BP’s answer to climate emergency: shed staff

Generic picture of oil refinery

When BP announced on Monday that it would shed 10,000 staff by the end of the year because of a drop in demand for oil and investing more in renewable energy forms, on a drive towards being carbon neutral, it raised many more questions than it answered.

CEO Bernard Looney wrote up on LinkedIn what he had told staff in his briefing. It became listed as an “editor’s choice” story on the news feed of the business social networking site.

Commentators offered many viewpoints. One was that this shedding of staff was inevitable. It was merely delayed from March and in fact the company’s line about there being a drop in demand for oil pre-dated the Covid-19 crisis, when there was a large drop in demand for oil.

Readers might have noticed that there were far fewer aeroplanes, that far fewer people drove – including to work – and the petrol prices dipped to about £1.00 per litre at the pumps.

Oil prices, Looney said, were plunging to below levels the company needed to make profit. Shell and Chevron are also likely to shed jobs, the Telegraph then reported. Britain has been coal free for two months, reported the BBC. Renewables, it is also reported, have produced more power to the grid in the UK this year than fossil fuels.

What percentage of employees was BP shelling? About 15% of roughly 70,000 BP staff worldwide.

The unanswered questions in Looney’s address, however, were the more interesting.

Why did they need to get rid of them all from administrative jobs if they are shifting to a carbon neutral outlook? Surely based on renewables? (Another report this week says that a shift to 90% renewable energy, industry wide in the energy sector, is not only feasibly but would be cheaper.) Are not office staff needed for whatever renewables BP offers? The ones it is surely developing? It can’t be much of a shift, surely, if 15% of the administrative staff have to leave? What are the investment total in fossil fuels at BP, compared to renewables?

So how much, exactly, of BP’s focus is on renewable energy power systems? Looney didn’t specify, and nor does a report in nsenergybusiness.com, which nevertheless gives us an industry wide view. Big Oil – the big six or seven oil companies in the world, which include BP – will invest “just” $18bn on solar and wind projects in the next five years. But they will continue to invest in oil and gas, to the tune of $166bn. CityAM reported at the turn of the year that 15 of the world’s biggest oil companies, including BP, invested just 3% of their capital expenditure in renewables in 2018.

Various reports talk of an “energy transition” from fossil fuels to renewables across the energy industry. But those Big Oil companies don’t seem particularly committed, if just 11% of their investments will be in renewables over the next five years. That won’t help achieve the global warming limit targets, through carbon emission reductions, by 2035 – or 2025 – that are demanded by various environmental groups, to keep global warming to below 1.5% or even 2%.

BP trumpets on its website’s renewable energy pages that it has taken a 50% stake in Lightsource, which aims to develop 10GW of solar projects by 2023, with Lightsource investments costing $8bn. It highlights that renewables represent half the growth of global and that BP wants to be part of this market share. Another statistic says this market share will rise from 4% in 2019 to 15% in 2040.

But BP announced its “beyond petroleum” campaign 21 years ago and it proved a false dawn. Now, it has upped its stake in Lightsource to a 50:50 split, to re-enter the solar market having pulled out of it in 2011.

According to the Carbon Disclosure Project (CDP) production and use of oil and gas accounts for half of the world’s carbon emissions. BP is prominently listed among the culprits. That statistic of half the world’s carbon emissions is despite the fact that demand for energy from renewable sources seems to be going up: for example, the UK grid being heavily supplied by them – about 40% according to the reports in the links above. Spend on alternative energies, says CDP, is $22bn since 2017.

BP promises, when making people redundant, to furnish them with laptops and career coaching and skills, so as to help them find new jobs. Why doesn’t it spend that money retraining them for the company’s renewable energy transition? Does the production and management of wind and solar power not require administrative jobs? What are these jobs that will be shed, exactly? How much time, effort and money is BP really investing in renewable energy?

Alternatively, is it the truth that solar and wind farms are not really a top priority for BP or other oil and gas companies? Afterall, the previous BP CEO Bob Dudley said: “If someone said here’s $10bn (£7.6bn), go invest it in these new energy technologies, for the good of our shareholders we’re not confident enough to be able to do that yet.”

While shareholder proposals for green initiatives at polluting companies have doubled between 2014-18 (CDP again) is the world at large – outside oil and gas companies – really serious about reducing greenhouse emissions?

Authorities in Queensland, Australia recently made “another” 1500km2 available for gas exploration. Imagine, rather than “exploring” something that might not come off, that the acreage could be turned into a solar farm or wind farm. With battery storage powers ever increasing, it could probably generate enough energy to power the entire state permanently. Of course, they can sell gas and oil to a wider area. Perhaps in time they could do that via wind and solar farms: after all, energy from those is fed to the grid in Britain.

We don’t need nearly as much oil as we are pulling from the ground, at the expense of climate change. Yet the oil and gas companies are not about to let the opportunity to explore untapped areas die, even though in many countries we have moved on from coal, another pollutant. It is not in the narrow interests – or nature – of oil and gas companies to invest in clean energy, only to further explore what they know.

And this is the point. As Naomi Klein makes in her book This Changes Everything, and continues to do so on the website of the same name: a huge shift in the economy is needed, yet society is too based around the current economy to get its head around a shift. BP are shedding 15% of their workforce, not redeploying them into renewable energies, which are nowhere near 15% of their planned investments, if an average of Big Oil is taken. Yet they insist these staff reductions are part of a “transition” towards becoming carbon neutral. As long as they pull oil and gas out of the ground, they will be the cause of carbon emissions.

Contrast them with Orsted, a wind farm company based in Denmark and the UK, who are ranked the most sustainable company in the world, as previously mentioned. A decade ago, they were ranked one of the most fossil fuel intensive companies in Europe. Now, they actively campaign and ask people to demand clean energy from their governments, from industry, at home and in the work place.

They still use some coal, but they aspire for the world to be run entirely on green energy. Even when their name was still Dong (their change in focus brought a rebrand) they were aiming to cut their coal use. Since 2006, they have reduced it by 73% and they will eradicate its use entirely by 2023.

They were a company willing to change, among a field of oil and gas polluters who are paying lip service to a real “transition” to clean energy. One against many. Almost a mirage in the desert. An army of 6,500 people standing against millions employed by oil and gas companies, yet revenues were a healthy €9bn in 2019. Healthy, one might say, in many ways.

Imagine instead of a private company drilling for gas in Queensland, the state employed manufacturers, engineers, installers, salesmen and marketers to run and develop a solar powered enterprise in their own back yard. Or gave a private company licence to do so. Perhaps even one led by the community. That would bring these promised “green” jobs that activists seek – and reduce swathes of our carbon emissions at the same time.

BP have missed the opportunity to make an Orsted-style transformation by redeploying staff into renewable energy projects, in order to tackle the climate emergency. And the oil and gas industry’s investments in renewable energies remains minimal compared to its continued investments in its core business, in a modern world of energy in which Scotland has just opened up more seabed room for a new generation of wind power off its coast, a project costing £8billion, bringing countless new jobs and saving six million tonnes of CO2.