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BP Publish 2017 Energy Outlook

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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

Energy

7 New Technologies That Could Radically Change Our Energy Consumption

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Energy Consumption
Shutterstock Licensed Photo - By Syda Productions | https://www.shutterstock.com/g/dolgachov

Most of our focus on technological development to lessen our environmental impact has been focused on cleaner, more efficient methods of generating electricity. The cost of solar energy production, for example, is slated to fall more than 75 percent between 2010 and 2020.

This is a massive step forward, and it’s good that engineers and researchers are working for even more advancements in this area. But what about technologies that reduce the amount of energy we demand in the first place?

Though it doesn’t get as much attention in the press, we’re making tremendous progress in this area, too.

New Technologies to Watch

These are some of the top emerging technologies that have the power to reduce our energy demands:

  1. Self-driving cars. Self-driving cars are still in development, but they’re already being hailed as potential ways to eliminate a number of problems on the road, including the epidemic of distracted driving ironically driven by other new technologies. However, even autonomous vehicle proponents often miss the tremendous energy savings that self-driving cars could have on the world. With a fleet of autonomous vehicles at our beck and call, consumers will spend less time driving themselves and more time carpooling, dramatically reducing overall fuel consumption once it’s fully adopted.
  2. Magnetocaloric tech. The magnetocaloric effect isn’t exactly new—it was actually discovered in 1881—but it’s only recently being studied and applied to commercial appliances. Essentially, this technology relies on changing magnetic fields to produce a cooling effect, which could be used in refrigerators and air conditioners to significantly reduce the amount of electricity required.
  3. New types of insulation. Insulation is the best asset we have to keep our homes thermoregulated; they keep cold or warm air in (depending on the season) and keep warm or cold air out (again, depending on the season). New insulation technology has the power to improve this efficiency many times over, decreasing our need for heating and cooling entirely. For example, some new automated sealing technologies can seal gaps between 0.5 inches wide and the width of a human hair.
  4. Better lights. Fluorescent bulbs were a dramatic improvement over incandescent bulbs, and LEDs were a dramatic improvement over fluorescent bulbs—but the improvements may not end there. Scientists are currently researching even better types of light bulbs, and more efficient applications of LEDs while they’re at it.
  5. Better heat pumps. Heat pumps are built to transfer heat from one location to another, and can be used to efficiently manage temperatures—keeping homes warm while requiring less energy expenditure. For example, some heat pumps are built for residential heating and cooling, while others are being used to make more efficient appliances, like dryers.
  6. The internet of things. The internet of things and “smart” devices is another development that can significantly reduce our energy demands. For example, “smart” windows may be able to respond dynamically to changing light conditions to heat or cool the house more efficiently, and “smart” refrigerators may be able to respond dynamically to new conditions. There are several reasons for this improvement. First, smart devices automate things, so it’s easier to control your energy consumption. Second, they track your consumption patterns, so it’s easier to conceptualize your impact. Third, they’re often designed with efficiency in mind from the beginning, reducing energy demands, even without the high-tech interfaces.
  7. Machine learning. Machine learning and artificial intelligence (AI) technologies have the power to improve almost every other item on this list. By studying consumer patterns and recommending new strategies, or automatically controlling certain features, machine learning algorithms have the power to fundamentally change how we use energy in our homes and businesses.

Making the Investment

All technologies need time, money, and consumer acceptance to be developed. Fortunately, a growing number of consumers are becoming enthusiastic about finding new ways to reduce their energy consumption and overall environmental impact. As long as we keep making the investment, our tools to create cleaner energy and demand less energy in the first place should have a massive positive effect on our environment—and even our daily lives.

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Energy

Responsible Energy Investments Could Solve Retirement Funding Crisis

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Energy Investments
Shutterstock / By Sergey Nivens | https://www.shutterstock.com/g/nivens

Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.

Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?

Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.

Tip #1: Focus & Determination

Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.

Tip #2: Minimize Spending

One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!

Tip #3: Visualize Your Goal

You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.

Investing in Clean Energy

One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.

With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.

The Future of Green Biz

As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.

Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.

In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!

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