — undermined the company's value with shareholders. "Total shareholder returns since Looney took the helm in February 2020 have been the lowest among" major oil companies. And none of those companies have set a hard target to reduce carbon emissions. That means there's pressure to produce bigger returns, and also to back away from measures — like climate goals — that get in the way.
How are those other energy companies doing?
Exceedingly well, financially. Shell made $39 billion in profits in 2022 — the highest in its 115-year history, and more than double the previous year's returns. Chevron made $36 biExxon did even better: $56 billion in profits, which Reuters calls "a historic high for the Western oil industry."
What are critics saying?
BP's decision to cut back on its climate commitments — and the oil industry's mind-bending profits — have naturally produced pushback from climate activists. "It's astounding that in the middle of a climate emergency BP is planning to invest billions more dollars on planet-warming fossil fuels than on clean, green renewables." Friends of the Earth's Mike Childs tells The Guardian. In the UK, at least, there has been growing talk of putting teeth into a windfall tax on oil companies' global profits. There are big obstacles: Jeremy Hunt, the government's treasury minister, said this week he won't raise the tax. "Anything higher will stop investment, increase dependence on Putin and increase energy prices," he said. In the United States, California is also considering a windfall tax on oil companies. But while the Biden Administration has criticized the big oil profits, it's not clear that any federal action is forthcoming.
What's next?
More warming, and more drilling. The two are related. On Tuesday, the United Nations released a report — "Bracing for Superbugs" — saying global warming is contributing to the rise of bacteria, viruses, and fungi that can defeat medications that neutralize them: As many as 10 million people a year are expected to die from such infections by 2050. In the meantime, though, Bloomberg reports that BP's strategy involves "adding drilling capacity in the Gulf of Mexico, the North Sea and the Permian shale formation in the U.S." But at least one expert says that what goes up must come down. "This is a temporary situation," former BP executive Nick Butler tells BBC. "Oil and gas prices are going down and the windfall these companies are making won't last."
BP vowed to help set the oil and gas industry on a greener path. Many who bought in now feel betrayed
Vivienne Walt
Tue, 7 February 2023
When BP appointed Bernard Looney as CEO exactly three years ago, climate activists believed they might finally have an ally within Big Oil, after decades of deep distrust of the energy industry. Looney—Irish, from a poor farming family—broke the mold of Britain’s century-old company in more ways than one: He vowed to turn BP into a green energy giant, by drastically cutting oil and gas production and plowing billions into renewables. “This is the first oil major to walk the walk,” Mark van Baal, founder of the Amsterdam-based shareholder activist organization Follow This, told Fortune at the time. “If one oil major breaks ranks, and shareholders reward them for it, others will follow.”
That optimism shattered on Tuesday, when BP became the latest oil supermajor to report record-high profits for 2022—while announcing, at the same time, a sharp rollback of its climate targets.
Thanks in part to soaring gas and oil prices over the past year, BP’s underlying profits more than doubled in 2022, to $27.7 billion. (Its exit from Russia, where it had a 19.75% stake in Rosneft, cost the company $24 billion, leaving it with a paper loss after taxes of $2.5 billion.)
Dramatic rollback
Despite the bumper year, however, Looney announced BP would dramatically roll back his key climate promise, which he made in 2020. That year, Looney pledged 40% cut in carbon emissions from BP’s oil and gas production by 2030. He argued that those dramatic shifts were urgent. “Without action, it is a rather bleak future for the world,” he told Fortune in 2020, echoing a central point that environmentalists had made for years.
But on Tuesday, he said that BP’s drop in emissions would likely be a more modest 20% to 30%. “We need continuing near-term investment into today’s energy system,” Looney said, adding that the energy transition has to be “an orderly one.” The company also said it would invest about $1 billion a year in oil and gas production—an apparent about-face from Looney’s earlier statement that the company would steadily reduce its involvement in fossil fuels.
To climate activists, that felt like a knife in the back. “BP’s aim to reduce absolute emissions from their own production was one of the few tangible targets in the entire oil industry,” van Baal told Fortune on Tuesday. “They made enormous profits, and they’re back in their comfort zone,” he says. “They want to hang on to their old business model as long as possible, because it is profitable.”
'Back in their comfort zone'
Van Baal says he will push for far-reaching cuts in fossil-fuel production, in resolutions that Follow This will put forward during Big Oil’s annual shareholder meetings this spring. In a meeting in late 2019, Looney persuaded Van Baal to withdraw a similar resolution, saying he wanted to work with him to roll out climate action within BP, according to Van Baal. Activists believe such resolutions have prompted oil companies to set carbon-emission targets for fear of alienating investors, who increasingly regard climate change as a major risk factor.
BP’s earlier commitments suggested that “the pressure climate-conscious investors were putting on the industry was having an impact,” said Kathy Mulvey, of the Union of Concerned Scientists, an environmental group in Cambridge, Mass. Now, she says, she believes “BP’s climate pledges have been cynical, empty, and opportunistic.”
'Energy trilemma'
Looney argues that the Ukraine war and rising inflation showed how important it was to have a steady flow oil and gas supplies. In a LinkedIn post, he said BP would focus its oil and gas investments on low-cost production. “The world wants and needs energy that’s secure and affordable, as well as lower carbon,” he said, calling it “the energy trilemma.”
Environmentalists said Looney was sugar-coating his rollback of climate commitments. “I’m sorry to say this is a huge disappointment,” Helena Farstad, cofounder and director of London-based climate branding company This is Agency, said in a response on LinkedIn. “BP has demonstrated its lack of leadership.”
This story was originally featured on Fortune.com
Vivienne Walt
Tue, 7 February 2023
When BP appointed Bernard Looney as CEO exactly three years ago, climate activists believed they might finally have an ally within Big Oil, after decades of deep distrust of the energy industry. Looney—Irish, from a poor farming family—broke the mold of Britain’s century-old company in more ways than one: He vowed to turn BP into a green energy giant, by drastically cutting oil and gas production and plowing billions into renewables. “This is the first oil major to walk the walk,” Mark van Baal, founder of the Amsterdam-based shareholder activist organization Follow This, told Fortune at the time. “If one oil major breaks ranks, and shareholders reward them for it, others will follow.”
That optimism shattered on Tuesday, when BP became the latest oil supermajor to report record-high profits for 2022—while announcing, at the same time, a sharp rollback of its climate targets.
Thanks in part to soaring gas and oil prices over the past year, BP’s underlying profits more than doubled in 2022, to $27.7 billion. (Its exit from Russia, where it had a 19.75% stake in Rosneft, cost the company $24 billion, leaving it with a paper loss after taxes of $2.5 billion.)
Dramatic rollback
Despite the bumper year, however, Looney announced BP would dramatically roll back his key climate promise, which he made in 2020. That year, Looney pledged 40% cut in carbon emissions from BP’s oil and gas production by 2030. He argued that those dramatic shifts were urgent. “Without action, it is a rather bleak future for the world,” he told Fortune in 2020, echoing a central point that environmentalists had made for years.
But on Tuesday, he said that BP’s drop in emissions would likely be a more modest 20% to 30%. “We need continuing near-term investment into today’s energy system,” Looney said, adding that the energy transition has to be “an orderly one.” The company also said it would invest about $1 billion a year in oil and gas production—an apparent about-face from Looney’s earlier statement that the company would steadily reduce its involvement in fossil fuels.
To climate activists, that felt like a knife in the back. “BP’s aim to reduce absolute emissions from their own production was one of the few tangible targets in the entire oil industry,” van Baal told Fortune on Tuesday. “They made enormous profits, and they’re back in their comfort zone,” he says. “They want to hang on to their old business model as long as possible, because it is profitable.”
'Back in their comfort zone'
Van Baal says he will push for far-reaching cuts in fossil-fuel production, in resolutions that Follow This will put forward during Big Oil’s annual shareholder meetings this spring. In a meeting in late 2019, Looney persuaded Van Baal to withdraw a similar resolution, saying he wanted to work with him to roll out climate action within BP, according to Van Baal. Activists believe such resolutions have prompted oil companies to set carbon-emission targets for fear of alienating investors, who increasingly regard climate change as a major risk factor.
BP’s earlier commitments suggested that “the pressure climate-conscious investors were putting on the industry was having an impact,” said Kathy Mulvey, of the Union of Concerned Scientists, an environmental group in Cambridge, Mass. Now, she says, she believes “BP’s climate pledges have been cynical, empty, and opportunistic.”
'Energy trilemma'
Looney argues that the Ukraine war and rising inflation showed how important it was to have a steady flow oil and gas supplies. In a LinkedIn post, he said BP would focus its oil and gas investments on low-cost production. “The world wants and needs energy that’s secure and affordable, as well as lower carbon,” he said, calling it “the energy trilemma.”
Environmentalists said Looney was sugar-coating his rollback of climate commitments. “I’m sorry to say this is a huge disappointment,” Helena Farstad, cofounder and director of London-based climate branding company This is Agency, said in a response on LinkedIn. “BP has demonstrated its lack of leadership.”
This story was originally featured on Fortune.com
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