BP Commits To Slashing Its Oil and Gas Operations, A Necessary Step for Climate Action

(Our Daily Planet) As Greentech Media reported, oil and gas giant BP announced yesterday that it will cut its oil and gas output by 40% by 2030 and increase its low-carbon investment tenfold by then as it begins to detail its 2050 net-zero strategy.

This announcement comes after BP head of strategy Giulia Chierchia told investors on a call that BP expects demand for fossil fuels to fall by 75% over the next 30 years if the increase in global temperatures is limited to 1.5 degrees celsius, or by 50% if warming is less than 2 degrees. However, as CNN wrote, the bulk of its annual capital expenditure over the next five years will still be in oil and gas.

Why This Matters: BP is the first of the oil majors to set a 40% emissions reduction target date by 2030, especially with a tangible plan of how they’ll achieve this. After the Deepwater Horizon oil spill in 2010, BP (despite its moniker of “Beyond Petroleum”) had one of the worst corporate reputations in the world. This is a notable step and markets have reacted in accordance. As Andrew Grant wrote for Carbon Tracker:

It says it will not launch new oil and gas exploration efforts in countries where it does not already have a presence, although it is not ruling out new wells in countries where it already operates. READ MORE

Excerpt from CNN: BP's plan to pivot away from oil after a century of exploration will involve major investments into bioenergy, hydrogen and carbon capture and storage. It is also targeting 70,000 electric vehicle charging points, up from 7,500 at present. At the same time, BP will reduce its oil and gas refining portfolio and aims to raise $25 billion by selling assets over the next five years. READ MORE

Excerpt from GreenTechMedia: Bioenergy production will be increased fourfold to 100,000 barrels per day, and BP wants a 10 percent market share in the hydrogen economy in each country where it will be active. BP’s hydrogen strategy will include both green and blue varieties, with heavy transport a focus in the U.S. and exports in Australia.

Giulia Chierchia, BP's executive vice president for strategy and sustainability, said green hydrogen is a potential route to establishing an “e-fuels” market.

BP has been upfront about the ongoing role of fossil fuels in its long-term plans. To reach net-zero, it will use carbon-capture technology and natural climate sinks such as forests to offset the emissions it can’t eliminate. The company has moved further on its net-zero planning than any of its competitors, but critics continue to look for a faster shift away from fossil fuels. READ MORE

Excerpt from Forbes: Of the low carbon businesses that BP can enter, the company is already securing and supplying agricultural and bio feedstocks to renewable fuels producers. BP itself has added renewable diesel production to its Cherry Point Refinery in Blaine, Washington. The renewable fuels processed from agricultural feedstocks are closest to BP’s legacy business and benefit from an established network of fueling stations for distribution to consumers. BP may consider integrating upstream and buying the farms and slaughterhouses to secure feedstock; otherwise it will not be an integrated producer of ethanol or renewable diesel.

Hydrogen produced from natural gas still produces carbon, but hydrogen produced by electrolysis using wind or solar power is carbon-free, hence its moniker “green hydrogen.” While the technology for producing hydrogen is not new, the infrastructure necessary to distribute hydrogen either for use in fuel cells or as a substitute for natural gas is still in its infancy. Hydrogen cannot just be dropped into world energy markets as a direct substitute for natural gas. READ MORE