BP’s new chief government stated the influence of the coronavirus pandemic has deepened his dedication to shrinking the oil large’s carbon footprint to zero.
Bernard Looney, who took the helm of the oil agency in February, stated he was “extra satisfied than ever” that BP should embrace the vitality transition following the collapse of worldwide oil markets.
He informed the Guardian that his dedication to steering BP in direction of its net-zero carbon ambitions, set out earlier this yr, is “deeper” because of the influence of the Covid-19 outbreak.
“I’m extra satisfied than ever that that is the proper factor to do, and we have to crack on with it,” he stated. “The pandemic solely provides to the problem that already exists for oil within the medium to long run.”
Some vitality economists consider demand for oil might by no means recuperate to its ranges earlier than the pandemic if modifications to enterprise journey and commuting stay after the lockdown ends. This raises critical questions over the enterprise fashions of main oil corporations, that are already beneath strain on account of harder local weather motion and the rise of renewable vitality.
“We’re all residing and dealing otherwise proper now. Not all of that can stick, however a few of it’ll stick for certain. The query I’ve is whether or not customers will devour much less, and I believe there’s a chance that they are going to,” Looney stated.
The world’s oil demand has fallen to 25-year lows following the outbreak of Covid-19, which has severely restricted demand for transport fuels, inflicting international oil costs to fall by two-thirds. The oil market disaster has wiped billions from main oil corporations, together with BP which reported a loss for the primary quarter of this yr.
“I believe this can remind individuals of the fragility of the ecosystem that we work in; individuals are wanting up on the skies and seeing much less air pollution, and I do hope that there can be a fair larger appreciation for nature as we transfer ahead, which ought to hold the local weather on the forefront of public debate,” he added.
Looney started his tenure as BP boss by promising that the oil firm would make investments extra in clear vitality and fewer in fossil fuels over the subsequent three many years as a part of an ambition to grow to be a carbon impartial enterprise by 2050. The plan will use carbon offsets, corresponding to tree-planting and emissions seize know-how, to mitigate the fossil fuels it’ll proceed to supply by the center of the century.
“Do the near-term points trigger us to have the ability to make investments rather less than I’d have appreciated in these subsequent couple of years? Presumably,” he stated. “However I do consider that we’ll stay true to what we stated on 12 February; that over time, we are going to make investments extra into non-carbon companies and fewer into hydrocarbon companies.”
The strain going through oil producers has elevated as traders start to show their backs on fossil fuels in favour of inexperienced vitality, which is cheaper and affords extra predictable returns.
This yr, US oil costs plunged beneath zero for the primary time, whereas BP’s photo voltaic vitality enterprise, Lightsource, struck new US solar energy contracts totaling 400MW, Looney stated, which underlines the resilience of the enterprise.
“This can be a sector which continues to draw funding and I believe that’s as a result of it’s what society needs,” Looney stated. “These are the the reason why my dedication [to net zero] stays as deep, if not deeper than it has been.”