Written by: Kimberly White
BP has announced it will cut oil and gas production 40 percent over the next decade.
The announcement follows the oil giant’s reported $16.8 billion quarterly loss. Fossil fuel consumption has fallen drastically amid the COVID-19 pandemic.
The company also stated that it would discontinue oil and gas exploration in new countries and amp up investments in low carbon energy. BP will increase its investments in low carbon energy 10-fold, investing nearly $5 billion each year in renewable energy, bioenergy, hydrogen, and carbon capture technology.
Carbon capture and storage is an emerging technology and has yet to be proven at scale. It is a very costly, energy-intensive process and has not been proven to be consistent regardless of whether it is apart of the original design or as an added retrofit.
“The good news is that BP will actually produce less oil and gas, and they’re making that change this decade. That is vital. Up to this point, many companies, from fossil fuel majors to the aviation industry have focused on offsetting – which all too often is not even damage limitation,” said John Sauven, Executive Director of Greenpeace UK.
“We should note though, that BP is still backing hydrogen made from methane, a fossil fuel, instead of the greener option of making it from water and renewable power. It is putting faith in carbon capture and storage, as other companies are doing, which is at best optimistic because this technology is not zero emissions, is not proven, and does not exist anywhere near the scale that’s required. Its investment in biofuels should be scrapped because so far these have boosted palm oil use and hence deforestation, in particular in Indonesia,” continued Sauven.
The company aims to rapidly expand its renewable energy capacity, setting a goal to achieve 50GW by 2030. The move is part of BP’s strategy to achieve net-zero emissions. In February, BP CEO Bernard Looney pledged the company would achieve net-zero emissions by 2050.
“This coming decade is critical for the world in the fight against climate change, and to drive the necessary change in global energy systems will require action from everyone,” the company said in a statement.
BP’s announcement signals that big oil is beginning to recognize that, to ensure survival, companies need to urgently shift away from fossil fuels and toward renewable energy. However, BP still has a long way to go. The company did not account for its 20 percent stake in the Russian oil company, Rosneft. Environmentalists were quick to point out that BP’s stake in Rosneft represents a significant portion of its oil and gas production and needs to be included for it to truly achieve a 40 percent reduction.
“BP must take responsibility for Rosneft, for all of the carbon it invests in extracting, to legitimately claim to achieve a 40 percent reduction by 2030. BP must also stop investing in any new oil and gas, whilst ensuring a just transition for its workers and the communities affected by its polluting projects,” said Kelly Trout, Senior Research Analyst at Oil Change International.
Header Image Credit: Zbynek Burival/Unsplash