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Haley Zaremba

Haley Zaremba

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

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Premium Content

Beyond Petroleum: The First Supermajor To Turn Its Back On Oil

  • It’s going to take time, investment, infrastructure, and enormous effort to complete the clean energy transition.
  • The world still needs hundreds of billions of barrels of oil.
  • BP’s bold new Chief Executive Bernard Looney is trying to make sure that BP can beat its peers in a race toward clean energy dominance.

While international policymakers and regulatory bodies have already been applying some degree of pressure on the energy industry to decarbonize for years now, the push for cleaning up the global energy sector’s act has been supercharged by the most recent report from the Intergovernmental Panel on Climate Change  (IPCC) and the United Nations (UN). 

The landmark 6th Assessment Report announced in no uncertain terms that we have reached a point of no return for the climate, having irreversibly altered weather patterns and unequivocally warmed the Earth due to human activity. However, there is still a small window of time to mitigate further damage and change the planet’s trajectory toward catastrophic climate change. This will require decarbonization at a massive scale and on an incredibly short timeline. The UN, not mincing words, has called it a “code red for humanity.”

That being said, it’s simply not feasible for the global economy to quit fossil fuels cold turkey. It’s going to take time, investment, infrastructure, and enormous effort to complete the clean energy transition, and in the meantime, the world still needs hundreds of billions of barrels of oil. This dynamic has made it hard to convince oil supermajors to set aside fossil fuels -- their stalwart cash cow -- when there is still so much money to be made before oil goes quietly into that goodnight, especially when brand new mass-scale clean energy enterprises probably won’t turn a profit for years.

Related: Europe Must Act To Avert An Energy Crisis This Winter

Despite the bumps in the road, however, it’s clear which way the tide is turning. Fossil fuels aren’t irrelevant yet, but they have no place in the future if this planet is to have one. Already, some oil execs and fossil fuel industry defectors have decided to abandon ship and are
positioning themselves at the helm of the clean energy revolution, bringing their oilfield know-how and innovative expertise with them. And now, at long last, some oil companies are reading the writing on the wall and deciding to bet big on renewables in order to establish a place at the front of the pack for the new energy era. One of the most notable cases is that of BP, which is changing course and liquidating huge portions of its fossil fuel holdings in a historic shift in strategy. 

BP’s bold new Chief Executive Bernard Looney is trying to make sure that BP can beat its peers in a race toward clean energy dominance. “He aims to slash BP's output by 40%, or about 1 million barrels per day, an amount equal to the UK's entire daily output in 2019,” Reuters recently reported. This makes BP the very first major oil company CEO to announce intentional cuts in future oil production. “At the same time,” the report continued, “BP would boost its capacity to generate electricity from renewable sources to 50 gigawatts, a 20-fold increase and equivalent to the power produced by 50 U.S. nuclear plants.” 

Related: Crude Stocks At Cushing Have Dropped By 42% So Far This Year

This plan will entail the selling off of $25 billion in fossil fuel assets over the next few years, representing about 13% of the company’s total fixed assets. 

While BP is proving to be a trailblazer in the fossil fuel sector’s adaptation to the clean energy revolution, the rest of European Big Oil isn’t too far behind. For the last few years, European supermajors have been pivoting away from total dependence on fossil fuel markets, trying to make the transition from Big Oil to Big Energy. On the other side of the Atlantic, however, it’s a different story. Big Oil in the U.S. has been much slower to accept the inevitable and start to prepare for the coming sea change. 

While the Biden administration has been making a concerted effort to catch up to the rest of the global clean energy industry through the likes of legislation including the historic Infrastructure Bill, it will be hard for companies that have not already started to pivot toward renewables to stay competitive, and could even imperil the energy security of nations that fail to curb their dependence on oil, gas, and coal. 

By Haley Zaremba for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on September 28 2021 said:
    By the time BP finished greenwashing itself, it would have become so emaciated that it will fall prey to a predator, probably an American one.

    And for What? The global economy will still be running on oil and gas throughout the 21st century and probably far beyond.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Daniel Kinsley on September 28 2021 said:
    As foolish as this may sound right now I think it's brilliant. Hidden in the CEO's message should be "get ready to pay double the price for 50% less on petrol products". Let's not overlook that the U.S based companies have also not begun to drill again while the "President" begs OPEC to increase their output. World governments want to regulate energy to the point that it will only be obtainable by the wealthy.
  • George Doolittle on September 28 2021 said:
    "forewarned is forearmed" absolutely
  • Arch Region on September 30 2021 said:
    BP is getting out while there is still time. This is the responsible thing to do. Investing in misinformation like ExxonMobil was caught doing is simply foolish. The science of catastrophic global climate change demands action on the ground, not BS on the Internet.

    Danish Oil Natural Gas got 100% out of fossil fuels four years ago and by now has more than doubled their value as a 100% renewable energy company with a new name Orsted.

    Orsted was like the dove the Argonautes released when faced with a Clashing Rocks of mythology. When the dove made it through, it proved there was no danger and Argonautes followed full speed ahead.

    By the time Beyond Petroleum will turn into a clean renewable giant, they will find some American sucker to unload their remaining emaciated fossil fuel assets before they become totally stranded, valueless goo to be left underground for eternity.

    How do I know? Did you see the price of oil? It is going through the roof accelerating the fossil fuel death spiral to oblivion, so we can all breathe healthier, look better (pollution harms looks), and live longer.

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