BP Worries a Green Coronavirus Recovery Could Kill Its Business

Bye, Felicia.
Bye, Felicia.
Photo: Getty

Oil giants are coming to terms with their impending doom. That’s especially true these days for BP, the London-based multinational fossil fuel corporation most notorious for causing the Deepwater Horizon oil spill in 2010. The company announced Monday it’s writing down up to $17.5 billion on its assets in the second quarter due to the coronavirus pandemic and its long-term projected impact on global oil prices.

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BP is trying to save its ass by laying off 10,000 workers. Even after that move, the company is still preparing to be worth a lot less. That’s because it expects oil prices to stay low in decades to come. Why? Well, let’s allow BP to explain.

“bp’s management also has a growing expectation that the aftermath of the pandemic will accelerate the pace of transition to a lower-carbon economy and energy system, as countries seek to ‘build back better’ so that their economies will be more resilient in the future,” the company (which yes, is trying to make “bp” happen) wrote in a statement.

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They ain’t lying. The European Union is prioritizing a green economic recovery. That’s not necessarily the case just yet for places like China or the U.S., but a dirty recovery could prove disastrous for climate efforts. That’s why experts and even the United Nations are calling on governments to seize this opportunity to transition toward low-carbon economies.

The pandemic rocked the oil industry that was already seeing declining profits. We’ve seen oil prices hit an all-time low, companies struggle to find storage space for their unsold oil, and public demand diminish. Many people are still staying home, and few are hopping on a plane anytime soon. With no need to fuel cars or planes, oil companies’ profits are taking a hit. BP is just the latest oil major to acknowledge the transformation taking place.

BP’s CEO Bernard Looney said the recent decisions “will better enable us to compete through the energy transition,” but the company is definitely is going about it in all the wrong ways so far. Laying off thousands of workers breaks all the rules around a just transition, which should prioritize worker protections so that the working-class doesn’t bear the economic burden of abandoned oil and gas. Sure, the multi-billion dollar company offered workers a severance package that included a laptop and help job-seeking, but that’s not enough. These workers deserve to play a key role in the budding green industries that’ll transform our world, such as jobs in energy efficiency or clean energy.

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A system that supports fossil fuel workers doesn’t yet exist, but the responsibility lands on world governments and companies like BP working together to protect them and, ultimately, the economy. After all, hundreds of thousands thrown into unemployment doesn’t exactly improve the economic situation.

What’s more, the company hasn’t given a clear sign that it’ll actually reduce oil and gas exploration and drilling despite its ambition to achieve net-zero emissions. That would seem to be the most obvious step toward reaching its goal. BP has a history of greenwashing and is currently be sued for false advertising around its climate claims, so excuse me for not taking it seriously. But hey, at least the economy is finally catching up with the planet’s best interests.

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Yessenia Funes is climate editor at Atmos Magazine. She loves Earther forever.

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DISCUSSION

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Here in the US, the world’s biggest oil production and refining country in 2019, BP is not that much of a player. A player, yes, but not The Player. For example, BP doesn’t even make the top 10 on the production side. Production is pretty much divided up between some international oil & gas companies (e.g. Exxon and Chevron) and a lot of independents. A good place to start with independent oil and gas companies is the Independent Petroleum Association of America (IPAA) website.

On the refining end, BP is ranked 8th at around 750,000 barrels per day (total refinery nameplate capacity basis). Compare that to the biggest refiner in the US, Marathon Oil, at over 3 million barrels per day. Those numbers are for 2019 and from wikipedia so take with a grain of salt mole of gasoline range hydrocarbons.

Anyway, I guess the point is that just because one major (an international integrated oil & gas concern like BP) is deep in reflection doesn’t mean the entire industry is asking itself, what does it all mean? So a background on the industry from wells to wheels might help democrats fine tune an energy jobs transition platform going into the November 2020 election. Or not.