BP HAS agreed to a resolution from investors to disclose how its greenhouse gas reduction and future investments plans are in line with the Paris Agreement. However, concerns have been raised separately about BP’s commitment to methane reductions.
BP agreed to support the resolution raised by a group of investors as part of Climate Action 100+. The resolution calls on BP to describe how its strategy, which includes growth in oil and gas as well as pursuing low carbon businesses, is consistent with the Paris Agreement. The resolution also highlights the potential inconsistency between BP’s stated corporate purpose “to power economic growth and lift people out of poverty” and the vulnerability of developing nations to climate change. The resolution will need to be approved at the company’s AGM in May.
BP rejected another resolution by activist shareholder group Follow This, which called for BP to set emissions reductions targets for all its operations, including third-party emissions such as the use of fuel by customers.
Helge Lund, Chairman of BP, said: “BP is committed to helping solve the dual challenge of providing more energy with fewer emissions. This additional reporting will give investors better clarity about how BP can continue to deliver value through the energy transition in a way consistent with the Paris goals. We will be open and transparent about our ambitions and targets as well as our progress against them.”
BP also announced that emissions reduction will be tied to the rewards of its 36,000 employees, including executive directors. Bob Dudley, BP CEO, said: “Meeting the world’s growing demands for energy while also greatly reducing emissions will require more than rapidly growing renewables – all forms of energy must be made cleaner, better and kinder to the planet. This is why our people are already in action across BP, seeking opportunities to reduce our emissions, improve our products and create new low-carbon businesses.”
Bruce Duguid, Head of Stewardship at Hermes EOS and lead co-ordinator of the resolution, said: “Having a strategy and investment consistent with the Paris Goals is critical to securing a sustainable future. This is good news for both investors and the planet. The decision by the BP board to support the resolution shows that this is a priority for the company and builds on progress to date, such as setting best-in-class methane intensity targets.”
BP was also accused of lobbying to weaken US methane emissions rules over the last few years, despite its public stance on reducing emissions, by Unearthed, an investigative journalism division of Greenpeace. It claimed that BP lobbied, both directly and through trade associations, to oppose and then help to reverse rules on methane emissions.
In September 2018, the Trump administration rescinded two Obama-era laws on reducing methane emissions: an Environmental Protection Agency (EPA) rule aimed at reducing pollutants by having more inspections and leak repairs; and a Bureau of Land Management (BLM) rule to reduce venting and flaring on federal lands. According to the EPA’s and BLM’s own analyses, the removal of the Obama-era laws will allow additional emissions of 380,000 t between 2019 and 2025, and waste 299bn ft3 in natural gas.
Unearthed highlighted cases where BP had supposedly directly lobbied against the methane rules. For example in December 2015 (prior to the introduction of the Obama-era rule), Unearthed said that BP’s Head of Regulatory Affairs, Robert Stout Jr, wrote to the EPA to complain that the rule would be “very costly and labour-intensive to implement”. However, the letter went on to explain that the leak detection and repair (LDAR) and optical gas imaging (OGI) programmes that the EPA wanted to implement were not flexible and it called on the EPA to recognise newer technologies. “We believe these technologies not only have the potential to benefit the regulated community, but can offer a more efficient and effective way of pinpointing and fixing leaks to achieve the widely shared goal of mitigating the most significant sources of methane emissions.”
The letter described the development of some new sensor technologies and then said: “It would be unfortunate if deployment of these new strategies were blocked or inhibited by the more prescriptive LDAR requirements in EPA's rule. To avoid this and to create a path toward rapid acceptance of new LDAR strategies, we propose that the rule establish a streamlined, fast-track process for approving new detection technology and monitoring methods that can be easily substituted for the OGI-based survey protocol in EPA's Proposed Rule.”
However, Unearthed also detailed arguments by the American Petroleum Institute (API), of which BP is a member, which clearly lobbied against the EPA methane rule on the grounds that it was “unlawful” and “unnecessary”, which contradicts BP’s individual statements. In an interview with news website ThinkProgress, Lila Holzman, the Energy Program Manager for the non-profit shareholder advocacy group As You Sow, commented on the contrast between the positive climate change statements made by oil and gas companies and the fact that they are also members of the API. “Many of these same companies that are coming out with these strong statements are still members of API. They’re [the oil companies] allowing groups to speak for them that say the opposite”.
Kelly Martin, Director of environmental organisation Sierra Club’s Beyond Dirty Fuels campaign told ThinkProgress: “API has been lobbying extensively against methane protection. These companies are still affiliating with API.”
The Financial Times also reported that energy companies have come under fire for staying silent as the Trump administration rescinded the Obama-era rules.
In response the Unearthed report, a BP spokesperson said: “We have consistently advocated for regulation of methane emissions by one federal agency – the Environmental Protection Agency – rather than an inefficient patchwork of different federal or state agencies. Thus, we suggested that the duplicative methane regulations by the Department of Interior’s Bureau of Land Management should be repealed and the EPA regulations should be kept in place but improved. We believe the EPA regulation should be flexible enough to allow for a range of technologies rather than rigidly bound to current tools that may become obsolete tomorrow.”
Separately, BP also announced that it is collaborating with the Environmental Defense Fund (EDF) on advancing technologies that will reduce methane emissions. The collaboration aims to advance technologies such as drone-based monitoring and stationary continuous monitoring. It will also look at digital solutions such as machine learning and artificial intelligence and work on projects aimed at increasing joint ventures with other oil and gas operators.
Bernard Looney, BP’s upstream Chief Executive, said: “We’ve made great progress driving down emissions across our own business, including meeting our industry-leading methane intensity target of 0.2%, but there is much more work to do and partnering with the committed and capable team at EDF will help us develop and share best practices.”
Fred Krupp, EDF President, said: "EDF and BP don’t agree on everything, but we’re finding common ground on methane. BP has shown early ambition to lead on methane technology. We hope to see more as BP delivers on its own stringent methane goal and we work together to spread solutions industrywide."
Other oil and gas companies have recently come under pressure from investors to improve their emissions targets. While ExxonMobil has set methane reduction targets it has pushed back against calls for more ambitious targets in line with the Paris agreement, accusing investors of attempting to “micro-manage the company”. Shell has detailed steps that the company will take to deliver its commitments on climate change, which include short-term goals and also account for emissions produced from customers using its products. Chevron has promised to adopt emissions targets but has not agreed to extend the targets to emissions released by users of Chevron’s oil and gas.
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