Sun sets on Big Oil
Has BP finally gone beyond greenwash? The oil giant has rolled out some eye-catching pledges lately – most notably an unprecedented proposal to cut its oil and gas production by 40 per cent by 2030, in order to reach ‘net-zero emissions’ by 2050. The news has earned BP a heap of positive press – and a share-price bounce. But all is not quite what it seems.
To start with, that supposed 40-per-cent production cut drops to 28 per cent once you include the oil and gas extracted via BP’s partnership with the notoriously spill-happy Russian state oil company Rosneft. That’s less than a 3-per-cent reduction per year, which simply isn’t good enough – figures from financial thinktank Carbon Tracker suggest we need to at least halve global fossil-fuel use by the early 2030s, and phase the stuff out completely by the 2040s – and that’s for a 50-per-cent chance of keeping warming at 1.5°C. To have a better chance, which takes account of tipping points and feedback loops, we should aim to cut significantly faster. Yet BP still plans to sell oil and gas in 2050, well beyond the point of climate safety, and is using promises of unproven and uneconomic ‘carbon capture’ technologies to balance out its net-zero numbers.
But should BP be applauded for at least taking a step in the right direction? Well…not really. And here’s why. At the start of 2020, the oil industry was already in crisis. Price wars between Saudi Arabia, Russia and the US and the plunging cost of renewables and electrified transport was causing oil supply to outstrip demand. Meanwhile, a resurgent global climate movement and powerful frontline resistance saw pipelines being cancelled, new airports being shelved and the political power of fossil-fuel companies whittled away by divestment and anti-sponsorship campaigns. As predicted in NI 477 back in 2014, the end of the oil age was already in sight – and in the last six months the Covid-19 crisis has sent the process into overdrive.
The oil industry is now in unstoppable decline. Many of the more expensive and extreme extraction projects that threaten people’s lives, lands and livelihoods around the world are being cancelled. Though cause for celebration, this is not a managed or fair transition to a green economy. With the fracking industry in chaos and tar sands in huge trouble, thousands of jobs are being lost, with workers bearing the brunt of the impacts of government and corporate short-sightedness.
Faced with this landscape, BP appears to have made a careful calculation. Rather than pretend that a return to business-as-usual is possible, the company has decided to spin the slow-motion collapse of its portfolio as a purposeful shift to a greener future. Costly, high-risk extraction projects can now be dumped in the name of a low-carbon transition while it expands its investments in renewables to claim a bigger stake in the industry that’s rapidly expanding to replace it. Meanwhile, this supposedly caring company continues to prop up repressive regimes to protect its interests everywhere from Egypt to Azerbaijan to West Papua.
Let’s be clear: the oil industry is not going down quietly. New extraction projects are still threatening the Arctic and the Amazon. BP’s pledge to not start any projects ‘in new countries’ this decade still allows for opening new frontiers in the 79 countries where it already operates. Big Oil’s current collapse is still too slow, and will take us all down with it unless we push harder.
There is huge cause to celebrate the news of the oil industry’s decline. But we should not give credit to the oil giants like BP who got us into this mess. Let’s give credit to the people – from the communities of resistance to the renewable-power pioneers – whose energy and determination has forced them down this path, and given us the chance to beat the fossil-fuel giants and clear the way to a safer, fairer world.