BP, formerly known as British Petroleum, has made some large changes in the way it handles business and the environment. Host Steve Curwood talks with BP's chief executive Lord John Browne about a future beyond petroleum.
CURWOOD: Five years ago the British oil company BP announced that it would make a 10 percent cut in its greenhouse gas emissions by the year 2010. That's more than nine million tons of carbon dioxide. Just a few days ago, BP's CEO, Lord John Browne announced that his company has met its goal eight years ahead of schedule. He says that despite recent acquisition of oil giants Amoco and Arco, BP was still able to cut emissions from its operations at no net cost to the company.
BROWNE: We did it as I think we suggested. We reduced our carbon dioxide emissions by 70 percent by attending to the efficiency with which we deal with our operations. And we took 30 percent of our reductions out by making sure we didn't let methane escape into the atmosphere. And that we did by very careful attending to the way we operate all over the world.
CURWOOD: Now, you've successfully reduced emissions from your operations. I'm wondering, how can you reduce emissions from the use of your product, which contains carbon?
BROWNE: Well, I think you have to do several things. First, you need to make the right set of products itself. And BP has been increasing the amount of natural gas it produces compared with crude oil over the last few years, and that increase will continue. Natural gas has much less carbon in it than crude oil does, and so if natural gas displaces things like coal, we'll improve the overall carbon intensity of the world. Secondly, we produce fuels for automobiles which allow auto manufacturers to produce more efficient engines. And that in turn helps people to reduce the carbon emissions from using our product.
CURWOOD: Tell me a bit about your own internal emissions trading program there at BP. How does that work, and what impact does it have that the U.S. has pulled out of the Kyoto process?
BROWNE: Well, they're two separate things. The internal trading mechanisms were put in place in order for us to learn. To learn about where was the most effective place to invest to reduce carbon dioxide emissions. And by trading permits around a camp, this allowed each one of the carbon dioxide sources to be valued - to put a value on them and clearly gave us a rank order of things to do. It's very much an internal system, but we've learned a lot about how one would run such a system. The other issue is the United States doesn't agree with the Kyoto Treaty and that's very much the right of the United States. It seems to us the Kyoto Treaty is about the only thing that the world has at the moment, but I do believe it's a step on the road only for what inevitably complex set of negotiations to bring together international agreement on greenhouse gases and global warming. After all, a simpler problem of world trade took some 50 years from origination to the formation of the WTO. This, I think, is no less complicated.
CURWOOD: Let's talk for a moment about your plans in Alaska. In the U.S., the House of Representatives has already approved drilling in the Arctic National Wildlife Refuge. If ANWR drilling were to pass in the Senate, how viable a business interest would it be for BP to drill for oil in Alaska?
BROWNE: Well, I think we'd have to look at it at the time ANWR were opened. If it were opened, BP would have to look at the environmental risks that exist at that time, the cultural and social risks, for there are some, and the economic risks. And we'd have to look at that and compare all those and their likely outcome against other things we can do all over the world, before we decided to go into the Arctic Wildlife Refuge. I would say that it's probably viable to drill for oil in the Arctic Refuge because it's been viable to drill for oil on the rest of the North Slope of Alaska. But we would have to assess the situation in the light of all the factors if ANWR were opened.
CURWOOD: There's a lot of natural gas which can come out of that area of Alaska. Which would be a higher priority, finding a way to get that gas out or drill for oil?
BROWNE: Well, I think it's a bit of a theoretical choice at the moment, because ANWR is not open. But clearly, the natural gas already exists in Prudhoe Bay Field, which is developed and in adjacent accumulations very close to Prudhoe Bay. There's a lot of gas there. But it presently is economic to develop this gas and send it to market. It's simply too expensive. That doesn't mean to say it will always be uneconomic. We have to do some more engineering and we have to think through how fast this gas can be fed into a market which is likely to need it in ten years' time or so. But right now it's uneconomic.
CURWOOD: Tell me, what are your goals in terms of renewable energy?
BROWNE: Renewable energy, we are very focused in one particular area, which is photovoltaics. We've been in the business for a long time, and it's growing at about 30 percent per annum, but from a very small base. And this is now becoming a business which eventually will grow to a reasonable size. It will, of course, not compete in size to oil and gas, neither will it, I believe, globally do that when you consider alternative energies against the whole of hydrocarbons. But it's an important strand in a tapestry of choices people have for how to get energy.
CURWOOD: In regard to solar energy, how much profit are you seeing from that sector so far for your company?
BROWNE: Right now we're seeing no net profit from the sector. All the money we make is plowed back into research and development. So it actually is running at a slightly small loss.
CURWOOD: Who of your competitors is moving in the same direction as BP?
BROWNE: I never talk about our competitors. What I would say is this, is that the industry, compared with five years ago, when we took a step to say global warming is an issue, we need to think about it, the industry is in a very different position. And I think many people are talking about global warming in the industry and doing something about it. Not everyone's doing the same thing, but I believe the industry is in a very different position today than it was five years ago.
CURWOOD: One last question. What about your name: British Petroleum?
BROWNE: No, the name is BP. It used to be British Petroleum, but it used to be ARCO, it used to be Amoco, it used to be Burmah Castrol, and we have to pick a name that incorporates all the heritages, but looks to the future. So BP is the name, and I hope it conjures in everyone's mind a sense of what we stand for, which is performance, our belief in the environment, and a sense of the future.
CURWOOD: John Browne is the Chief Executive of BP. Thanks for taking this time with us today.
BROWNE: It's a great pleasure.
[MUSIC: Enigma & Deep Forest, "New Dawn"]
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