BP said recently it plans to cut oil and gas production by 40% by 2030, fleshing out some details of a promise earlier this year for net-zero emissions by 2050.
Experts and environmentalists remain skeptical or cautiously optimistic.
The energy giant said it expects refining output to drop by 30%, which it said would cut both refinery emissions and car emissions from its gasoline. Several components include:
Low carbon energy – increase funding by 10-times to $5 billion per year by 2030
Scale up to 50 gigawatts of renewable energy, up from 2.5GW currently
Increase electric car charging stations to 70,000 from 7,500
Boost funding into biofuels and hydrogen and carbon capture/storage to help pull carbon dioxide from smokestacks or in the air
It said direct emissions, like from refineries, should drop by around one-third by 2030, while carbon-intensity of products, like gasoline, would drop by over 15%. A BP spokesman was not immediately available.
“The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero,” new CEO Bernard Looney said in February. “We all want energy that is reliable and affordable, but that is no longer enough. It must also be cleaner.”
Even so, BP would face massive barriers to shift away from its core business, experts say.
“It’s a little bit like Ford going from (combustion engines) to (electric vehicles),” said Indiana University University SPEA professor John Rupp, a former Exxon geologist.
The Whiting refinery, one of the largest in North America, would likely remain unaffected, he said. It’s “efficient”, plus BP poured billions of dollars into the facility in the mid-2000s before it ramped up refining heavy Canadian crude oil.
Oil and gas is a market that will remain lucrative over the next few decades, Rupp said. The transition to renewables is expensive. Low-carbon sources are less convenient and more expensive. They could be forced to pass on those costs to customers, he said.
BP cut its stock dividend as it’s seen profits plunge during the COVID-19 pandemic as demand for oil and gas fell. The company said it lost $16.8 billion in 2020’s second quarter, compared to a $1.8 billion profit the prior year. BP said it would cut 10,000 jobs, including layoffs expected in Whiting, its largest refinery worldwide.
This spring, Royal Dutch Shell became the second oil company, with major U.S. holdings, after BP to announce it also planned to get to net-zero emissions within 30 years. With pressure on climate change, other European oil companies have made similar pledges.
“It’s a bold move, but they are looking at the writing on the wall,” Rupp said of BP.
Indeed, shifting to renewable energy, BP would need billions of dollars to make that pledge over several years, energy analysts told Reuters.
Rather than improve emissions at a large, century-old facility like the Whiting refinery, it’s more likely BP will look to “offset” what it pumps into the air via clean energy infrastructure elsewhere.
The most direct way would be to buy up off-shore wind farms, some analysts said. Last month, BP announced it bought out a full stake in Fowler Ridge I on Interstate-65, near Lafayette, upping its U.S. wind farm generating capacity by 15%, or 300 megawatts.
“We certainly think it’s a step in the right direction,” said Bowden Quinn, director of the Sierra Club’s Hoosier Chapter. “Considering the real impacts of global warming on our climate, we would like to see more done. 2030 is an adequate goal, but we need to move much quicker.”
The Hoosier Sierra Club sued BP last September over the Whiting refinery’s air quality violations.
The Associated Press contributed.
