Yesterday, BP published its most recent Energy Outlook, in which it highlights the ‘most likely’ path for the global energy landscape.
In the wake of Royal Dutch Shell’s November 2016 announcement that oil demand could peak in five years, investors will scrutinise BP’s views on oil in particular. A November 2016 report assessed the climate risk disclosure and lobbying by the leading oil majors and found in general poor disclosure to investors, including by BP, on how the proliferation of renewable energy and electric vehicles (EV) would impact their two largest markets – fuel for vehicles and gas for power.
The analysis summarized in the table at the end found that companies are making vague disclosures whilst simultaneously aggressively lobbying to prevent policy favouring renewables and EVs. The following information provides an account on BP’s existing predictions for EVs and renewables and its climate change lobbying activities, prior to its Energy Outlook release.
Download this information in PDF format here.
“Following the Paris Agreement, investors want to know how oil and gas companies can survive, and even thrive, in the transition to a low carbon economy. This requires more detailed disclosure of the impact on asset portfolio resilience of low carbon scenarios including disruptive technologies, such as zero emissions vehicles. Investors also expect oil and gas companies to play a supportive role in developing public policy to support the transition.” – Leon Kamhi, Head of Responsibility, Hermes Investment Management
BP’s disclosures on renewables and EV penetration
Electric and hybrid vehicles: BP suggests oil will fuel 90% of all transport and electricity just 1% in 2035, with electric vehicles (EVs) making up only 10% of the total increase in the global car fleet. It expects automobile driven oil demand to, along with global car ownership, roughly double by 2035, with its optimistic scenarios for electric vehicle growth leading to only a 5% fall in demand for oil of current levels. This is despite the fact that the California regulator wants 100% EVs by 2035 and most automakers have ambitious roll out plans, like Honda which plans for 60% EVs and hybrids as soon as 2030.
Renewable energy: BP suggests renewables will generate 16% of global electricity and 9% of global energy in 2035. However, in 2016 BP does not appear to have addressed the potential impacts on its business model deriving from the proliferation of renewable energy in its their investor communications. This contrasts with the International Energy Agency (IEA) which states that by 2040 “In a scenario compatible with 2°C, significantly faster growth means that, in the four largest power markets (China, the United States, the European Union and India), variable renewables become the largest source of generation”. This appears to represent a significant disconnect with BP’s estimations indicating either underestimation of renewables penetration or lack of conviction in a 2C scenario.
BP’s climate change lobbying
BP is notable, along with other European energy majors, for top line support of a “price on carbon” while lobbying against the details of enabling policy like reform of the EU ETS. Evidence also suggests BP has been lobbying against EU renewable energy subsidies in the last few years.
Emissions Trading: BP has a clear position in favour of carbon pricing as the most efficient means to transition to a low carbon economy, which includes supporting the EU ETS. It has however in a 2015 consultation with EU policy makers opposed the creation of a strong carbon price by advocating against key reforms such as the Market Stability Reserve, whilst continuing to stress carbon leakage concerns in an effort to secure free emission permits for industry.
GHG emissions Targets: BP CEO Bob Dudley continues to stress economic and technical issues with reducing greenhouse gas emissions reductions in line with an IPCC demanded response to climate change. The company warned against setting an ambitious EU GHG reduction target, in 2014 emphasizing whether competitors’ are making “comparable” efforts. It also in 2015 reportedly lobbied against the EU Industrial Emissions Directive.
Renewable Energy Policy: BP Chairman Carl-Henric Svanberd in 2015 stated that the company supports continuing renewable energy subsidies. However, BP has opposed European renewable energy targets in various consultations and evidence released in 2015 and 2016 suggests that the company was lobbying against EU renewable subsidies.
BP’s lobbying by its trade associations
BP along with the other oil and gas majors maintains a network of lobbying agents in the form of trade associations, globally. Notable among them are the Western States Petroleum Association which has lobbied against Californian low carbon vehicle standards and the American Petroleum Institute which in the wake Trump’s US victory is pushing hard to dismantle any climate related policy measures at the US federal level.
Western States Petroleum Association (WSPA): BP is a member of WSPA, which has over a number of years campaigned against Low Carbon Fuel Standards (LCFS) for vehicles, and two bills designed to reduce GHG emissions (AB 32 and SB 32) in California. During BP’s 2016 AGM, its CEO Bob Dudley made comments distancing BP from WSPA lobbying positions.
National Association of Manufacturers (NAM): BP executive John Minge is on the Executive Committee of NAM. NAM opposed US leadership on climate change and the US Clean Power Plan, including through a successful legal challenge. In late 2016 NAM advocated to President Trump against the need for regulation to directly limit GHG emissions. BP does not disclose its membership of NAM to investors through CDP despite being transparent about other organisations.
Australian Petroleum Production & Exploration Association (APPEA): An executive of subsidiary of BP is on the board of APPEA. APPEA, which welcomed the removed the Australian carbon tax, also in 2015 opposed the Renewable Energy Target, Energy Efficiency legislation and advocated for significant limits on the scope of the Australian Safeguard Mechanism.
American Petroleum Association (API): BP has an executive on the API, an organisation that has in 2015 been implicated in funding climate change denial research. In 2015 it also opposed renewable energy legislation and the UN Climate Treaty, suggesting it has been driven by “narrow political ideology”. In 2016 API opposed regulations on methane standards and the Clean Power Plan through a legal challenge.
“The uptake of electric vehicles globally will be hugely important for oil majors like BP where fuel for vehicles accounts for up to 40% of revenue. California wants 100% electric vehicles by 2035 with the automakers articulating strong EV and hybrid roll out plans. In its latest annual report BP suggested oil will still fuel 90% of all transport by 2035, an estimate clearly misaligned with the plans of regulators and automakers like Toyota and Honda. Investors should look for updates on this in the 2017 BP Energy Outlook.” – Dylan Tanner, Executive Director, InfluenceMap
Is Wood Burning Sustainable For Your Home?
Wood is a classic heat source, whether we think about people gathered around a campfire or wood stoves in old cabins, but is it a sustainable source of heat in modern society? The answer is an ambivalent one. In certain settings, wood heat is an ideal solution, but for the majority of homes, it isn’t especially suitable. So what’s the tipping point?
Wood heat is ideal for small homes on large properties, for individuals who can gather their own wood, and who have modern wood burning ovens. A green approach to wood heat is one of biofuel on the smallest of scales.
Is Biofuel Green?
One of the reasons that wood heat is a source of so much divide in the eco-friendly community is that it’s a renewable resource and renewable has become synonymous with green. What wood heat isn’t, though, is clean or healthy. It lets off a significant amount of carbon and particulates, and trees certainly don’t grow as quickly as it’s consumed for heat.
Of course, wood is a much less harmful source of heat than coal, but for scientists interested in developing green energy sources, it makes more sense to focus on solar and wind power. Why, then, would they invest in improved wood burning technology?
Solar and wind technology are good large-scale energy solutions, but when it comes to small-space heating, wood has its own advantages. First, wood heat is in keeping with the DIY spirit of homesteaders and tiny house enthusiasts. These individuals are more likely to be driven to gather their own wood and live in small spaces that can be effectively heated as such.
Wood heat is also very effective on an individual scale because it requires very little infrastructure. Modern wood stoves made of steel rather than cast iron are built to EPA specifications, and the only additional necessary tools include a quality axe, somewhere to store the wood, and an appropriate covering to keep it dry. And all the wood can come from your own land.
Wood heat is also ideal for people living off the grid or in cold areas prone to frequent power outages, as it’s constantly reliable. Even if the power goes out, you know that you’ll be able to turn up the heat. That’s important if you live somewhere like Maine where the winters can get exceedingly cold. People have even successfully heated a 40’x34’ home with a single stove.
Benefits Of Biomass
The ultimate question regarding wood heat is whether any energy source that’s dangerous on the large scale is acceptable on a smaller one. For now, the best answer is that with a growing population and limited progress towards “pure” green energy, wood should remain a viable option, specifically because it’s used on a limited scale. Biomass heat is even included in the UK’s Renewable Heat Initiative and minor modifications can make it even more sustainable.
Wood stoves, when embraced in conjunction with pellet stoves, geothermal heating, and masonry heaters, all more efficient forms of sustainable heat, should be part of a modern energy strategy. Ultimately, we’re headed in the direction of diversified energy – all of it cleaner – and wood has a place in the big picture, serving small homes and off-the-grid structures, while solar, wind, and other large-scale initiatives fuel our cities.
7 Benefits You Should Consider Giving Your Energy Employees
As an energy startup, you’re always looking to offer the most competitive packages to entice top-tier talent. This can be tough, especially when trying to put something together that’s both affordable but also has perks that employees are after.
After all, this is an incredibly competitive field and one that’s constantly doing what it can to stay ahead. However, that’s why I’m bringing you a few helpful benefits that could be what bolsters you ahead of your competition. Check them out below:
One benefit commonly overlooked by companies is offering your employees financial advising services, which could help them tremendously in planning for their long-term goals with your firm. This includes anything from budgeting and savings plans to recommendations for credit repair services and investments. Try to take a look at if your energy company could bring on an extra person or two specifically for this role, as it will pay off tremendously regarding retention and employee happiness.
While often included in a lot of health benefits packages, offering your employees life insurance could be an excellent addition to your current perks. Although seldom used, life insurance is a small sign that shows you care about the life of their family beyond just office hours. Additionally, at such a low cost, this is a pretty simple aspect to add to your packages. Try contacting some brokers or insurance agents to see if you can find a policy that’s right for your firm.
Dedicated Time To Enjoy Their Hobbies
Although something seen more often in startups in Silicon Valley, having dedicated office time for employees to enjoy their passions is something that has shown great results. Whether it be learning the piano or taking on building a video game, having your team spend some time on the things they truly enjoy can translate to increased productivity. Why? Because giving them the ability to better themselves, they’ll in turn bring that to their work as well.
The Ability To Work Remotely
It’s no secret that a lot of employers despise the idea of letting their employees work remotely. However, it’s actually proven to hold some amazing benefits. According to Global Workplace Analytics, 95% of employers that allow their employees to telework reported an increased rate of retention, saving on both turnover and sick days. Depending on the needs of each individual role, this can be a strategy to implement either whenever your team wants or on assigned days. Either way, this is one perk almost everyone will love.
Even though it’s mandated for companies with over 50 employees, offering health insurance regardless is arguably a benefit well received across the board. In fact, as noted in research compiled by KFF, 28.6% of employers with less than 50 people still offered health care. Why is that the case? Because it shows you care about their well-being, and know that a healthy employee is one that doesn’t have to worry about astronomical medical bills.
Unlimited Time Off
This is a perk that almost no employer offers but should be regarded as something to consider. According to The Washington Post, only 1-2% of companies offer unlimited vacation, which it’s easy to see why. A true “unlimited vacation” program could be a firm’s worse nightmare, with employees skipping out every other week to enjoy themselves. However, with the right model in place that rewards hard work with days off, your employees will absolutely adore this policy.
A Full Pantry
Finally, having a pantry full of food can be one perk that’s not only relatively inexpensive but also adds to the value of the workplace. As noted by USA Today, when surveying employees who had snacks versus those who didn’t, 67% of those who did reported they were “very happy” with their work life. You’d be surprised at how much of a difference this could make, especially when considering the price point. Consider adding a kitchen to your office if you haven’t already, and always keep the snacks and drinks everyone wants fully stocked. Doing so will increase morale tremendously.
Compiling a great package for your energy company is going to take some time in looking at what you can afford versus what’s the most you can offer. While it might mean cutting back in other areas, having a workforce that feels like you genuinely want to take care of them can take you far. And with so many different benefits to include in your energy company’s package, which one is your favorite? Comment with your answers below!