Soon after taking over in 2007, British Petroleum’s (BP) newly appointed chief executive told an audience of business students at Stanford University that he thought too many people at the company were “trying to save the world.”
Tony Hayward’s comments were intended to set the tone for his tenure at the helm of Britain’s third-largest company, but those words have returned to haunt him this week as BP struggles to contain one of the darkest chapters in its history — a massive oil spill in the Gulf of Mexico that has led to a state of emergency in Louisana.
His speech went down well. Hayward’s focus on core values — on oil and gas as the only credible source of long-term profit — was a welcome relief to industry observers. His predecessor had made worrying statements about BP becoming an “energy company,” able to exploit the anticipated growth in clean technology to deliver a business model suited to a carbon-constrained world. An attractive green logo had been unveiled, the words “beyond petroleum” inserted elegantly beneath.
‘BEYOND PETROLEUM’ NO MORE
Fast forward to this year and BP’s alternative energy division has been left to wither on the vine. The solar business is a distant memory and this year the company has allocated less than US$1 billion to its entire low-carbon portfolio, now mainly comprised of biofuels. In contrast, the company is planning to spend 20 times that amount extracting oil and gas from increasingly unconventional sources, including the tar sands of Canada.
The success of this strategy relies on acquiescence by political leaders in the countries in which BP operates. Under former US president George W. Bush the need for lobbying muscle was minimal, but since the arrival of US President Barack Obama, BP has poured millions into Washington, mainly through third-party lobby groups.
Organizations such as the American Petroleum Institute, funded in part by BP, have done the company’s dirty work for it. Supposedly spontaneous citizen demonstrations against climate legislation have sprung up around the US, before journalists revealed they were actually populated by employees of the oil companies themselves.
The climate bill that had, until recently, a sliver of Republican support paid a heavy price for this cross-party endorsement in terms of funding for a series of environmentally dubious projects. The most controversial concession now looks almost certain to be reconsidered — the opening up of the coastal waters of the US to offshore drilling.
DISREGARDING SAFETY
As officials in Louisiana begin to face the reality of the spill that has now reached their fragile coastline, many will be asking if BP did everything in its power to prevent this kind of accident. Reports last week suggest that last year a senior BP executive lobbied against mandatory safety codes for offshore drilling, arguing that the regulation would be too onerous and would slow down the construction of new rigs. Industry pressure had the desired effect, but it will be up to accident investigators to decide if a code could have helped avoid the initial explosion on April 20.
What BP will never admit, among their glossy brochures and extensive environmental assessments, is that its entire business model is predicated on an ever-increasing demand for oil, decades into the future. These growth predictions rely on a world in which there is no collective action to tackle global emissions, no concerted effort to transfer clean technology to the developing world and almost no chance of maintaining anything like a stable climate.
As more oil drifts toward the critical wetlands of the Mississippi Delta, we must hope that the more thoughtful members of BP’s board will feel obliged to question the wisdom of a strategy that is, at its core, unchanged since the opening decades of the 20th century.
John Sauven is executive director of Greenpeace UK.
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