Fossil companies will need to see market-shifting government policies from governments to move more quickly toward a low-carbon economy, BP Group CEO Bob Dudley told the Oil & Money conference in London, UK earlier this week.
“The global commitment to action feels different, and the national pledges are a good start,” Dudley said of the 2015 Paris agreement. “But, frankly, we need even stronger and clearer signals to create the confidence to invest in and grow low-carbon businesses at scale.”
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Dudley traced his company’s focus on climate change back 20 years, to a Stanford University speech by then-CEO John Browne that acknowledged the science and the threat “out loud and in public”. Browne committed to real action, Dudley recalled, even attempting to rebrand the company “Beyond Petroleum”.
But “while the company grew a portfolio of wind farms in the U.S. and biofuels in Brazil, it largely backed out of other renewable ventures over the past decade,” JWN Energy notes. “Dudley conceded many of BP’s original investments didn’t pan out, but maintained it is still the biggest operator of renewables among the supermajors.”
He now maintains that BP moved at the time in anticipation of decisive government action, but “policy changes didn’t happen at the pace we expected, despite the excitement around the Kyoto Protocol and the Earth Summit in Johannesburg.” And “then came the financial crash in 2007/8 and a big change of focus for the world—from green energy to cheap energy.”
Now, in lieu of “large speculative investments,” BP is opting for “as much optionality as possible to back winners as they emerge,” he told conference participants. “The showcase speeches, advertising campaigns, and billion-dollar bets of the past have been replaced by a quieter, but still steadfast commitment to helping address the climate challenge, while pursuing lower carbon more organically.”
As examples, he cited methane controls on the company’s fossil facilities, a move into “renewable natural gas”, efforts to produce aviation fuel from household waste, and investments in low-carbon concrete production and carbon capture, use and storage.
But the company’s broad strategy through 2020 focuses on more than a dozen new natural gas projects by 2020, reflecting the assumption that renewables will only supply 10 to 30% of global energy requirements in 20 years.
