Rhein on Energy and Climate

BP: Beyond Petroleum?

The new BP chairman, who will take over 1st January 2010, has expressed his concerns about the future of the planet. Humanity cannot go on tripling global production and doubling population until 2050. The planet will have great difficulty in coping with such a challenge. The pace of growth of car ownership and air travel is unacceptable! “We have to find intelligent solutions and the energy industry has to be in the centre of that”, he told the Financial Times.

For several years the company has advertised BP (British Petroleum) as standing for “Beyond Petroleum”. But its addiction to oil and gas has not changed. It continues expanding its reserves of oil and gas, from Russia to Africa. There are no signs of a long-term diversification strategy into zero-carbon energies. It has not been notorious for developing big off-shore wind or solar thermal projects, no more than any other oil and gas companies. It is not known for investing in carbon capture and storage research, unlike its competitor Norsk Hydro. Nor did it enter nuclear power generation.

The only ray of hope is the BP Statistical Review of World Energy 2009, which confirms that “the world has enough proved reserves to meet the world’s needs for decades to come. The challenges the world faces are human not geological.”

None of the oil and gas companies will be able to exploit 100 percent of their reserves. Rising production costs, improved competitiveness of wind/solar power and increasingly strict C02 emission constraints through emission caps or carbon taxes, will prevent them from doing so.

The top priority for the incoming BP chairman should therefore be to convert his company into a global player in renewable energies. That will take three decades longer, but it is important to take the decision today and send the right message that one of the biggest oil and gas companies has decided to “go green”.

The ride will be rough. Good luck Mr. Svanberg!

Brussels, 27.06.09 Eberhard Rhein

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