The environmental fashion parade suddenly has a smell?

This is a big shift:  Twenty years ago BP called itself “Beyond Petroleum”, and only one year ago the CEO said BP was “accelerating” its green investments. But now the CEO is reassuring investors that BP is not going to be distracted by environmental goals, and are going to maximize profits. Furthermore those profits would be found where it has a competitive advantage, which is in it’s “legacy oil and gas operations”.

Just like that: it’s OK to talk about profits and energy security. Key words here are “dialing back”, “disappointed”, “narrower” and “less emphasis” and they are all used in relation to environmental investments.

h/t Paul Homewood at Notalotofpeopleknowthat

Bernard Looney seeks to sharpen strategic focus, with less emphasis on environmental goals

Jenny Strasberg, Wall Street Journal

Chief Executive Bernard Looney plans to dial back elements of the oil giant’s high-profile push into renewable energy, according to people familiar with recent discussions.

Mr. Looney has said he is disappointed in the returns from some of the oil giant’s renewable investments and plans to pursue a narrower green-energy strategy, the people said. He has told some people close to the company that BP needs to do more to convince shareholders of its strategy to maximize profits in areas where it has a competitive advantage, including its legacy oil-and-gas operations.

In some of the conversations, Mr. Looney has said he plans to place less emphasis on so-called ESG goals—a catchall term for environmental, social and governance—to help clarify that those aren’t distracting the company from its ability to deliver profits, the people said.

One BP investor said shareholders were carefully watching the performance of renewable investments.

They said: “Societally, people are now more focused on the question of energy security – we’ve got to be mindful that as we run up the new system of renewables, you can’t run down the old system too aggressively; it’s a transition, it’s not a step change.”

This appears to be a company wide shift. Only three days ago the chief economist at BP said that we’d need oil and gas for decades yet. Was this the test run to see what kind of pushback a pro-oil message would get?

By Rachel Millard, The Telegraph

Fossil fuels only way to combat energy shortages, oil giant claims

Investment in oil and gas production will be needed for the next three decades if the world is to avoid more shortages and price swings, BP has warned. The oil giant said in its annual energy outlook published on Monday that fossil fuels are still likely to account for about 20pc of primary energy in 2050 even under a significant tightening of climate policies.

“This would be the first time in modern history that there has been a sustained fall in the demand for any fossil fuel.”

Media spin runs as strong as ever

The New York Times and Reuters readers are seeing headlines like this generated from the same BP report:

The head of the world’s leading energy organization called the war in Ukraine an “accelerator” of the transition.

“The increased focus on energy security as a result of the Russia-Ukraine war has the potential to accelerate the energy transition as countries seek to increase access to domestically produced energy, much of which is likely to come from renewables and other non-fossil fuels,” BP Chief Economist Spencer Dale said in the report.

It’s like we live in two different worlds. Some investors are in for a nasty surprise.

In 2011–2015, BP cut down its alternative energy business. The company announced its departure from the solar energy market in December 2011 by closing its solar power business, BP Solar.^[136] In 2012, BP shut down the BP Biofuels Highlands project which was developed since 2008 to make cellulosic ethanol from emerging energy crops like switchgrass and from biomass.^[137][138] In 2015, BP decided to exit from other lignocellulosic ethanol businesses.^[139] It sold its stake in Vivergo to Associated British Foods.^[140] BP and DuPont also mothballed their joint biobutanol pilot plant in Saltend.^[141]

We can be pretty sure that if there were easy profits to be made in solar or biofuels, BP wouldn’t have axed them.

BP Energy Outlook 2023  |  Photo by Keith Edkins |