BP is probably the first oil major that has made concrete plans for the end of oil—or at least the shrinking of its role.
The company announced a big strategic pivot last month that would see it turn from an “integrated oil company” to an “integrated energy company”.
The labelling is mercifully less flamboyant than its previous attempts to look green.
Whenever I tweet about BP, my mentions are inevitably full of references to “Beyond Petroleum,” the corporate slogan developed and endlessly advertised under Lord John Browne, three chief executive officers and two decades ago.
Cynicism is warranted; its foray into what was then known as “alternative energy” was later mostly sold off or closed by new management.
This time might be different.
BP plans to cut its oil and gas output by about 40% over the next decade and increase its renewable energy generation capacity twentyfold.
It’s also given up on luring investors with the high dividends of the past.
There are niggles, of course.
The cuts to its oil and gas extraction exclude anything produced from BP’s stake in Russian oil and gas company Rosneft, which equates to about 30% of its current emissions.
Even in spite of all that, BP’s commitment stands apart from other oil companies’.
The response from environmental groups was probably the warmest that an oil company has had for a long time.
The commercial part of BP's rationale was underlined earlier this week with the publication of the company’s latest annual “outlook,” which projects long-term scenarios for how the energy landscape will change.
Even in BP’s worst case for the climate—i.e. the best case for oil—demand for the polluting fuel will stop growing within a few years, much sooner than most energy forecasters expect.
The International Energy Agency still sees growth until at least 2030 in its central scenario.
That date matters—it determines when those who are still holding onto oil assets will start having a hell of a time unloading them.
Selling off oil and gas fields is likely one way BP will cut its output in the coming decade.
Other cuts will come from the natural depleting of its reserves.
If oil producers achieve their emissions reductions targets by shifting the burden onto someone else’s balance sheet, the planet heats up regardless.