The urgency of tackling climate change has never been clearer. The increased prevalence and severity of natural disasters, ever-stronger evidence on rising temperatures in the future and mounting advocacy for net zero have all pushed stakeholders to follow calls for reducing contributions to global warming or face public scrutiny and government regulation.
British Petroleum (BP) have long been criticised for contributing to climate change (as many energy producers are). Their ambitious 2020 commitment to cut their production of oil and gas by 40% by 2030 was welcomed by campaigners, but recent news has thrown optimism off course.
BP turns away from cutting emissions
Initially reported by Reuters, BP Chief Executive, Murray Auchincloss has recently announced that they will be going back on their earlier commitments to cut oil and gas production, in favour of targeting the middle east for further energy production.
Despite the aim to rebrand as a green energy champion, cutting oil and gas drastically would always strike fear into shareholder’s hearts. As reported by the FT in May 2024, the rowing back of climate ambitions had been prepared for a while. A combination of high oil prices and high interest rates greatly decreased the appeal of investing in new renewable energy sources.
But as BP receives backlash, is this fair criticism of one large organisation putting the environment as a low priority, or is this systemic of a wider issue when it comes to tackling the climate crisis?
Not Just BP, the Whole Private Sector?
As one of the global giants of energy production, and one of the two giants based in the UK, it is expected that the energy news cycle has been dominated by the recent announcement. But is this just BP’s problem?
To their credit, BP was the first (and only) major energy supplier to make such an ambitious pledge on cutting oil and gas use. BP accounts for around 10% of overall oil and gas production – reducing this by 40% would mean a sizeable decrease in global oil and gas production and was an ambitious target to begin with. Perhaps their recent move was less of a turning away from environmentalism, but more promoting realism as part of their strategy.
Furthermore, BP is not the only company looking to invest in Middle-Eastern oil and gas production. ExxonMobil has also discussed exploration plans in Egypt, with BP. Two weeks ago, Petronas secured an exploration block in Abu Dhabi. Even in the UK, new North Sea gas licenses were offered in 2023, and whilst Labour have now blocked the issuance of new licenses, those 2023 licenses will lead to more gas production.
Was the 2020 pledge from BP made to spearhead a new push for fighting climate change, or was it too ambitious, and did its efforts to lead the private sector backfire, requiring it to review its strategy?
Not just BP, but Whole Governments too?
Whilst many see Governments as the bodies who can best push for green investment through tax incentives, direct investment or regulation, on energy and climate policy, the UK has seen a number of setbacks.
- In April 2024, Mairi McAllan, SNP, told the Scottish Parliament that the Scottish Government would scrap its annual target for cutting greenhouse gas emissions, to address the concerns of the Climate Change Committee.
- The Conservatives, when in Government, turned their back on the policy to phase out petrol and diesel cars by 2030
- The Labour Party, when in Opposition decreased the amount it was pledging to spend on the green transition from £28bn to around £22bn (although the exact investment figures planned by the Government will be announced at the 30th October Autumn Budget)
Even hardline politicians, led by MPs including Liz Truss and Jacob Rees-Mogg, have called for policies including scrapping the 2050 net zero target.
Final Thought
Is it fair to blame BP, who many may argue were only trying to push industry towards ambitious actions on climate change? Or can we expect BP, a world-leading business with billions of profits made every year, take up more of the fight against climate change, as a player with broad shoulders?
Discussions as part of Chamber UK’s Diversity Night, held at Labour Party Conference and attended by Curia’s Industrial Strategy Research Group, may shed some light. With sponsors including Electrify Industry and the Energy Efficiency Infrastructure Group, and speakers including Chair of the Energy Security and Net Zero Select Committee, Bill Esterson MP, conversations flowed on how a new Government can accelerate and support the green transition, and be a global leader in the fight for climate change.