close
Airbnb: A House of Cards?
Airbnb’s stated purpose is to “Create a world in which anyone can belong anywhere.” Are they truly owning that, or is it time to pay the rent?
chevron_left
-
play_arrow
Whistleblowers: A very special kind of bs detector Calling Bullsh!t
-
play_arrow
McKinsey: Something to hide? Calling Bullsh!t
-
play_arrow
Web3: A more humane, egalitarian, and decentralized internet? Calling Bullsh!t
Subscribe on:
- Home
- keyboard_arrow_right Calling Bullshit
- keyboard_arrow_rightPodcasts
- keyboard_arrow_right BP: Breaking Promises?
share
close
-
play_arrow
BP: Breaking Promises? Calling Bullsh!t
Our guests
Is the oil and gas company that told us they were moving Beyond Petroleum taking us for a new ride?
Stated purpose: Reimagining energy for people and our planet.
Twenty years ago, BP attempted an ambitious rebrand claiming that henceforth the initials BP would stand for Beyond Petroleum (formally British Petroleum). Two years ago, and STILL one of the world’s largest oil and gas producers, they announced their new climate-friendly purpose. So what are the actions CEO Bernard Looney and his leadership team would have to take to plug this gusher and actually win back our trust?
To get to the bottom of this barrel, we talk with three experts on energy, climate, and marketing: Tyson Slocum, Energy Program Director at national consumer advocacy group Public Citizen, Duncan McLaren, Climate Policy Expert, and Jamie Henn, co-founder of 350.org and Director of Fossil Free Media.
I don’t know how many times one company can continually rebrand itself as being Beyond Petroleum. That’s sorta hard to do when your business is in fossil fuels.
– Tyson Slocum
BP’s BS score is
Show notes
- The war in Ukraine had an immediate impact on the oil industry at large. Read about how it’s impacted BP.
- CEO Bernard Looney is staunch in his commitment to change. He recently tackled accusations of greenwashing live on air.
- The Harvard Gazette details Big Oil’s public relations efforts on climate change.
Episode Transcript
[SOT Andrew – CNBC] Joining us right now is Bernard Looney. He is BP’s CEO Bernard. Bernard, Let’s walk through what the future looks like.
SFX: Bernard Looney mash up
THEME MUSIC: “In Passage” by Migration
TY MONTAGUE (VO)
Welcome to Calling Bullshit, the podcast about purpose-washing…the gap between what companies say they stand for and what they actually do — and what they would need to change to practice what they preach.
I’m your host, Ty Montague. I’ve spent over a decade helping companies define what they stand for — their purpose — and helped them to use that purpose to drive transformation throughout their business.
Unfortunately, at a lot of organizations today, there’s still a pretty wide gap between word and deed. That gap has a name: we call it Bullshit.
But — and this is important — we believe that Bullshit is a treatable disease. So when the BS detector lights up, we’re going to explore things that a company should do to fix it.
TY MONTAGUE (VO)
In this episode, we’re gonna look at oil company BP. Recently, BP CEO Bernard Looney announced a new purpose – to Reimagine energy for people and our planet. We want to help the world reach net zero and improve people’s lives. That’s a pretty big shift for one of the largest current and historical producers of CO2 in the world.
TY MONTAGUE (VO)
But the interesting thing about this story – it’s not the first time that BP has made a bold claim about reimagining energy.
[SOT Beyond Petroleum commercial] Is it possible to drive a car and still have a clean environment?… …We think so. And now BP Amoco, Arco and Kestrel have come together to try beyond petroleum – BP.
TY MONTAGUE (VO)
That’s a commercial from 2001 as part of then CEO John Browne’s bold re-branding of the company – claiming that the initials BP would henceforth stand not for British Petroleum, but for Beyond Petroleum.
TY MONTAGUE (VO)
To understand just how significant the idea of “beyond petroleum” was, we need to take a quick trip back in time.
Born in 1908 as the Anglo Persian Oil Company, the company first staked claims in oil wells in what is now Iran.
In the decades to follow, BP expanded throughout the Middle East, Africa, Latin America, Europe, and Russia. Along the way, they developed their own distinct “cowboy” culture – BP played hard and they played for keeps. For instance, a struggle for control of the company with the government of Iran, resulted in the overthrow of democratically elected president Mossadegh in 1953.
They also became known as the company that took the biggest extraction risks and then reaped the biggest financial rewards. As a result, they left a trail of environmental and safety catastrophes in their wake.
[SOT] Torrey Canyon
TY MONTAGUE (VO)
When CEO John Browne took over the company in 1995, he inherited the biggest polluter with the worst safety record of the seven largest oil companies in the world – known as the super majors.
MUSIC
But John Browne was different from his predecessors and peers. A visionary in his own way, he saw the perils of climate change and understood the oil industry’s culpability
[SOT John Browne] I believe we’ve come to an important moment in our consideration of the environment. We need to go beyond analysis and to seek solutions and to take action. It is a moment for change and for rethinking corporate responsibility.
TY MONTAGUE (VO)
By 1997, BP’s new CEO had become a vocal advocate for clean energy. He committed to reducing the company’s greenhouse gas emissions and invested in solar power and alternative energy.
MUSIC:
Under Brown’s watch, BP also broke ranks and exited the Global Climate Coalition, an oil industry lobbying group of businesses that opposed action to reduce greenhouse gas emissions.
TY MONTAGUE (VO)
In oil industry terms, BP had gone renegade. They had a new, progressive story and they had started to make that story real through bold action.
TY MONTAGUE (VO)
But, bold change in the oil industry makes enemies. In some cases, very powerful enemies. In 2006, those enemies began a whisper campaign about John Browne’s private life —
[SOT] News footage/tabloid footage of John Browne’s sexuality.
TY MONTAGUE (VO)
The press was relentless. And fearing being outed, Browne lied under oath about his sexuality and was charged with perjury. On May 1st 2007, John Browne resigned as CEO.
Its sad looking back at this from 2022, had John taken over a decade later being gay wouldn’t have even been an issue.
MUSIC: “Static City Drumline” by Blue Dot
TY MONTAGUE (VO)
After Brown’s departure, the head of Exploration and Production, Tony Hayward, became the new CEO.
The company divested itself of its alternative energy holdings and diverted that money to radically experimental deepwater drilling methods.
And then, on April 20th 2010, disaster struck.
[SOT] Montage of News clips
TY MONTAGUE (VO)
The explosion was caused by a natural gas blowout a mile down on the seafloor. The fail-safe mechanism designed to stop the flow malfunctioned and the equipment needed to solve the problem was on the other side of the world. Eleven people died and millions of gallons of oil was leaking into the Gulf of Mexico.
It was the worst oil spill in history and BP was wildly unprepared to respond.
And to make matters worse – if you could imagine that was even possible – BP was actively trying to play things down and play the victim.
[SOT] CEO saying “I want my life back”
MUSIC: “Dirty Wallpaper” by Blue Dot
TY MONTAGUE (VO)
Any oil company would have suffered in this situation. But there was a special outrage reserved for BP because they claimed to be a “green” energy company and wound up as the culprit in the worst environmental disaster in history.
Trust in BP was shattered.
In retrospect, I’m guessing the new CEO Bernard Looney wishes that John Browne’s “Beyond Petroleum” plan had been implemented. BP would have had a 20-year head start on their competitors, all of whom have recently announced ambitious plans to make their own transitions to low carbon, sustainable energy. Instead, like the rest of the big oil, Looney has to make this transition fast.
INTERSTITIAL MUSIC
So folks, that brings to the main question: BP is once again saying that their purpose is to: Reimagine energy for people and our planet.
Is this finally true or is it still a bunch of bullshit?
Get out your BS detector and join me as we drill for answers.
Right after this…
INTERSTITIAL MUSIC
TY MONTAGUE (VO)
Welcome back. To help me get to the bottom of BP’s renewed commitment to cleaner energy for people and the planet, I first spoke with Tyson Slocum, an expert in the world of petroleum, natural gas, and power markets.
TY MONTAGUE
Tyson, welcome to Calling Bullshit. We’re very excited to have you on the show.
TYSON SLOCUM
It’s my pleasure to be here.
TY MONTAGUE
I’d love it if you could start out by telling us a little bit about your background and the work that you do.
TYSON SLOCUM
So I’m the energy program director at Public Citizen. Public Citizen is a national consumer advocacy group based in Washington DC. I run all of our energy policy-related work, and that mainly focuses on the oversight and regulation of petroleum, natural gas, and electric power markets. Our goal at Public Citizen is to promote those policies that provide affordable, reliable, and sustainable energy for working families.
TY MONTAGUE
Fantastic. I love that. So let’s get into BP. The topic of today is their energy transition goals and so just to kind of level set – how much CO2 is BP putting into the atmosphere in say an average year?
TYSON SLOCUM
A heck of a lot, it’s difficult to quantify, but they’re one of the largest individual emitters, just because, the scope of their operations, they literally have a presence on every single continent. They have a massive carbon footprint. And then what’s, what’s important here Ty is also, they are a large historical emitter because the company has been around for such a long time.
TY MONTAGUE
Right.
TYSON SLOCUM
That when you look at its entire legacy footprint, it’s even larger and it’s going to be one of the largest, single contributors to climate change from a corporate standpoint.
TY MONTAGUE
And because of climate change, most of these companies have now announced their plans for so-called energy transition, your opinion, how serious do you think these companies are about making that transition?
TYSON SLOCUM
I think they’re very serious about it from a public relations standpoint. But when you look at the day-to-day operation and even look at their capital expenditure plan going forward the next five years, it is dominated by oil and gas and it’s important to note here that in BP’s own financial results, they classify their natural gas production activity in with renewables. So they consider natural gas to be a clean source of energy. When you know, it is absolutely not.
TY MONTAGUE
I did not realize that. That’s crazy.
TYSON SLOCUM
So, so that’s the problem. You know, BP isn’t alone here, but BP is desperately trying to reclassify itself as a clean energy company. And again, Ty, this isn’t new. I mean, it started 20 years ago when they came up with this advertising plan to…
TY MONTAGUE
Beyond Petroleum.
TYSON SLOCUM
Exactly. Exactly. Yeah. So, BP has been in this process of reinventing itself from a public relations standpoint for a very long time, but in terms of its operational standpoint, BP is an oil and gas company, period.
TY MONTAGUE
Yeah. So, within two weeks of taking the reins as CEO at BP in February of 2020, Bernard Looney outlined a whole new purpose for BP. He says it is to re-imagine energy for people and our planet. We want to help the world reach net zero and improve people’s lives. And then down in the details, he lays out, specific goals for getting BP to net zero. He calls them aims, which I find kind of a weaselly word. How about commitments Bernard, but, okay. So he says, our first goal is net-zero operations. Our aim one is to be net-zero across our entire operations on an absolute basis by 2050 or sooner, this aim relates to scope one and two G H G emissions. So, first of all, what does that mean?
TYSON SLOCUM
So that just means the emissions footprint of BP and its operations, not of how its fuels are going to be consumed and therefore add to climate change. And so, you know, just from the very, get-go their definitions of reaching net-zero, have a massive…
TY MONTAGUE
Flaw.
TYSON SLOCUM
Exactly a huge flaw.
TY MONTAGUE
So just to, to school me up, let’s move to their aim two: Our aim two is to be net-zero on an absolute basis across the carbon in our oil and gas production by 2050 or sooner, this is our scope three aim and is on a BP equity share basis excluding holdings in Rosneft, the Russian company run by Putin’s number two guy that they just announced they were going to divest of. But, staying with what’s on their website, that net two goal to be net-zero on an absolute basis across the carbon in our upstream oil and gas production by 2050 or sooner. What does that mean?
TYSON SLOCUM
So there, they’re talking about scope three emissions for their oil and gas operations, which appears to be more comprehensive, but still, this is a goal by 2050. And that isn’t really that ambitious. We’re looking at another generation or more of significant oil and gas, extraction, opportunities for, BP. And so in terms of meaningful action to address the climate crisis, I don’t see the ambition in this, you know, net-zero goal by 2050 as being relevant.
TY MONTAGUE
So you don’t think it’s enough and the timeline is too long. Is that sorta your take?
TYSON SLOCUM
Absolutely. And this is, this is the challenge, right? It seems sort of silly for an oil and gas company, especially one as large as BP to be talking about getting to real meaningful net zero. Whether we’re talking about five years or 40 years, because you’re gonna have to transform the fundamentals of the company and I don’t see where that is happening yet at BP. You know, we’re talking about sort of nebulous goals far off in the future. I don’t see how those long-term goals are affecting today’s operational priorities at BP. I still see capital allocation at BP being first and foremost, allocated to continued oil and gas development.
And that’s the big challenge. And, you know, for any large oil major, Ty, there’s going to be a market challenge to doing a real transition to renewables, for example. Because during that transition, let’s say BP has a real meaningful plan, which, which I don’t see, but just for conservation purposes, to transition off of oil and towards renewables, the market is just going to want to see the BP split into separate companies because the market value of a pure, renewable play is going to be dragged down by the continued operations of oil and gas, which the market is not going to see as having enough growth. And so, as long as BP remains an integrated company that is trying to get into renewables while still primarily being an oil and gas company, those oil and gas operations are always going to drag on the value of the renewable investments. And so what you would see from Wall Street is they would say split up company.
TY MONTAGUE
Interestingly, a former CEO, John Browne, is recently on record saying he thinks that’s a good idea to spin out the renewable energy assets as a separate company, essentially create BP future, which is rapidly growing less capital intensive and valued at a premium by investors and then by default create BP past, which is the oil and gas assets, capital intensive, unloved by the market and in decline. And then just let the market decide. What do you think about that?
TYSON SLOCUM
I think that’s how all of these oil and gas companies are gonna have to go. If you’re going to remain a publicly-traded company, offering shares to the public, that’s the only strategy that makes any sense. And the fact that BP hasn’t done that split yet shows that their financial and capital commitments to renewables aren’t yet meaningful enough to orchestrate that split.
TY MONTAGUE
Yeah, Looney doesn’t like the idea of splitting up. He actually responded to Brown and he said he wants to use the cash of the high carbon business to fund the transition. He calls it, what is it? He’s got a catchphrase for it, performing while transforming.
TYSON SLOCUM
That would be believable if that’s what was actually happening. But when we look at the balance sheet, BP is still pouring billions of dollars every year from its earnings on oil and gas operations into more capital investment for additional oil and gas exploration and production, and into dividends. Because the way that these oil companies try and keep their stock price attractive, because they’re being eclipsed, all of them by companies like Tesla and renewable energy companies that just have way more growth potential, the way that BP markets itself to fund advisors and to other big institutional investors is the lucrative dividend that they pay out in cash every quarter. And so a bunch of the profits from their oil and gas operator are just going into pumping up their stock price to make it continually attractive. And so until we see a deviation from big capital investment in oil and gas and the big investment in dividends, this is inaccurate. They are not, moving that profit from today’s oil and gas operations and to, into, tomorrow’s renewables.
TY MONTAGUE
Sticking with the, the aims that they have on their website I just want to go through a couple more that frankly, I just don’t understand. Aim three is to cut the carbon intensity of the products that we sell by 50% by 2050, or sooner. What does carbon intensity, what does that mean?
TYSON SLOCUM
So this is talking about the relative carbon emissions for energy resources. So a lot of this is BP and some of the other majors like Chevron and Shell have been increasing their investments into natural gas. And so the way that they measure it is gas has a lower carbon intensity than oil. It is not a clean resource, right? It is a fossil fuel, but compared to oil. And so a lot of this carbon intensity talk is really about a shift into natural gas. And you know, a lot of that is because they see continued market opportunities for gas in the power generation sector, in the industrial sector and in the agricultural sector with fertilizers and so forth. And so again, this is the challenge they’re using these words that sound like they’re doing a serious pivot into renewables, but it’s not, it’s just putting slightly more investment into gas, over oil, and they’re able to count that as a lower carbon intensity going forward. It’s not going to deliver us to a path to meaningfully addressing the climate crisis.
TY MONTAGUE
Right. Okay. So aim four is to reduce methane. It says our aim four is to install methane measurement at all of our existing major oil and gas processing sites by 2023, publish the data and then drive a 50% reduction in methane intensity of our operation. So, first of all, why is this important? What’s special about methane?
TYSON SLOCUM
So methane is an extremely powerful greenhouse gas. It is many, many, many times more powerful than carbon dioxide. It doesn’t last in the atmosphere as long as CO2 but methane for the briefer time that it is in the atmosphere after being released is far more potent. And so the Obama administration, in 2012, introduced sweeping requirements and mandates to control methane emissions from oil and gas operations, and BP, and all the other oil companies successfully fought it off.. Now we’ve had a change in heart and really what, what changed was in November 2020 an energy company that is, partly owned by the French government called N G canceled, a major liquified natural gas export deal with a US based LNG exporter because of the lack of any meaningful methane regulations on US gas production, or us gas exports, and that cancellation of that $7 billion deal was a wake-up call for oil and gas producers, everywhere that all of a sudden there was a emphasis on controlling and measuring the carbon content of natural gas production. And so we have now seen a total 180, where BP actually was sending out tweets in support of Biden administration efforts to revive a federal regulation over methane emissions. And so this is BP trying to get out ahead of a market trend, Oil companies are uniformly against regulation unless that regulation can provide market access opportunities. And in this case, regulating methane emissions and documenting your ability to limit fugitive emissions is seen as a market opportunity because you’re able to slap a label of clean methane on your natural gas and make it more desirable, for export and consumption in global markets. So it would have been great if BP was making this announcement a decade ago.
TY MONTAGUE
Another point that they make on the website to help the world get to net zero is aligning associations. “Our aim is to set new expectations for our relationships with trade organizations around the globe.” In September of 2020, September 20th of 2020 in a publication called the Resilience, they pointed out that BP still supports eight anti-climate lobbying groups, as of that date and, you know, that’s 18 months after Bernard Looney took his job and, they had plenty of time to clean that up by September of 2020. Are you aware of any issues there and what does that make you think about BP?
TYSON SLOCUM
Yeah, absolutely. This is a huge problem. And for a second, let me just talk about trade associations in general, because it’s sort of a fascinating, crazy situation that your listeners may not be familiar with. So what a trade association let’s take the American petroleum Institute, which is the largest and probably the most successful trade association, lobbying group in the United States today, it’s got an annual budget in excess of $300 million a year. And so what API does is it collects dues from BP and Exxon and all the other companies and allows them all to actively collaborate on influencing legislation and regulation. So while oil companies compete in the marketplace, when it comes to influencing our politicians and our regulatory structures, they are actively colluding because they have a shared common interest. And so, you’re absolutely right. That BP’s stated commitment to only joining those trade associations that align with efforts to address climate change, do not meet reality because they continue to pay millions and millions of dollars in dues to trade associations that are actively fighting against climate solutions.
TY MONTAGUE
Looney has also made a few subsequent promises after he rolled out this plan. One of them was in August of 2020. He said that in, he said to investors that BP will reduce oil and gas production by 40% within a decade. And that was two years ago. So he’s got eight years left. And that they would stop exploring for oil and gas fields in new countries in the same timeframe.
So I guess, do you read from that, that he’s saying he’s prepared to leave oil in the ground to make this transition work?
TYSON SLOCUM
I don’t think that he’s realistic about those commitments. I mean, these are non-binding commitments, first of all, they’re just public announcements.
TY MONTAGUE
Yeah. Promises.
TYSON SLOCUM
So without a binding commitment, the company can make whatever adjustments and changes it wants. I don’t see this as to be very honest and meaningful commitment. BP, is still committing the vast majority of its capital investment into exploration and production. And that tells me that BP remains an oil and gas company, period.
TY MONTAGUE
One of the things that we’re exploring on this show is an evolved version of capitalism, let’s call it, that includes some of the externalities that companies really like to ignore. So right now, for instance, there are a lot of externalities that are not priced into a gallon of gas.
The costs of climate change, for instance, right? And in a way it keeps the price of a gallon of gas, artificially low. For example, the New York Corps of engineers is proposing a seawall that’ll cost $119 billion dollars to protect the city from rising sea levels – is that cost figured into every barrel of oil today?
TYSON SLOCUM
Not at all. In fact, there are no federal regulations of carbon emissions from oil and gas operations. So they’re getting a free pass and you just summed it up correctly that there are large externalities with fossil fuel production and consumption that are not reflected in the market price and so all of society has to pick up that tab. Look at the infrastructure bill that President Biden just signed into law at the end of last year. It includes $11 billion dollars of taxpayer money to clean up coal mines. You know, why, why aren’t coal companies doing that? There’s also billions of dollars in there for taxpayer money to plug up old and abandoned oil and gas wells. Some of those were BP’s old oil and gas wells. So, again, the fossil fuel companies enjoy today’s profit of extracting these fuels without any of the long-term financial obligations that their business causes.
TY MONTAGUE
That needs to change. I’ve read that there are a number of cities and towns who have actually started to sue fossil fuel companies to try to recover some of that money. Have any of these lawsuits succeeded so far?
TYSON SLOCUM
They’re all moving through the federal and state court systems. And, they’re using very inventive tort law, you know, tort is if you sue for damages, I slipped on the sidewalk in front of your business because you failed to maintain it and your failure to maintain that caused me bodily injury. I am, due, damages for my pain and suffering. So this is sort of the same thing that the oil and gas industry knew decades ago that their business was contributing to climate change but didn’t do anything about it. And that’s sort of the key from a court decision that they knew that their business was creating these harms and they did nothing to address them. And we all are suffering as a result. And I think that’s part of the motivation for a company like BP to try and get out ahead and to say, listen, we’re in favor of federal action to regulate these things so that we can try to get out from these, tort lawsuits. And in fact, there’s a plan that’s, being underwritten by some of the major oil companies to establish a carbon tax in the United States. And there’s a lot of merit to that. But when you look at the details of their proposal, they want the carbon tax in exchange for two big things. One, evisceration of climate regulations over their business and immunity from tort lawsuits, very similar, very similar, very similar to what the gun manufacturers got.
TY MONTAGUE
That’s annoying, and shades of the tobacco industry as well. You know, they deny, deny, deny, deny, deny, and then, you know, finally, events catch up with them.
You know, from our perspective, on this show, we’re looking for companies that are purpose led. These are companies that by and large have a conscience. They actually are trying to make the world better. And when they see a problem, they try and solve it. They don’t wait for the government to legislate.
And so when BP says they’re trying to take on climate change, our perspective is great. You sound like a purpose led company, but is their intention pure? Do they really mean it?
And so one of the things we look for is self-regulation. By agreeing to a carbon tax, if they’re trying to get out of paying for any liability for past harm, that does not clear our bar, at least at, at this show, like we would call bullshit on that. So why do you think Looney announced these goals in 2020? And why should we trust BP this time around?
TYSON SLOCUM
I think the reason that he’s making this sort of re-commitment on a public relations scale is because now there is a spotlight from large institutional investors. And these institutional investors have really in just the last couple of years, ratcheted up their pressure on companies to show them the money in terms of commitments on climate change. And so for an oil and gas company, that’s sorta hard to do when your business is in fossil fuels. And so they’re seeking to sort of mollify these institutional investors with a very slick public relations campaign that they’re trying to rebrand BP again. And I don’t know how many times one company can continually rebrand itself as being Beyond Petroleum, but that’s what they’re trying to do here. And so, that’s where we are right now with BP. It’s difficult for them to escape their culture of non-compliance in terms of safety and environmental record.
And they’re trying desperately to get back into that decision-maker seat, where they are one of the key brokers to try and navigate a new climate deal. But their reputation has taken such a big hit. I don’t know if, if they’re going to be the doing it again.
TY MONTAGUE
What is the number one action that you think Bernard Looney should take to actually deliver on, their stated purpose to re-imagine energy for people and our planet?
TYSON SLOCUM
First, I would exit all fossil fuel trade associations. Get out of the American petroleum Institute and all of the others. Second. Commit to specific, climate initiatives, legislative climate initiatives, because all of these companies can do they’re unilateral goals on their websites, but without some sort of binding operation through national governments. We’re not going to see the kind of meaningful action that’s required. And so I want to see BP support climate initiatives without the harmful caveats like it’s done on carbon taxes where it says we’ll support a carbon tax, if we have immunity from prosecution under tort law, right?
I think Looney needs to commit to a specific timeframe to split off the company if he’s serious about real aggressive investments in renewables, then he’s got to put his money where his mouth is. And right now, when I look at where BP’s money is, it’s all in oil and gas.
TY MONTAGUE
Tyson, is BP a bullshitter?
TYSON SLOCUM
An absolute bullshitter. So just BP stop the charade, you’re oil, and gas.
BS RATING THEME MUSIC
TY MONTAGUE
Love it. Okay. Last question. On this show, we have a tool that we call the BS scale and it goes from zero to 100, zero being the best zero BS, 100 being the worst, total BS. So on a scale of one to a hundred on the BS scale, where would you rate BP
TYSON SLOCUM
- They’ve got legitimate investments in clean energy. It just is minuscule in proportion to their investments in oil and gas. So I have to give them credit for some of their genuine pivot. It’s just not nearly enough. So 90.
TY MONTAGUE
Love it. Perfect. Tyson Slocum. Thank you so much for being on the show. I really enjoyed it.
TYSON SLOCUM
Absolutely. My pleasure.
INTERSTITIAL MUSIC
TY MONTAGUE (VO)
Ok folks, it is time to make the call: is BP really “ Reimagining energy for people and our planet?” Based on what I’ve heard so far, we gotta call Bullshit. Even if Looney is serious, and that’s questionable at this point, BP isn’t taking some fairly obvious actions that would signal that seriousness. But remember, Bullshit is a treatable condition. All it takes is action.
After the break, I’ll be joined by two additional experts in the oil business and climate change to help us explore the actions BP should take to fix it. Stick with us.
INTERSTITIAL MUSIC
TY MONTAGUE (VO)
Welcome back. New CEO Bernard Looney is saying a lot of the right things, but we’ve now drilled into it and we struck… BS. So what are the actions Bernard and his leadership team would have to take to plug this gusher and actually win back our trust? I’ve invited two experts to join me to propose the concrete actions that BP needs to take. – Jamie Henn, co-founder of 350.org and director of Fossil Free Media, and Duncan McLaren, Research Fellow at Lancaster Environment Centre with an in-depth expertise in climate and energy policy.
TY MONTAGUE
Jamie, I’d love to start out by just having you tell our listeners a little bit about your background and the work that you’re doing at Fossil Free Media.
JAMIE HENN
So I started my career in climate activism as one of the co-founders of three fifty.org, which grew into one of the largest international campaigns on climate change, and over the decade of working there I worked on a lot of different international mobilizations and projects often wearing the hat of our communications director. And over the years, one of the things that I noticed is we were trying to raise awareness about the climate crisis and push our governments to act was that every time environmental campaigners would try and come out and spur the world into action, we would face a massive backlash from the fossil fuel industry, often in the form of PR and advertising. And so, as I was thinking about the next stage of my career at the beginning of 2020, um, I started talking with a few other colleagues and friends about this idea of seeing if we could set up a operation that would both provide. Good communication support for groups who are taking on the fossil fuel industry, but also see what we could do to try and throw a wrench in the gears of big oil’s propaganda machine. And so out of that fossil free media and a campaign that we’re running called clean creatives were born and through both of those efforts, we try and help environmental groups do a better job of communicating to the public about the energy transition that we need to see while also calling out the work that the fossil fuel industry and their allies are doing to try and pollute the airwaves, just as they pollute the atmosphere.
TY MONTAGUE
Love that. Professor Duncan McLaren, welcome to Calling BS.
DUNCAN MCLAREN
It’s a pleasure to be with you.
TY MONTAGUE
I’d love to have you tell our listeners a little bit about your background and your area of focus in the energy sector.
DUNCAN MCLAREN
Thanks. Well, I’m sort of on my second career now, my first was working for environmental NGOs on a whole range of topics from sustainable development to corporate accountability, renewables development, and of course climate targets. But in 2011 I gave that up, for family reasons mainly, but embarked on a PhD, looking at geoengineering technologies in the context of the climate justice debate and that sort of led me into 10 years of working on particularly carbon removal and more broadly what I call the problems of technologies of prevarication. The ones that allow us to believe that we are going to solve the climate problem in the future with a new technology, rather than by delivering behavior change in lifestyle change today.
TY MONTAGUE
That’s great. Great to have you here So let’s jump right into some ideas for fixing BP. Jamie, I’m going to ask you to go first in two minutes or less. What’s the number one thing that you think BP should do to win our trust that they really mean what they say?
JAMIE HENN
Well, I think that there’s a few different categories of where we need to see action from BP. And I’ll start with the most obvious, which is that they need to stop exploring for new oil and gas and fully begin to wind down their existing production in line with the Paris agreement. They’ve made some commitments around that,but it’s needless to say they’re not yet at the pace, the scale, or really the commitment that we would need to see if they were serious about making that transition. So the nuts and bolts of actually doing the work to stop oil and gas production, that’s leading to the carbon, going into our atmosphere versus making yet more pledges and long-term targets is really where we need to see action, but I want to highlight a couple others in my remaining minute here.
First off is, on the lobbying and political front, you know, we’ve seen a lot of rhetoric, as you said, from Bernard, Looney and BP about how they want to aid the energy transition. But as I speak, they continue to remain members of big oil trade associations and front groups like the American petroleum Institute, which is the leading edge of the industry’s attack on climate policy here in the United States and BP over in Europe, continues to lobby for things like natural gas being included in the European union’s standards around investments, which is obviously not a renewable energy is it’s meant to meet their criteria. So stopping that lobbying is extremely important. And finally, along with that goes, stopping this sort of greenwashing and advertising that they’re doing is very clearly meant to mislead the public into believing that BP is serious about the energy transition when the vast majority of its investments are still going into oil and gas.
TY MONTAGUE
Great. Those are all very interesting and we will, unpack some of those in due course. Duncan, you’re up next in two minutes or less, what is the number one thing or things that Bernard Looney should do to convince all of BP stakeholders that he actually means what he says?
DUNCAN MCLAREN
BP needs to set absolute hard and fast production reduction targets. Stop messing around with intensity targets and scams about which scope of emissions are going to be covered. Set targets to reduce the amount of oil and gas they produce and those targets need to be matched so that there is reliable, permanent, guaranteed carbon removal on a ton by ton basis for any residual production that happens, let’s say after 2040, and probably about 50% of anything after 2030, that would get them in line with the Paris requirements.
Why do I ask for this? Well, it’s centrally about a climate justice case. Net zero is a great global target. It’s got a lot of people converging around it saying, we want to do this, but it’s ambiguous. It could mean an awful lot of emissions matched by an awful lot of removals. Imagine two elephants sat on a Seesaw as we call it a teeter-totter as the Americans call it. That’s not very stable or sustainable. It’s likely to break. What we need is a narrow convergence, where there are only a few residual emissions and the equal amount of carbon removal. So two mice sat on the teeter-totter may, that means that you have less impacts from the residual emissions and all the things associated with that: the extraction, the oil spills, et cetera. These are not just climate impacts when we go digging for oil and gas.
TY MONTAGUE
Both of those are great. It’s my turn now. I submit this humbly, Looney needs to take an action that would cause me to suspend my disbelief and when I think about it, my skepticism really comes from two things. Obviously the fact that we’ve been here before with BP, they talked a huge game about moving, in quotes beyond petroleum, and then turned around and created one of the largest environmental disasters in the history of the oil business in the gulf of Mexico. But there’s a second thing that makes me skeptical that really centers around the expectations of existing shareholders. You know, we have this financial system where investors are trained to expect quarterly reporting and positive quarterly results. And they’re also trained to punish CEOs who don’t deliver them. And this obsession with quarterly results is a major impediment to any CEO who is serious about transforming a company and so my idea is that Bernard Looney should announce that BP is going to discontinue quarterly reporting. And I think he should say that his rationale for this is that the only way to create long term shareholder value is to think and act on behalf of shareholders in the long term. And there’s precedent for this. Paul Poleman did it at Unilever more than 10 years ago. And Paul also managed to deliver outstanding financial results, but those results took time. And I think that that’s what Looney should do is buy himself some time, by taking that one action. And I think that would signal real change at BP. It would signal that the board is with him on this transformation journey that he has embarked on. It would set the stage for a number of additional actions that would continue to build trust. For example, publicly tracking the progress that they’re making toward the goals that they’ve put forward transparently reporting on problems that they’ve encountered along the way without tanking the stock necessarily.
So I’ll pause there.What are your thoughts on that? Or, any of the ideas have been put forward?
JAMIE HENN
Well, I think it’s interesting that you brought up investors because I think a lot of what we’ve seen out of BP is aimed at a few different audiences right now. And we talk about marketing and PR is really focused on the general public, but a lot of what BP has been doing, I think is best understood as trying to persuade their investors and not just individual investors, but large institutional investors like pension funds and others that they’re simultaneously serious about pursuing climate action while also maintaining their oil and gas business, BP is trying to do this awkward dance where it wants to convince its more green oriented investors that it’s serious about climate. While also showing that it will continue to get high profits from oil and gas. And so this dance is what I think we continue to see from big oil majors is on the one hand trying to market themselves to concerned investors and regulators and the public as being serious about climate action. While also turning around to some of their other shareholders saying, don’t worry about all of that. We’re still serious about oil and gas, and we’re going to drill baby drill, until the very last second.
TY MONTAGUE
He’s got a name for it, performing while transforming And that just to me reeks of bullshit. Duncan, what do you think about any of that?
DUNCAN MCLAREN
Yeah, to turn to your suggestion Ty though, of, uh, discontinuing, quarterly reporting. So quarterly reports, They instill a short-termism in corporations that goes against all we want to achieve on the environmental and sustainability front. But at the same time, it’s the over long-termism of targets like net zero by 2050, that is allowing the exploitative attitude. We need action now that cuts emissions dramatically in the next decade, if we’re going to be compliant with Paris. So I think stopping quarterly reporting could be a component of what BP should do. They would also clearly need to improve the nature of their reporting so that it’s, properly, consistent with the different impacts they’re having and to be accountable to stakeholders outside of the shareholders themselves.
TY MONTAGUE
Yeah. And, and, I heard you both in your ideas essentially say that the aims that BP has put forward are soft. Even, for instance, net zero by 2050 can be achieved in a lot of different ways. And I don’t want to put words into your mouth, but it’s, you can do it by planting a lot of trees and offsetting, Or you can do it by actually not pumping oil out of the ground. And you are advocating for the latter rather than the former. Is that correct?
DUNCAN MCLAREN
I’m definitely saying that BP cannot contribute to net zero if it goes on increasing its production and emissions and believes that it can offset all of that. So at the moment, while 2018 BP bought 850,000 tons of carbon offsets, it was responsible for around 1.6 gigatons of emissions. So you’ve got to be cutting emissions. You can’t just be offsetting. What is left that you might offset in some way, you have to offset through balancing it with things that actually remove carbon dioxide from the atmosphere. and they have to remove carbon permanently or Jura bubbly.
TY MONTAGUE
Can you explain some of those permanent carbon removal technologies?
DUNCAN MCLAREN
Most of them are currently quite speculative. There are technologies that use renewable energy to capture carbon dioxide from the atmosphere with a chemical agent of some sort to expose this chemical agent to the atmosphere, it absorbed some CO2. You then put it in an enclosed chamber, expose it to heat or pressure. The CO2 comes off, you can pipe it off, compress it and inject it underground. And as long as you do that in somewhere like a saline aquifer, it will almost certainly stay underground for thousands of years. Another very permanent form of carbon removal is called enhanced weathering. Again, you need some renewable energy, you grind up, basalt or other reactive rocks, quite finely spread it on the land surface and as the rain flows through it, it removes, or effectively the carbon dioxide in the rain water reacts with the rock goes off in the, runoff. And at least in theory ends up in the oceans where it ends up as, carbonite, and that’s where our limestone comes from.So that’s, that’s millions of years. So there’s a lot of these techniques. None of them are perfect. None of them would be scalable infinitely, but where scientists are hopeful, let’s say that may be somewhere between two and five gigatons a year could be removed using these technologies in the latter half of this century, once, once they’ve been developed.
TY MONTAGUE
So it sounds like once again, they just need to stop producing oil. I want to pivot to Jamie, because a big part of the BP story, Jamie relates directly to your thesis at fossil free media, that ad agencies and PR companies are some of big oils or, or maybe big carbon’s not so secret weapons. How big a problem is the marketing industry in this equation?
JAMIE HENN
I think it’s a huge problem. And I think that PR and advertising and marketing have been one of the largest barriers to climate action that just because it’s in such plain sight, we often don’t see it. and BP is really interesting case study because I think that of all the oil majors, they have always been the most attuned to their public image. But it’s worth remembering that as you mentioned earlier, it was all the way back in 1997, that, the previous CEO of BP was making announcements about how they were going to become a new type of energy company. And that led to then the rebrand in 2000, of BP to Beyond Petroleum.
TY MONTAGUE
Yeah, John Browne.
JAMIE HENN
I mean, that was 20 years ago, that they made this beyond petroleum, uh, rebrand. They’re not beyond petroleum 20 years later. and I think that we should take that lens towards the commitments that they’re making today that maybe there’s a higher degree of seriousness. There’s more political pressure, but BP hasn’t shown in the past that it was serious about any of these claims.
There’s a fascinating example of this from the current era, which is actually a leaked presentation that came out at the beginning of 2020, which is right when Bernard Looney, the new CEO is taking on BP and wanted to restructure the company.
And the presentation was done for BP by the ad agency, WPP, which is the world’s largest kind of advertising conglomerate. And this. Yeah, holding company. And this was an effort by WPP to kind of bring together some of its top people and say, we’re going to kind of do a first stab at what a new brand new image, new marketing approach for BP could look like that they would then use and all the advertising and all the advertising relationships that they have.
And it’s really a fascinating document because it basically walks through the fact that yes, BP’s, you know, core businesses, oil, and gas, and we’re going to be expanding upstream production, yada, yada, yada, but also, you know, we need to convince the public that quote, we get it on climate change. And they run through this incredible series of slides about how the world changed in 2019 because of the global climate strikes and Gretta, Thuneberg, and everything that had happened. And BP was wasn’t trusted on this important issue of climate change that the public cared about. So they needed to do something to signal that they “got it” on climate change. It could be part of the energy transition. Of course, nothing in the presentation was actually about concrete things that they would do, like stopping oil and gas production.
It was all about the ways that they would remarket themselves and so I think it’s worth all of us, you know, being able to see that stuff is what it is, which is propaganda.
TY MONTAGUE
It seems clear that the economics of wind and solar have gotten much, much better, very compelling these days. Isn’t there a strong argument for BP just being a responsible steward for their shareholders’ money, investing more money in those technologies and you know, leaving some oil in the ground?
DUNCAN MCLAREN
I think the problem is that from the shareholder perspective, from the workings of contemporary capitalism perspective, BP has these huge assets that are reserves of oil and gas in the ground and their corporate valuation reflects that their ability to pay dividends reflects that. And as soon as they start saying, oh, we’re going to leave some of that in the grant, then yes, they are managing a financial decline. And in a sense, that means that certainly my challenge to, to Bernard Looney, to say “set targets for reducing production” is going to be very hard as a businessman for him to take.
JAMIE HENN
I just, yeah. I want to zero in on this point on it’s making, because I think it’s so critical. I think that bP and other oil majors want to convince the public that they’re key to the energy transition. The reality of it is that yes, there is money to be made in clean energy, maybe big oil companies aren’t the best suited to do that. You know that there are clean energy companies that should be doing that. And I think it also raises a question for us. Do you really want BP to be controlling the energy of the future? This is the company that has for decades run over communities violated international human rights law spilled oil into the Gulf of Mexico, failed to clean it up, failed to pay the money that it was owed. I don’t want BP running the clean energy of the future. I’d much prefer that It’s managed publicly that it’s in smaller cooperatives and we have that choice right now to make that transition and to Duncan’s point what we need for BP? They should be held accountable for the damage that they’ve done and the ill begotten profits that they’ve made during a period in which we knew and they knew from their own science that every barrel of oil they dug out of the ground was furthering a planetary catastrophe They knew that last quarter when they made record profits. So why should they and their shareholders who also knew that have decided to stick with BP why should they be rewarded for that?
DUNCAN MCLAREN
So if I may, what I’d like to emphasize about that is how the dynamic of oil companies wanting to maintain the value of their reserves. And oil companies, doing political lobbying and marketing to position themselves as part of the energy transition, are both about the modern face of climate denial. The modern face of climate denial is about delay it’s to say, oh yeah, of course now we’re we happily accept that climate change is happening. We understand there’s a problem, but if we move too quickly, then we cause all sorts of other problems. And those things all converge around them extracting the most profit from their asset base and continuing to prolong the climate crisis.
TY MONTAGUE
I, I want to ask you both to suspend your disbelief for a minute, because in this part of the show, I do want to explore actual ideas. Like if we’re going to take them seriously and say, okay, they really mean well, they’re really trying to do this. What should they do? So, so let me run a couple of ideas past both of you and just get your, get your take. So, first of all, John Brown, the, former CEO of BP who actually initiated the beyond petroleum rebrand and, and began, what I believe was at the time, a genuine attempt at a transition to being a sustainable energy company. He recently said that he thinks that the company should be split in two, , to spin out the renewable energy assets that the company has as a separate company, essentially create BP future, which is rapidly growing less capital intensive and valued at a premium by investors and BP past the oil assets, which are capital intensive, unloved by the market and in decline. And then just let the market decide. So this is a former CEO saying this what’s your take on that?
JAMIE HENN
Yeah, that would be interesting if BP moved in that direction. The one thing I’d raise on it as a challenge. I know we’re trying to be a bit more optimistic here, but since Duncan and I are good skeptics, is that, um, is that the liability issue. If BP has known for decades, that their products were causing climate change, like big tobacco knew that its product was addictive and causing health impacts, what sort of responsibility do they have to help pay for the damage that those products have caused?
And so when we talk about BP being able to spin off a company, you know, that’s often what companies do to avoid liability. And so I think the question would be making sure that, um, you know, they’re not able to kind of dodge their social responsibility by creating, a dirty version of their industry and then hiding the assets there,
DUNCAN MCLAREN
But maybe to embroider the thoughts of, what would BP do if they were admitting some liability? What would be the sorts of investments or spending they should do? And here, I think they get the idea of a “just transition” – an energy transition that actually pays attention to social justice in terms of consumer need and worker need, would be helpful. And you may know there’s been an extinction rebellion spin-off campaign in the uK recently called insulate Brittain. Well, I think that’s what BP should do, that they should actually do the program of retrofitting good insulation in the homes of people in fuel poverty, particularly the homes of people who are in fuel poverty because of the rising gas prices. And they should go a step further, of course, which is to go around to those homes and install heat pumps instead of gas boilers, so that they could then cut the demand for the product that they’ve been selling and profiting from the cost of climate change.
JAMIE HENN
I mean, that’s a really important point and I think Duncan raises another piece of this, which is interesting, which is that – for the transition to take place we also have to deal with all of the oil and gas infrastructure that currently exists. You know, you can’t just turn it off and then leave it there, spewing methane for decades to come. And so there’s an incredible amount of work that BP could be doing, and it could be engaging probably more people that are currently in place to deal with all of the various oil and gas wells and infrastructure that is left behind these in many ways are forever liabilities that we’re going to have to deal with. Um, it’s not quite so simple as plugging a well and hoping that it never admits nothing again. You need people to go back and check it and verify that it’s been done, right. And then, you know, manage that process going forward. And so there, there is a role in a way to kind of re-imagine. Energy companies of the past, these oil and gas giants playing a role as Duncan was saying, and helping kind of do the retrofits and transition.
We need to move to clean energy, but also taking some responsibility for managing the damage that they’ve done and making sure that over the decades to come, we’re not having big blow outs of, you know, come CO2. That’s been pumped somewhere or numerous oil and gas Wells, continuing to leak methane and push us past global limits.Now Ty to your question about shareholders. This may require us rethinking some of these pieces when it comes to capitalism or beginning to at least put in some interesting government incentives and doing the finance work to do that. And so I think that, campaigners over the last few years have really begun to focus on finance as a key target pressuring folks like BlackRock, JP Morgan, chase, you know, others to play a larger role here. We need those players to come in. Um, you know, before. Might not be able to do this alone. They’re big, but maybe they’re not quite big enough to manage this. And so figuring out the ways to structure their debt and get government regulators involved and finance this whole transition is a really interesting process that we need people to start thinking about.
TY MONTAGUE
A hundred percent look we’re, we’re big fans of the notion of rethinking capitalism on this show. Um, but I want to follow that thread because you mentioned BlackRock and we’d done an episode on BlackRock and we spoke with Tarik Fancy who’s the former head of sustainable investing at BlackRock and left because he just ultimately felt like he was engaged in greenwashing there and his take on the problem is that it is – I don’t want to put words in his mouth – but his basic thesis was that it’s hopelessly naive to expect companies to, essentially self-regulate. And he thinks that regulation, specifically a carbon tax, is the only medicine that will solve the problem of climate change. What do the two of you think about that?
DUNCAN MCLAREN
A carbon tax could be a very helpful tool. It alone is unlikely to solve the problem because, simply, what we’ve seen in the past is that the generic incentive that a carbon tax or equivalent gives is rarely enough to bring about the transformation in technologies. So I think, yeah, carbon tax can help. Not, the, not, not the single answer. Of course, when we’re talking about carbon taxes as the answer, we have to remember that BP spent $13 million in 2018 blocking a carbon tax initiative in Washington state. Um, and then afterwards just said, oh, well it wasn’t the right carbon tax initiative. And my experience going back over the years is that this is a common narrative. When companies are offered taxes, they say the taxes aren’t quite right. And they weren’t voluntary measures when they’re offered voluntary measures, they say, well, then we’ll get undercut by the cowboys. So we need regulatory measures. And when they’re offered regulatory measures, they say, well, this isn’t really the free market. Why don’t we have taxes?
TY MONTAGUE
Yeah. We have a word for that. We call it bullshit. Which brings me to my final question for both of you…
BS RATING THEME MUSIC
TY MONTAGUE
On calling BS, we have something called the BS index or the BS scale, and it goes from zero to 100 zero being the best score, zero BS and a hundred being the worst total BS. I want to ask both of you to rate BP on the BS scale. I’ll start with you Duncan.
DUNCAN MCLAREN
Ah, that’s that’s interesting. I’m gonna throw them a bone and give them only a 90% rating.
TY MONTAGUE
Okay. You’re in a good mood today. Um, all right. Thank you for that Duncan and Jamie?
JAMIE HENN
Ah, well, I’m glad Dunkin set a high bar. You know, I was thinking about this in two ways: one is sort of, the only standard that really matters, which is the kind of standard of physics and chemistry and the climate, in which case, you know, maybe we’ll give bP a score that relates to the amount of money they’re still investing of their capEx in oil and gas, which is something like a 96%. Um, and you know, maybe that’s a good way to do it now to throw them a bit of a bone, uh, as Duncan did. And we’re trying to be charitable. I would say that BP is ahead of the other oil companies and so maybe we’ll drop it down to a 90 as Duncan was saying, because I think to BP’s credit, they have been the only one to really say that they do need to reduce production.
They did write off $17 billion of oil and gas assets by saying that those were stranded and needed to be kept in the ground. and they have talked about sort of the larger need for this transition to happen and so, you know, again, if anybody feels like we’re being a little too harsh on them, um, just remember that they rebranded back in 2000 and here we are today and so I would take everything they do. It’s a bit of skepticism, but, at the very least it’s good to see them beginning to move.
TY MONTAGUE
Agreed. Okay. Listen, this, this was a great conversation. I could have spent the rest of the afternoon talking with both of you. I really appreciate it.
THEME MUSIC
TY MONTAGUE (VO)
So, folks, it’s time to give BP our official BS score.
The company is saying all the right things. But they lost massive amounts of trust when they did this to us the first time. And as all of our experts have pointed out today, their actions, so far, are inadequate, and incoherent at best.
Based on what I have heard today, I’m going to give BP a 95.
To bring that score down, they’ll need to make some big changes. To weigh in with your own score visit our website, callingbullshitpod.com. We’ll track BP’s behavior over time to see if they can bring it down. You’ll also be able to see where the BP ranks on BS compared to the other companies and organizations we feature on this show.
And if you’re starting a purpose-led business, or you’re thinking of beginning the journey of transformation to become one, here are three things you should take away from this episode:
1)Transparency and coherence build trust. It comes up over and over again this season. BP saying that they’re pivoting to become a sustainable energy company and then also trying to convince the world that natural gas is a sustainable, renewable energy resource is just ridiculous. As is claiming you are taking on climate change while at the same time remaining a dues-paying member of an industry trade group thats spreading misinformation about climate change. If your words and deeds lack coherence, then anything you say, even if it’s true, will seem ridiculous.
2)Show me the money! It’s all about action. If BP means it, they need to prove it – through action. Today we’ve talked about important actions like cutting support for industry lobbying groups that are climate change deniers or obfuscators, discontinuing any PR or advertising. And potentially seismic actions like actually breaking the company in two to make very clear that there is a Dirty fossil fuel BP of the past and a clean BP of the renewable and sustainable energy future, and letting investors choose which one they want to invest in. Your actions would undoubtedly be different but the point is, doing is believing.
3) Forget about the oil for a minute, there’s gold in this episode for purpose-led entrepreneurs who want to create the BP’s of tomorrow. As Jamie and Duncan both said, big oil has dragged its feet for so long, that BP and the other super-majors may not be save-able. And that’s fine. Sometimes companies just need to go away. But there is an opportunity here to start the BP of tomorrow: a green energy company that isn’t weighed down by legacy investments in fossil fuel. If nothing else, I hope this episode inspires one of you to make that happen.
I’d like to thank everyone who joined us today: Tyson Slocum, Jamie Henn, and Duncan McLaren. You learn more about them in our show notes.
If you have ideas for companies or organizations we should consider for future episodes, you can submit them on our site callingbullshitpodcast.com
And if we performed while transforming you today please let us know by rating and reviewing us on the iHeart Radio app, Apple Podcasts or wherever you get your podcasts.
Thanks to our production team: Hannah Beal, Amanda Ginzburg, Andy Kim, DS Moss, Haley Paskalidies, Mikaela Reid, Parker Silzer, Basil Soper, and Mijon Zulu.
Calling Bullshit was created by co:collective and is hosted by me, Ty Montague. Thanks for listening.
TY MONTAGUE
I’d love it if you could start out by telling us a little bit about your background and the work that you do.
TYSON SLOCUM
So I’m the energy program director at Public Citizen. Public Citizen is a national consumer advocacy group based in Washington DC. I run all of our energy policy-related work, and that mainly focuses on the oversight and regulation of petroleum, natural gas, and electric power markets. Our goal at Public Citizen is to promote those policies that provide affordable, reliable, and sustainable energy for working families.
TY MONTAGUE
Fantastic. I love that. So let’s get into BP. The topic of today is their energy transition goals and so just to kind of level set – how much CO2 is BP putting into the atmosphere in say an average year?
TYSON SLOCUM
A heck of a lot, it’s difficult to quantify, but they’re one of the largest individual emitters, just because, the scope of their operations, they literally have a presence on every single continent. They have a massive carbon footprint. And then what’s, what’s important here Ty is also, they are a large historical emitter because the company has been around for such a long time.
TY MONTAGUE
Right.
TYSON SLOCUM
That when you look at its entire legacy footprint, it’s even larger and it’s going to be one of the largest, single contributors to climate change from a corporate standpoint.
TY MONTAGUE
And because of climate change, most of these companies have now announced their plans for so-called energy transition, your opinion, how serious do you think these companies are about making that transition?
TYSON SLOCUM
I think they’re very serious about it from a public relations standpoint. But when you look at the day-to-day operation and even look at their capital expenditure plan going forward the next five years, it is dominated by oil and gas and it’s important to note here that in BP’s own financial results, they classify their natural gas production activity in with renewables. So they consider natural gas to be a clean source of energy. When you know, it is absolutely not.
TY MONTAGUE
I did not realize that. That’s crazy.
TYSON SLOCUM
So, so that’s the problem. You know, BP isn’t alone here, but BP is desperately trying to reclassify itself as a clean energy company. And again, Ty, this isn’t new. I mean, it started 20 years ago when they came up with this advertising plan to…
TY MONTAGUE
Beyond Petroleum.
TYSON SLOCUM
Exactly. Exactly. Yeah. So, BP has been in this process of reinventing itself from a public relations standpoint for a very long time, but in terms of its operational standpoint, BP is an oil and gas company, period.
TY MONTAGUE
Yeah. So, within two weeks of taking the reins as CEO at BP in February of 2020, Bernard Looney outlined a whole new purpose for BP. He says it is to re-imagine energy for people and our planet. We want to help the world reach net zero and improve people’s lives. And then down in the details, he lays out, specific goals for getting BP to net zero. He calls them aims, which I find kind of a weaselly word. How about commitments Bernard, but, okay. So he says, our first goal is net-zero operations. Our aim one is to be net-zero across our entire operations on an absolute basis by 2050 or sooner, this aim relates to scope one and two G H G emissions. So, first of all, what does that mean?
TYSON SLOCUM
So that just means the emissions footprint of BP and its operations, not of how its fuels are going to be consumed and therefore add to climate change. And so, you know, just from the very, get-go their definitions of reaching net-zero, have a massive…
TY MONTAGUE
Flaw.
TYSON SLOCUM
Exactly a huge flaw.
TY MONTAGUE
So just to, to school me up, let’s move to their aim two: Our aim two is to be net-zero on an absolute basis across the carbon in our oil and gas production by 2050 or sooner, this is our scope three aim and is on a BP equity share basis excluding holdings in Rosneft, the Russian company run by Putin’s number two guy that they just announced they were going to divest of. But, staying with what’s on their website, that net two goal to be net-zero on an absolute basis across the carbon in our upstream oil and gas production by 2050 or sooner. What does that mean?
TYSON SLOCUM
So there, they’re talking about scope three emissions for their oil and gas operations, which appears to be more comprehensive, but still, this is a goal by 2050. And that isn’t really that ambitious. We’re looking at another generation or more of significant oil and gas, extraction, opportunities for, BP. And so in terms of meaningful action to address the climate crisis, I don’t see the ambition in this, you know, net-zero goal by 2050 as being relevant.
TY MONTAGUE
So you don’t think it’s enough and the timeline is too long. Is that sorta your take?
TYSON SLOCUM
Absolutely. And this is, this is the challenge, right? It seems sort of silly for an oil and gas company, especially one as large as BP to be talking about getting to real meaningful net zero. Whether we’re talking about five years or 40 years, because you’re gonna have to transform the fundamentals of the company and I don’t see where that is happening yet at BP. You know, we’re talking about sort of nebulous goals far off in the future. I don’t see how those long-term goals are affecting today’s operational priorities at BP. I still see capital allocation at BP being first and foremost, allocated to continued oil and gas development.
And that’s the big challenge. And, you know, for any large oil major, Ty, there’s going to be a market challenge to doing a real transition to renewables, for example. Because during that transition, let’s say BP has a real meaningful plan, which, which I don’t see, but just for conservation purposes, to transition off of oil and towards renewables, the market is just going to want to see the BP split into separate companies because the market value of a pure, renewable play is going to be dragged down by the continued operations of oil and gas, which the market is not going to see as having enough growth. And so, as long as BP remains an integrated company that is trying to get into renewables while still primarily being an oil and gas company, those oil and gas operations are always going to drag on the value of the renewable investments. And so what you would see from Wall Street is they would say split up company.
TY MONTAGUE
Interestingly, a former CEO, John Browne, is recently on record saying he thinks that’s a good idea to spin out the renewable energy assets as a separate company, essentially create BP future, which is rapidly growing less capital intensive and valued at a premium by investors and then by default create BP past, which is the oil and gas assets, capital intensive, unloved by the market and in decline. And then just let the market decide. What do you think about that?
TYSON SLOCUM
I think that’s how all of these oil and gas companies are gonna have to go. If you’re going to remain a publicly-traded company, offering shares to the public, that’s the only strategy that makes any sense. And the fact that BP hasn’t done that split yet shows that their financial and capital commitments to renewables aren’t yet meaningful enough to orchestrate that split.
TY MONTAGUE
Yeah, Looney doesn’t like the idea of splitting up. He actually responded to Brown and he said he wants to use the cash of the high carbon business to fund the transition. He calls it, what is it? He’s got a catchphrase for it, performing while transforming.
TYSON SLOCUM
That would be believable if that’s what was actually happening. But when we look at the balance sheet, BP is still pouring billions of dollars every year from its earnings on oil and gas operations into more capital investment for additional oil and gas exploration and production, and into dividends. Because the way that these oil companies try and keep their stock price attractive, because they’re being eclipsed, all of them by companies like Tesla and renewable energy companies that just have way more growth potential, the way that BP markets itself to fund advisors and to other big institutional investors is the lucrative dividend that they pay out in cash every quarter. And so a bunch of the profits from their oil and gas operator are just going into pumping up their stock price to make it continually attractive. And so until we see a deviation from big capital investment in oil and gas and the big investment in dividends, this is inaccurate. They are not, moving that profit from today’s oil and gas operations and to, into, tomorrow’s renewables.
TY MONTAGUE
Sticking with the, the aims that they have on their website I just want to go through a couple more that frankly, I just don’t understand. Aim three is to cut the carbon intensity of the products that we sell by 50% by 2050, or sooner. What does carbon intensity, what does that mean?
TYSON SLOCUM
So this is talking about the relative carbon emissions for energy resources. So a lot of this is BP and some of the other majors like Chevron and Shell have been increasing their investments into natural gas. And so the way that they measure it is gas has a lower carbon intensity than oil. It is not a clean resource, right? It is a fossil fuel, but compared to oil. And so a lot of this carbon intensity talk is really about a shift into natural gas. And you know, a lot of that is because they see continued market opportunities for gas in the power generation sector, in the industrial sector and in the agricultural sector with fertilizers and so forth. And so again, this is the challenge they’re using these words that sound like they’re doing a serious pivot into renewables, but it’s not, it’s just putting slightly more investment into gas, over oil, and they’re able to count that as a lower carbon intensity going forward. It’s not going to deliver us to a path to meaningfully addressing the climate crisis.
TY MONTAGUE
Right. Okay. So aim four is to reduce methane. It says our aim four is to install methane measurement at all of our existing major oil and gas processing sites by 2023, publish the data and then drive a 50% reduction in methane intensity of our operation. So, first of all, why is this important? What’s special about methane?
TYSON SLOCUM
So methane is an extremely powerful greenhouse gas. It is many, many, many times more powerful than carbon dioxide. It doesn’t last in the atmosphere as long as CO2 but methane for the briefer time that it is in the atmosphere after being released is far more potent. And so the Obama administration, in 2012, introduced sweeping requirements and mandates to control methane emissions from oil and gas operations, and BP, and all the other oil companies successfully fought it off.. Now we’ve had a change in heart and really what, what changed was in November 2020 an energy company that is, partly owned by the French government called N G canceled, a major liquified natural gas export deal with a US based LNG exporter because of the lack of any meaningful methane regulations on US gas production, or us gas exports, and that cancellation of that $7 billion deal was a wake-up call for oil and gas producers, everywhere that all of a sudden there was a emphasis on controlling and measuring the carbon content of natural gas production. And so we have now seen a total 180, where BP actually was sending out tweets in support of Biden administration efforts to revive a federal regulation over methane emissions. And so this is BP trying to get out ahead of a market trend, Oil companies are uniformly against regulation unless that regulation can provide market access opportunities. And in this case, regulating methane emissions and documenting your ability to limit fugitive emissions is seen as a market opportunity because you’re able to slap a label of clean methane on your natural gas and make it more desirable, for export and consumption in global markets. So it would have been great if BP was making this announcement a decade ago.
TY MONTAGUE
Another point that they make on the website to help the world get to net zero is aligning associations. “Our aim is to set new expectations for our relationships with trade organizations around the globe.” In September of 2020, September 20th of 2020 in a publication called the Resilience, they pointed out that BP still supports eight anti-climate lobbying groups, as of that date and, you know, that’s 18 months after Bernard Looney took his job and, they had plenty of time to clean that up by September of 2020. Are you aware of any issues there and what does that make you think about BP?
TYSON SLOCUM
Yeah, absolutely. This is a huge problem. And for a second, let me just talk about trade associations in general, because it’s sort of a fascinating, crazy situation that your listeners may not be familiar with. So what a trade association let’s take the American petroleum Institute, which is the largest and probably the most successful trade association, lobbying group in the United States today, it’s got an annual budget in excess of $300 million a year. And so what API does is it collects dues from BP and Exxon and all the other companies and allows them all to actively collaborate on influencing legislation and regulation. So while oil companies compete in the marketplace, when it comes to influencing our politicians and our regulatory structures, they are actively colluding because they have a shared common interest. And so, you’re absolutely right. That BP’s stated commitment to only joining those trade associations that align with efforts to address climate change, do not meet reality because they continue to pay millions and millions of dollars in dues to trade associations that are actively fighting against climate solutions.
TY MONTAGUE
Looney has also made a few subsequent promises after he rolled out this plan. One of them was in August of 2020. He said that in, he said to investors that BP will reduce oil and gas production by 40% within a decade. And that was two years ago. So he’s got eight years left. And that they would stop exploring for oil and gas fields in new countries in the same timeframe.
So I guess, do you read from that, that he’s saying he’s prepared to leave oil in the ground to make this transition work?
TYSON SLOCUM
I don’t think that he’s realistic about those commitments. I mean, these are non-binding commitments, first of all, they’re just public announcements.
TY MONTAGUE
Yeah. Promises.
TYSON SLOCUM
So without a binding commitment, the company can make whatever adjustments and changes it wants. I don’t see this as to be very honest and meaningful commitment. BP, is still committing the vast majority of its capital investment into exploration and production. And that tells me that BP remains an oil and gas company, period.
TY MONTAGUE
One of the things that we’re exploring on this show is an evolved version of capitalism, let’s call it, that includes some of the externalities that companies really like to ignore. So right now, for instance, there are a lot of externalities that are not priced into a gallon of gas.
The costs of climate change, for instance, right? And in a way it keeps the price of a gallon of gas, artificially low. For example, the New York Corps of engineers is proposing a seawall that’ll cost $119 billion dollars to protect the city from rising sea levels – is that cost figured into every barrel of oil today?
TYSON SLOCUM
Not at all. In fact, there are no federal regulations of carbon emissions from oil and gas operations. So they’re getting a free pass and you just summed it up correctly that there are large externalities with fossil fuel production and consumption that are not reflected in the market price and so all of society has to pick up that tab. Look at the infrastructure bill that President Biden just signed into law at the end of last year. It includes $11 billion dollars of taxpayer money to clean up coal mines. You know, why, why aren’t coal companies doing that? There’s also billions of dollars in there for taxpayer money to plug up old and abandoned oil and gas wells. Some of those were BP’s old oil and gas wells. So, again, the fossil fuel companies enjoy today’s profit of extracting these fuels without any of the long-term financial obligations that their business causes.
TY MONTAGUE
That needs to change. I’ve read that there are a number of cities and towns who have actually started to sue fossil fuel companies to try to recover some of that money. Have any of these lawsuits succeeded so far?
TYSON SLOCUM
They’re all moving through the federal and state court systems. And, they’re using very inventive tort law, you know, tort is if you sue for damages, I slipped on the sidewalk in front of your business because you failed to maintain it and your failure to maintain that caused me bodily injury. I am, due, damages for my pain and suffering. So this is sort of the same thing that the oil and gas industry knew decades ago that their business was contributing to climate change but didn’t do anything about it. And that’s sort of the key from a court decision that they knew that their business was creating these harms and they did nothing to address them. And we all are suffering as a result. And I think that’s part of the motivation for a company like BP to try and get out ahead and to say, listen, we’re in favor of federal action to regulate these things so that we can try to get out from these, tort lawsuits. And in fact, there’s a plan that’s, being underwritten by some of the major oil companies to establish a carbon tax in the United States. And there’s a lot of merit to that. But when you look at the details of their proposal, they want the carbon tax in exchange for two big things. One, evisceration of climate regulations over their business and immunity from tort lawsuits, very similar, very similar, very similar to what the gun manufacturers got.
TY MONTAGUE
That’s annoying, and shades of the tobacco industry as well. You know, they deny, deny, deny, deny, deny, and then, you know, finally, events catch up with them.
You know, from our perspective, on this show, we’re looking for companies that are purpose led. These are companies that by and large have a conscience. They actually are trying to make the world better. And when they see a problem, they try and solve it. They don’t wait for the government to legislate.
And so when BP says they’re trying to take on climate change, our perspective is great. You sound like a purpose led company, but is their intention pure? Do they really mean it?
And so one of the things we look for is self-regulation. By agreeing to a carbon tax, if they’re trying to get out of paying for any liability for past harm, that does not clear our bar, at least at, at this show, like we would call bullshit on that. So why do you think Looney announced these goals in 2020? And why should we trust BP this time around?
TYSON SLOCUM
I think the reason that he’s making this sort of re-commitment on a public relations scale is because now there is a spotlight from large institutional investors. And these institutional investors have really in just the last couple of years, ratcheted up their pressure on companies to show them the money in terms of commitments on climate change. And so for an oil and gas company, that’s sorta hard to do when your business is in fossil fuels. And so they’re seeking to sort of mollify these institutional investors with a very slick public relations campaign that they’re trying to rebrand BP again. And I don’t know how many times one company can continually rebrand itself as being Beyond Petroleum, but that’s what they’re trying to do here. And so, that’s where we are right now with BP. It’s difficult for them to escape their culture of non-compliance in terms of safety and environmental record.
And they’re trying desperately to get back into that decision-maker seat, where they are one of the key brokers to try and navigate a new climate deal. But their reputation has taken such a big hit. I don’t know if, if they’re going to be the doing it again.
TY MONTAGUE
What is the number one action that you think Bernard Looney should take to actually deliver on, their stated purpose to re-imagine energy for people and our planet?
TYSON SLOCUM
First, I would exit all fossil fuel trade associations. Get out of the American petroleum Institute and all of the others. Second. Commit to specific, climate initiatives, legislative climate initiatives, because all of these companies can do they’re unilateral goals on their websites, but without some sort of binding operation through national governments. We’re not going to see the kind of meaningful action that’s required. And so I want to see BP support climate initiatives without the harmful caveats like it’s done on carbon taxes where it says we’ll support a carbon tax, if we have immunity from prosecution under tort law, right?
I think Looney needs to commit to a specific timeframe to split off the company if he’s serious about real aggressive investments in renewables, then he’s got to put his money where his mouth is. And right now, when I look at where BP’s money is, it’s all in oil and gas.
TY MONTAGUE
Tyson, is BP a bullshitter?
TYSON SLOCUM
An absolute bullshitter. So just BP stop the charade, you’re oil, and gas.
BS RATING THEME MUSIC
TY MONTAGUE
Love it. Okay. Last question. On this show, we have a tool that we call the BS scale and it goes from zero to 100, zero being the best zero BS, 100 being the worst, total BS. So on a scale of one to a hundred on the BS scale, where would you rate BP
TYSON SLOCUM
- They’ve got legitimate investments in clean energy. It just is minuscule in proportion to their investments in oil and gas. So I have to give them credit for some of their genuine pivot. It’s just not nearly enough. So 90.
TY MONTAGUE
Love it. Perfect. Tyson Slocum. Thank you so much for being on the show. I really enjoyed it.
TYSON SLOCUM
Absolutely. My pleasure.
INTERSTITIAL MUSIC
TY MONTAGUE (VO)
Ok folks, it is time to make the call: is BP really “ Reimagining energy for people and our planet?” Based on what I’ve heard so far, we gotta call Bullshit. Even if Looney is serious, and that’s questionable at this point, BP isn’t taking some fairly obvious actions that would signal that seriousness. But remember, Bullshit is a treatable condition. All it takes is action.
After the break, I’ll be joined by two additional experts in the oil business and climate change to help us explore the actions BP should take to fix it. Stick with us.
INTERSTITIAL MUSIC
TY MONTAGUE (VO)
Welcome back. New CEO Bernard Looney is saying a lot of the right things, but we’ve now drilled into it and we struck… BS. So what are the actions Bernard and his leadership team would have to take to plug this gusher and actually win back our trust? I’ve invited two experts to join me to propose the concrete actions that BP needs to take. – Jamie Henn, co-founder of 350.org and director of Fossil Free Media, and Duncan McLaren, Research Fellow at Lancaster Environment Centre with an in-depth expertise in climate and energy policy.
TY MONTAGUE
Jamie, I’d love to start out by just having you tell our listeners a little bit about your background and the work that you’re doing at Fossil Free Media.
JAMIE HENN
So I started my career in climate activism as one of the co-founders of three fifty.org, which grew into one of the largest international campaigns on climate change, and over the decade of working there I worked on a lot of different international mobilizations and projects often wearing the hat of our communications director. And over the years, one of the things that I noticed is we were trying to raise awareness about the climate crisis and push our governments to act was that every time environmental campaigners would try and come out and spur the world into action, we would face a massive backlash from the fossil fuel industry, often in the form of PR and advertising. And so, as I was thinking about the next stage of my career at the beginning of 2020, um, I started talking with a few other colleagues and friends about this idea of seeing if we could set up a operation that would both provide. Good communication support for groups who are taking on the fossil fuel industry, but also see what we could do to try and throw a wrench in the gears of big oil’s propaganda machine. And so out of that fossil free media and a campaign that we’re running called clean creatives were born and through both of those efforts, we try and help environmental groups do a better job of communicating to the public about the energy transition that we need to see while also calling out the work that the fossil fuel industry and their allies are doing to try and pollute the airwaves, just as they pollute the atmosphere.
TY MONTAGUE
Love that. Professor Duncan McLaren, welcome to Calling BS.
DUNCAN MCLAREN
It’s a pleasure to be with you.
TY MONTAGUE
I’d love to have you tell our listeners a little bit about your background and your area of focus in the energy sector.\
DUNCAN MCLAREN
Thanks. Well, I’m sort of on my second career now, my first was working for environmental NGOs on a whole range of topics from sustainable development to corporate accountability, renewables development, and of course climate targets. But in 2011 I gave that up, for family reasons mainly, but embarked on a PhD, looking at geoengineering technologies in the context of the climate justice debate and that sort of led me into 10 years of working on particularly carbon removal and more broadly what I call the problems of technologies of prevarication. The ones that allow us to believe that we are going to solve the climate problem in the future with a new technology, rather than by delivering behavior change in lifestyle change today.
TY MONTAGUE
That’s great. Great to have you here So let’s jump right into some ideas for fixing BP. Jamie, I’m going to ask you to go first in two minutes or less. What’s the number one thing that you think BP should do to win our trust that they really mean what they say?
JAMIE HENN
Well, I think that there’s a few different categories of where we need to see action from BP. And I’ll start with the most obvious, which is that they need to stop exploring for new oil and gas and fully begin to wind down their existing production in line with the Paris agreement. They’ve made some commitments around that,but it’s needless to say they’re not yet at the pace, the scale, or really the commitment that we would need to see if they were serious about making that transition. So the nuts and bolts of actually doing the work to stop oil and gas production, that’s leading to the carbon, going into our atmosphere versus making yet more pledges and long-term targets is really where we need to see action, but I want to highlight a couple others in my remaining minute here.
First off is, on the lobbying and political front, you know, we’ve seen a lot of rhetoric, as you said, from Bernard, Looney and BP about how they want to aid the energy transition. But as I speak, they continue to remain members of big oil trade associations and front groups like the American petroleum Institute, which is the leading edge of the industry’s attack on climate policy here in the United States and BP over in Europe, continues to lobby for things like natural gas being included in the European union’s standards around investments, which is obviously not a renewable energy is it’s meant to meet their criteria. So stopping that lobbying is extremely important. And finally, along with that goes, stopping this sort of greenwashing and advertising that they’re doing is very clearly meant to mislead the public into believing that BP is serious about the energy transition when the vast majority of its investments are still going into oil and gas.
TY MONTAGUE
Great. Those are all very interesting and we will, unpack some of those in due course. Duncan, you’re up next in two minutes or less, what is the number one thing or things that Bernard Looney should do to convince all of BP stakeholders that he actually means what he says?
DUNCAN MCLAREN
BP needs to set absolute hard and fast production reduction targets. Stop messing around with intensity targets and scams about which scope of emissions are going to be covered. Set targets to reduce the amount of oil and gas they produce and those targets need to be matched so that there is reliable, permanent, guaranteed carbon removal on a ton by ton basis for any residual production that happens, let’s say after 2040, and probably about 50% of anything after 2030, that would get them in line with the Paris requirements.
Why do I ask for this? Well, it’s centrally about a climate justice case. Net zero is a great global target. It’s got a lot of people converging around it saying, we want to do this, but it’s ambiguous. It could mean an awful lot of emissions matched by an awful lot of removals. Imagine two elephants sat on a Seesaw as we call it a teeter-totter as the Americans call it. That’s not very stable or sustainable. It’s likely to break. What we need is a narrow convergence, where there are only a few residual emissions and the equal amount of carbon removal. So two mice sat on the teeter-totter may, that means that you have less impacts from the residual emissions and all the things associated with that: the extraction, the oil spills, et cetera. These are not just climate impacts when we go digging for oil and gas.
TY MONTAGUE
Both of those are great. It’s my turn now. I submit this humbly, Looney needs to take an action that would cause me to suspend my disbelief and when I think about it, my skepticism really comes from two things. Obviously the fact that we’ve been here before with BP, they talked a huge game about moving, in quotes beyond petroleum, and then turned around and created one of the largest environmental disasters in the history of the oil business in the gulf of Mexico. But there’s a second thing that makes me skeptical that really centers around the expectations of existing shareholders. You know, we have this financial system where investors are trained to expect quarterly reporting and positive quarterly results. And they’re also trained to punish CEOs who don’t deliver them. And this obsession with quarterly results is a major impediment to any CEO who is serious about transforming a company and so my idea is that Bernard Looney should announce that BP is going to discontinue quarterly reporting. And I think he should say that his rationale for this is that the only way to create long term shareholder value is to think and act on behalf of shareholders in the long term. And there’s precedent for this. Paul Poleman did it at Unilever more than 10 years ago. And Paul also managed to deliver outstanding financial results, but those results took time. And I think that that’s what Looney should do is buy himself some time, by taking that one action. And I think that would signal real change at BP. It would signal that the board is with him on this transformation journey that he has embarked on. It would set the stage for a number of additional actions that would continue to build trust. For example, publicly tracking the progress that they’re making toward the goals that they’ve put forward transparently reporting on problems that they’ve encountered along the way without tanking the stock necessarily.
So I’ll pause there.What are your thoughts on that? Or, any of the ideas have been put forward?
JAMIE HENN
Well, I think it’s interesting that you brought up investors because I think a lot of what we’ve seen out of BP is aimed at a few different audiences right now. And we talk about marketing and PR is really focused on the general public, but a lot of what BP has been doing, I think is best understood as trying to persuade their investors and not just individual investors, but large institutional investors like pension funds and others that they’re simultaneously serious about pursuing climate action while also maintaining their oil and gas business, BP is trying to do this awkward dance where it wants to convince its more green oriented investors that it’s serious about climate. While also showing that it will continue to get high profits from oil and gas. And so this dance is what I think we continue to see from big oil majors is on the one hand trying to market themselves to concerned investors and regulators and the public as being serious about climate action. While also turning around to some of their other shareholders saying, don’t worry about all of that. We’re still serious about oil and gas, and we’re going to drill baby drill, until the very last second.
TY MONTAGUE
He’s got a name for it, performing while transforming And that just to me reeks of bullshit. Duncan, what do you think about any of that?
DUNCAN MCLAREN
Yeah, to turn to your suggestion Ty though, of, uh, discontinuing, quarterly reporting. So quarterly reports, They instill a short-termism in corporations that goes against all we want to achieve on the environmental and sustainability front. But at the same time, it’s the over long-termism of targets like net zero by 2050, that is allowing the exploitative attitude. We need action now that cuts emissions dramatically in the next decade, if we’re going to be compliant with Paris. So I think stopping quarterly reporting could be a component of what BP should do. They would also clearly need to improve the nature of their reporting so that it’s, properly, consistent with the different impacts they’re having and to be accountable to stakeholders outside of the shareholders themselves.
TY MONTAGUE
Yeah. And, and, I heard you both in your ideas essentially say that the aims that BP has put forward are soft. Even, for instance, net zero by 2050 can be achieved in a lot of different ways. And I don’t want to put words into your mouth, but it’s, you can do it by planting a lot of trees and offsetting, Or you can do it by actually not pumping oil out of the ground. And you are advocating for the latter rather than the former. Is that correct?
DUNCAN MCLAREN
I’m definitely saying that BP cannot contribute to net zero if it goes on increasing its production and emissions and believes that it can offset all of that. So at the moment, while 2018 BP bought 850,000 tons of carbon offsets, it was responsible for around 1.6 gigatons of emissions. So you’ve got to be cutting emissions. You can’t just be offsetting. What is left that you might offset in some way, you have to offset through balancing it with things that actually remove carbon dioxide from the atmosphere. and they have to remove carbon permanently or Jura bubbly.
TY MONTAGUE
Can you explain some of those permanent carbon removal technologies?
DUNCAN MCLAREN
Most of them are currently quite speculative. There are technologies that use renewable energy to capture carbon dioxide from the atmosphere with a chemical agent of some sort to expose this chemical agent to the atmosphere, it absorbed some CO2. You then put it in an enclosed chamber, expose it to heat or pressure. The CO2 comes off, you can pipe it off, compress it and inject it underground. And as long as you do that in somewhere like a saline aquifer, it will almost certainly stay underground for thousands of years. Another very permanent form of carbon removal is called enhanced weathering. Again, you need some renewable energy, you grind up, basalt or other reactive rocks, quite finely spread it on the land surface and as the rain flows through it, it removes, or effectively the carbon dioxide in the rain water reacts with the rock goes off in the, runoff. And at least in theory ends up in the oceans where it ends up as, carbonite, and that’s where our limestone comes from.So that’s, that’s millions of years. So there’s a lot of these techniques. None of them are perfect. None of them would be scalable infinitely, but where scientists are hopeful, let’s say that may be somewhere between two and five gigatons a year could be removed using these technologies in the latter half of this century, once, once they’ve been developed.
TY MONTAGUE
So it sounds like once again, they just need to stop producing oil. I want to pivot to Jamie, because a big part of the BP story, Jamie relates directly to your thesis at fossil free media, that ad agencies and PR companies are some of big oils or, or maybe big carbon’s not so secret weapons. How big a problem is the marketing industry in this equation?
JAMIE HENN
I think it’s a huge problem. And I think that PR and advertising and marketing have been one of the largest barriers to climate action that just because it’s in such plain sight, we often don’t see it. and BP is really interesting case study because I think that of all the oil majors, they have always been the most attuned to their public image. But it’s worth remembering that as you mentioned earlier, it was all the way back in 1997, that, the previous CEO of BP was making announcements about how they were going to become a new type of energy company. And that led to then the rebrand in 2000, of BP to Beyond Petroleum.
TY MONTAGUE
Yeah, John Browne.
JAMIE HENN
I mean, that was 20 years ago, that they made this beyond petroleum, uh, rebrand. They’re not beyond petroleum 20 years later. and I think that we should take that lens towards the commitments that they’re making today that maybe there’s a higher degree of seriousness. There’s more political pressure, but BP hasn’t shown in the past that it was serious about any of these claims.
There’s a fascinating example of this from the current era, which is actually a leaked presentation that came out at the beginning of 2020, which is right when Bernard Looney, the new CEO is taking on BP and wanted to restructure the company.
And the presentation was done for BP by the ad agency, WPP, which is the world’s largest kind of advertising conglomerate. And this. Yeah, holding company. And this was an effort by WPP to kind of bring together some of its top people and say, we’re going to kind of do a first stab at what a new brand new image, new marketing approach for BP could look like that they would then use and all the advertising and all the advertising relationships that they have.
And it’s really a fascinating document because it basically walks through the fact that yes, BP’s, you know, core businesses, oil, and gas, and we’re going to be expanding upstream production, yada, yada, yada, but also, you know, we need to convince the public that quote, we get it on climate change. And they run through this incredible series of slides about how the world changed in 2019 because of the global climate strikes and Gretta, Thuneberg, and everything that had happened. And BP was wasn’t trusted on this important issue of climate change that the public cared about. So they needed to do something to signal that they “got it” on climate change. It could be part of the energy transition. Of course, nothing in the presentation was actually about concrete things that they would do, like stopping oil and gas production.
It was all about the ways that they would remarket themselves and so I think it’s worth all of us, you know, being able to see that stuff is what it is, which is propaganda.
TY MONTAGUE
It seems clear that the economics of wind and solar have gotten much, much better, very compelling these days. Isn’t there a strong argument for BP just being a responsible steward for their shareholders’ money, investing more money in those technologies and you know, leaving some oil in the ground?
DUNCAN MCLAREN
I think the problem is that from the shareholder perspective, from the workings of contemporary capitalism perspective, BP has these huge assets that are reserves of oil and gas in the ground and their corporate valuation reflects that their ability to pay dividends reflects that. And as soon as they start saying, oh, we’re going to leave some of that in the grant, then yes, they are managing a financial decline. And in a sense, that means that certainly my challenge to, to Bernard Looney, to say “set targets for reducing production” is going to be very hard as a businessman for him to take.
JAMIE HENN
I just, yeah. I want to zero in on this point on it’s making, because I think it’s so critical. I think that bP and other oil majors want to convince the public that they’re key to the energy transition. The reality of it is that yes, there is money to be made in clean energy, maybe big oil companies aren’t the best suited to do that. You know that there are clean energy companies that should be doing that. And I think it also raises a question for us. Do you really want BP to be controlling the energy of the future? This is the company that has for decades run over communities violated international human rights law spilled oil into the Gulf of Mexico, failed to clean it up, failed to pay the money that it was owed. I don’t want BP running the clean energy of the future. I’d much prefer that It’s managed publicly that it’s in smaller cooperatives and we have that choice right now to make that transition and to Duncan’s point what we need for BP? They should be held accountable for the damage that they’ve done and the ill begotten profits that they’ve made during a period in which we knew and they knew from their own science that every barrel of oil they dug out of the ground was furthering a planetary catastrophe They knew that last quarter when they made record profits. So why should they and their shareholders who also knew that have decided to stick with BP why should they be rewarded for that?
DUNCAN MCLAREN
So if I may, what I’d like to emphasize about that is how the dynamic of oil companies wanting to maintain the value of their reserves. And oil companies, doing political lobbying and marketing to position themselves as part of the energy transition, are both about the modern face of climate denial. The modern face of climate denial is about delay it’s to say, oh yeah, of course now we’re we happily accept that climate change is happening. We understand there’s a problem, but if we move too quickly, then we cause all sorts of other problems. And those things all converge around them extracting the most profit from their asset base and continuing to prolong the climate crisis.
TY MONTAGUE
I, I want to ask you both to suspend your disbelief for a minute, because in this part of the show, I do want to explore actual ideas. Like if we’re going to take them seriously and say, okay, they really mean well, they’re really trying to do this. What should they do? So, so let me run a couple of ideas past both of you and just get your, get your take. So, first of all, John Brown, the, former CEO of BP who actually initiated the beyond petroleum rebrand and, and began, what I believe was at the time, a genuine attempt at a transition to being a sustainable energy company. He recently said that he thinks that the company should be split in two, , to spin out the renewable energy assets that the company has as a separate company, essentially create BP future, which is rapidly growing less capital intensive and valued at a premium by investors and BP past the oil assets, which are capital intensive, unloved by the market and in decline. And then just let the market decide. So this is a former CEO saying this what’s your take on that?
JAMIE HENN
Yeah, that would be interesting if BP moved in that direction. The one thing I’d raise on it as a challenge. I know we’re trying to be a bit more optimistic here, but since Duncan and I are good skeptics, is that, um, is that the liability issue. If BP has known for decades, that their products were causing climate change, like big tobacco knew that its product was addictive and causing health impacts, what sort of responsibility do they have to help pay for the damage that those products have caused?
And so when we talk about BP being able to spin off a company, you know, that’s often what companies do to avoid liability. And so I think the question would be making sure that, um, you know, they’re not able to kind of dodge their social responsibility by creating, a dirty version of their industry and then hiding the assets there,
DUNCAN MCLAREN
But maybe to embroider the thoughts of, what would BP do if they were admitting some liability? What would be the sorts of investments or spending they should do? And here, I think they get the idea of a “just transition” – an energy transition that actually pays attention to social justice in terms of consumer need and worker need, would be helpful. And you may know there’s been an extinction rebellion spin-off campaign in the uK recently called insulate Brittain. Well, I think that’s what BP should do, that they should actually do the program of retrofitting good insulation in the homes of people in fuel poverty, particularly the homes of people who are in fuel poverty because of the rising gas prices. And they should go a step further, of course, which is to go around to those homes and install heat pumps instead of gas boilers, so that they could then cut the demand for the product that they’ve been selling and profiting from the cost of climate change.
JAMIE HENN
I mean, that’s a really important point and I think Duncan raises another piece of this, which is interesting, which is that – for the transition to take place we also have to deal with all of the oil and gas infrastructure that currently exists. You know, you can’t just turn it off and then leave it there, spewing methane for decades to come. And so there’s an incredible amount of work that BP could be doing, and it could be engaging probably more people that are currently in place to deal with all of the various oil and gas wells and infrastructure that is left behind these in many ways are forever liabilities that we’re going to have to deal with. Um, it’s not quite so simple as plugging a well and hoping that it never admits nothing again. You need people to go back and check it and verify that it’s been done, right. And then, you know, manage that process going forward. And so there, there is a role in a way to kind of re-imagine. Energy companies of the past, these oil and gas giants playing a role as Duncan was saying, and helping kind of do the retrofits and transition.
We need to move to clean energy, but also taking some responsibility for managing the damage that they’ve done and making sure that over the decades to come, we’re not having big blow outs of, you know, come CO2. That’s been pumped somewhere or numerous oil and gas Wells, continuing to leak methane and push us past global limits.Now Ty to your question about shareholders. This may require us rethinking some of these pieces when it comes to capitalism or beginning to at least put in some interesting government incentives and doing the finance work to do that. And so I think that, campaigners over the last few years have really begun to focus on finance as a key target pressuring folks like BlackRock, JP Morgan, chase, you know, others to play a larger role here. We need those players to come in. Um, you know, before. Might not be able to do this alone. They’re big, but maybe they’re not quite big enough to manage this. And so figuring out the ways to structure their debt and get government regulators involved and finance this whole transition is a really interesting process that we need people to start thinking about.
TY MONTAGUE
A hundred percent look we’re, we’re big fans of the notion of rethinking capitalism on this show. Um, but I want to follow that thread because you mentioned BlackRock and we’d done an episode on BlackRock and we spoke with Tarik Fancy who’s the former head of sustainable investing at BlackRock and left because he just ultimately felt like he was engaged in greenwashing there and his take on the problem is that it is – I don’t want to put words in his mouth – but his basic thesis was that it’s hopelessly naive to expect companies to, essentially self-regulate. And he thinks that regulation, specifically a carbon tax, is the only medicine that will solve the problem of climate change. What do the two of you think about that?
DUNCAN MCLAREN
A carbon tax could be a very helpful tool. It alone is unlikely to solve the problem because, simply, what we’ve seen in the past is that the generic incentive that a carbon tax or equivalent gives is rarely enough to bring about the transformation in technologies. So I think, yeah, carbon tax can help. Not, the, not, not the single answer. Of course, when we’re talking about carbon taxes as the answer, we have to remember that BP spent $13 million in 2018 blocking a carbon tax initiative in Washington state. Um, and then afterwards just said, oh, well it wasn’t the right carbon tax initiative. And my experience going back over the years is that this is a common narrative. When companies are offered taxes, they say the taxes aren’t quite right. And they weren’t voluntary measures when they’re offered voluntary measures, they say, well, then we’ll get undercut by the cowboys. So we need regulatory measures. And when they’re offered regulatory measures, they say, well, this isn’t really the free market. Why don’t we have taxes?
TY MONTAGUE
Yeah. We have a word for that. We call it bullshit. Which brings me to my final question for both of you…
BS RATING THEME MUSIC
TY MONTAGUE
On calling BS, we have something called the BS index or the BS scale, and it goes from zero to 100 zero being the best score, zero BS and a hundred being the worst total BS. I want to ask both of you to rate BP on the BS scale. I’ll start with you Duncan.
DUNCAN MCLAREN
Ah, that’s that’s interesting. I’m gonna throw them a bone and give them only a 90% rating.
TY MONTAGUE
Okay. You’re in a good mood today. Um, all right. Thank you for that Duncan and Jamie?
JAMIE HENN
Ah, well, I’m glad Dunkin set a high bar. You know, I was thinking about this in two ways: one is sort of, the only standard that really matters, which is the kind of standard of physics and chemistry and the climate, in which case, you know, maybe we’ll give bP a score that relates to the amount of money they’re still investing of their capEx in oil and gas, which is something like a 96%. Um, and you know, maybe that’s a good way to do it now to throw them a bit of a bone, uh, as Duncan did. And we’re trying to be charitable. I would say that BP is ahead of the other oil companies and so maybe we’ll drop it down to a 90 as Duncan was saying, because I think to BP’s credit, they have been the only one to really say that they do need to reduce production.
They did write off $17 billion of oil and gas assets by saying that those were stranded and needed to be kept in the ground. and they have talked about sort of the larger need for this transition to happen and so, you know, again, if anybody feels like we’re being a little too harsh on them, um, just remember that they rebranded back in 2000 and here we are today and so I would take everything they do. It’s a bit of skepticism, but, at the very least it’s good to see them beginning to move.
TY MONTAGUE
Agreed. Okay. Listen, this, this was a great conversation. I could have spent the rest of the afternoon talking with both of you. I really appreciate it.
THEME MUSIC
TY MONTAGUE (VO)
So, folks, it’s time to give BP our official BS score.
The company is saying all the right things. But they lost massive amounts of trust when they did this to us the first time. And as all of our experts have pointed out today, their actions, so far, are inadequate, and incoherent at best.
Based on what I have heard today, I’m going to give BP a 95.
To bring that score down, they’ll need to make some big changes. To weigh in with your own score visit our website, callingbullshitpod.com. We’ll track BP’s behavior over time to see if they can bring it down. You’ll also be able to see where the BP ranks on BS compared to the other companies and organizations we feature on this show.
And if you’re starting a purpose-led business, or you’re thinking of beginning the journey of transformation to become one, here are three things you should take away from this episode:
1)Transparency and coherence build trust. It comes up over and over again this season. BP saying that they’re pivoting to become a sustainable energy company and then also trying to convince the world that natural gas is a sustainable, renewable energy resource is just ridiculous. As is claiming you are taking on climate change while at the same time remaining a dues-paying member of an industry trade group thats spreading misinformation about climate change. If your words and deeds lack coherence, then anything you say, even if it’s true, will seem ridiculous.
2)Show me the money! It’s all about action. If BP means it, they need to prove it – through action. Today we’ve talked about important actions like cutting support for industry lobbying groups that are climate change deniers or obfuscators, discontinuing any PR or advertising. And potentially seismic actions like actually breaking the company in two to make very clear that there is a Dirty fossil fuel BP of the past and a clean BP of the renewable and sustainable energy future, and letting investors choose which one they want to invest in. Your actions would undoubtedly be different but the point is, doing is believing.
3) Forget about the oil for a minute, there’s gold in this episode for purpose-led entrepreneurs who want to create the BP’s of tomorrow. As Jamie and Duncan both said, big oil has dragged its feet for so long, that BP and the other super-majors may not be save-able. And that’s fine. Sometimes companies just need to go away. But there is an opportunity here to start the BP of tomorrow: a green energy company that isn’t weighed down by legacy investments in fossil fuel. If nothing else, I hope this episode inspires one of you to make that happen.
I’d like to thank everyone who joined us today: Tyson Slocum, Jamie Henn, and Duncan McLaren. You learn more about them in our show notes.
If you have ideas for companies or organizations we should consider for future episodes, you can submit them on our site callingbullshitpodcast.com
And if we performed while transforming you today please let us know by rating and reviewing us on the iHeart Radio app, Apple Podcasts or wherever you get your podcasts.
Thanks to our production team: Hannah Beal, Amanda Ginzburg, Andy Kim, DS Moss, Haley Paskalidies, Mikaela Reid, Parker Silzer, Basil Soper, and Mijon Zulu.
Calling Bullshit was created by co:collective and is hosted by me, Ty Montague. Thanks for listening.
Tagged as: bp.
Rate it
Post comments (0)
Previous episode
Don’t agree with our Bullshit Score?
Give us your take.