CLIMATE CHANGE | CURRENT VIEW
From Fossil Foe to Climate Hero? Not So Fast BP.
Five essential elements to make an oil and gas company’s climate pledge meaningful
Oil and gas companies have, deservedly, been portrayed as the worst of the climate criminals. It’s not only that their industry is the leading source of greenhouse gases but also that they invested decades into muddying the issue of whether climate change was even happening despite knowing exactly what the impact of delaying action would be. Their behavior was indefensible.
Last week, one of the majors broke away from pack, becoming the first to make a bold climate pledge. The CEO of BP PLC, Bernard Looney, announced a significant program to begin transitioning away from its carbon-pollution roots.
BP’s goals included getting to net zero across its entire operations, including upstream production, and halving the carbon intensity of its products by 2050 or sooner. Additionally, it is increasing visibility into methane at oil and gas processing sites, investing more in non-oil and gas business lines, and refocusing its influence campaigns. BP’s pledge touches on many of the right issue, but the detail is critical: how are the goals measured, what is disclosed, how quickly they move to right the wrongs, whether they address the the harm they have caused.
So what would a meaningful pledge look like? The pledge should be measurable and transparent. Without measurable milestones and goals, there will be no accountability, and without transparency, there will be no trust.
Additionally, a meaningful pledge not only reduces the rate at which the company damages the planet but also addresses past damage in a significant way. If a company was spilling poison into a large lake, simply committing to stop spilling in 30 years would mean nothing. That doesn’t qualify for sainthood, it just makes you less of a criminal. Redemption requires much more than simply being less bad.
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A comprehensive pledge should have five elements that between them stop current damage, address past damage, and provides accountability. The BP pledge touches on some of these to a greater or lesser degree, and uses many of the right terms — transparency, incentives — but there is much more that needs to be done. If other oil and gas majors want to catch up an pass BP, here are the elements of a meaningful pledge.
1. Stop all exploration, expansion, and infrastructure investment
If BP is serious about taking a significant action, it needs to wind down some fundamental parts of the company. A corporation can’t on one hand say it will be better some time down the road and at the same time expand its fossil fuel operations to squeeze as much out of the earth as it can in the short run. To be aligned with its stated goals, we should call on BP and all other fossil fuel companies to commit to actions that stop expansion today.
- Stop all exploration for new fossil fuel reserves
- Stop all leasing new fossil fuel reserves identified by others
- Do not exploit existing fossil fuel reserves where development has not yet begun, and don’t sell those reserves to another company that will exploit them
- Stop all investment in or support for new fossil fuel infrastructure such as pipelines
- Stop all extraction that takes place on the lands of national or state wildlife refuges, parks and monuments
2. Influence the whole supply chain
The oil and gas giants are planets with a gravitational pull that can change the trajectory of all around them. In the retail industry, Walmart and Costco’s requirements of suppliers have changed how consumer product goods companies do business. BP and the other oil majors who will, through market or public pressure, all eventually follow with their own pledges can use their buying power to amplify their impact.
- Require suppliers to pledge to reach net zero emissions
- Sell stakes in any companies they own or invest in that have goals at cross-purposes with the pledge
- Create incentives for purchasers of their product to favor lower-carbon products by creating an internal tax that shifts profit margin away from polluting and toward net zero products
3. Pay penance for past pollution
The company that has poured poison into the lake wouldn’t be considered heroic for merely stopping adding poison to the lake, they would need to reverse the damage they have done. Reversing an oil and gas company’s decades of damage is about not only investing in projects and technologies that draw down carbon but also investing in the people whose lives have been harmed by past practices. Daily, communities are harmed by the oil and gas industry, and disproportionately they are minority communities. Reparations could take many forms and here are a few starting ideas:
- Open free respiratory health clinics and supply asthma medication for all residents within a certain distance of oil and gas extraction, storage and refinery sites, and provide public disclosure of asthma rates in those communities
- Offer free water quality monitoring for all residents drawing from a water table within a certain distance from a fracking site, and provide clean water for households for all residents whose water does not meet certain standards
- Provide an “Earth Dividend” that is a multiple of the annual dividends paid out to shareholders and invest it in workforce training programs to help oil and gas employees transition to clean energy or regenerative careers
- Create an “Earth Bonus” that is a multiple of the total bonuses paid or set aside for executive and invest it in regenerative projects that draw down carbon
4. Create transparency and congruent incentives
Setting a future goal is meaningless if progression towards that goal isn’t made on a consistent basis. Having an internal plan is not enough. There is a very good reason for all of us who value the planet to not trust oil and gas companies to follow through on claims: they’ve spent years obscuring the facts, and unless there is full transparency and a clear path towards net zero, it will be too easy for them to fudge the numbers, redefine the goal or otherwise dodge their pledge.
- Create a public dashboard to track progression towards the goals
- Disclose total fossil fuel extraction and production
- Disclose investments in clean energy technology and total generation
- Measure all methane leakage at oil and gas wells, providing online live cams that make leakage visible to the local community, government, and environmental groups
- Track water quality and earthquakes in all areas where the company or its suppliers are fracking
- Tie executive and employee bonuses to the pledge goals, creating current and future incentives to meet annual milestones
5. Stop all misinformation and greenwashing
BP’s CEO said the the company would “lay down the law” with regards to lobbying and public relations, having all programs reviewed and approved by head office. All oil and gas companies need to make a clear commitment to stop influencing legislation, regulations, and real or effective subsidies that enable the fossil fuel industry to thrive. A truly meaningful pledge would take the industry’s finger off the scale and eliminate misinformation.
- Disclose every dollar donated to politicians, think tanks, and oil and gas industry groups and events
- Disclose all funding of academic research projects about the impact of the industry on the planet
- Disclose all payments to lobbying firms and the programs they are engaged for
Pledges are great public relations moves, and BP’s pledge has garnered headlines and set a minimum standard that the next oil and gas giant will need to equal. But it’s important to remember that there are many areas where the details and definitions need to be better understood and it could take years see how well it will be executed.
It’s far better than nothing, but it’s not enough. Nothing that the oil and gas companies do at this stage will be enough. The only question is whether they can play a significant enough role in the transition to justify their survival.
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