Subject: Viridian Note 00119: BP Amoco's Glasnost
Key concepts: big oil, perestroika, Sir John Browne,
Attention Conservation Notice: It's an ambitious and highly capable energy-industry CEO engaged in climate PR spin.
Link: January 2000 WIRED. "The Future Gets Fun Again,"
Link: NEWSWEEK January 1, 2000, page 68. "Learning to
Source: Newsweek, December 1999.
(((It has been remarked that BP Amoco's policies "sound like Greenpeace had invaded the executive suite." In point of fact, Greenpeace has invaded BP Amoco's executive suite. In response, BP Amoco, in the person of its Gorbachevian leader Sir John Browne, has launched a vigorous "charm offensive.")))
"None of Us Lives in a Vacuum"
by John Browne, Chief Executive Officer of BP Amoco.
"The oil and gas industry is in the middle of a revolution, one taking place on five or six different fronts. After 70 years with an almost unchanged corporate structure among the major oil companies, the industry has, in the last two years, seen four major transformations in the United States and Europe, and a host of smaller linkups. (...)
"These mergers and acquisitions don't constitute an endgame; the industry is not shrinking. Demand for oil is 12 percent higher than it was a decade ago. Gas demand is 30 percent higher. And with nuclear developments again in question it seems certain that hydrocarbons will meet the bulk of the world's new energy demand for the forseeable future. The geography of the industry is changing, too. Incremental demand for energy comes predominantly from Asia, driven by population growth and rising living standards.
"We are seeing a new balance of fuels take shape. The demand for natural gas has doubled since the early 1970s and is set to double again by 2020, partly because gas is more environmentally friendly == for equivalent electricity output, gas generates less than half the emissions produced by coal.
"As part of China's celebrations of the 50th anniversary of the revolution, the Chinese adjusted the use of some of the coal-fired industrial plants around Beijing. In a city that is often covered by a blanket of smog, people could see what they were celebrating.
"That story is just one example of a new set of expectations. People want energy, because energy means liberty, mobility, growth and the chance to improve living standards. But people want a clean environment, too. Yet at the moment consumers and government seem to be in denial. They refuse to accept their own responsibility for increasing costs to the quality of life which are imposed when we all demand more. And they deflect that responsibility onto the oil and gas sector."
(((I'm in extensive agreement with the "denial" part, but the oil and gas sector is held responsible by consumers and government because the industry owns and maintains the means of production. We consumers are pulling the nozzles and flipping the switches, but we're extensively and deliberately divorced from the day-to-day realities of running derricks and supertankers. If we all had desktop oil refineries, then the energy industry would have a very different structure of responsibility.)))
"There are no simple and easy answers to global warming, traffic congestion, air quality and waste disposal. Oil companies can't solve these problems on their own. But we can make a contribution as part of a common effort. We all need to take measures that transcend the apparent == and unacceptable == trade-off between better living standards and pollution.
"Take climate change. I disagree with those in our industry who believe that the only answer to climate change is to question the science, deny responsibility and ignore reality. (((Viva! VIVA! VIVA!))) Of course, the science is provisional; there are many things we do not know. But it is an undeniable truth that people link energy to pollution, that they fear for the environmental future and that they believe companies should raise their aspirations. We did some polling; when asked whether they associate energy with progress or pollution, almost 40 percent of respondents say the first association is with pollution. But 80 percent believe that business has the ability and the responsibility to find answers."
(((Well, it's the truth as far as it goes, and it's good of him to 'fess up to it. I would have liked to hear a little more about the climatic reality, and a little less about the polling. It's not a problem of aspiration, it's a problem of respiration. Thirty percent more CO2 in the atmosphere can't be wished away with better corporate public relations. Energy will mean "liberty, mobility, growth" as well as "progress" only when energy no longer pollutes.)))
"We can't afford to disappoint them. That's why, in a speech at Yale last year, I committed BP to reducing our own emissions of greenhouse gases by at least 10 percent from a 1990 base by the year 2010. Because our business is growing rapidly, that is a reduction of more than 40 percent from the level we would have reached if we took no action at all. And it's why we've pledged this year to introduce new clean fuels in at least 40 cities around the world by the end of the year 2000."
(((This seems to me like a profoundly effective public-relations move. It works because we are all thoroughly implicated in carbon abuse. A small scrim of dissidents exist, but the masses as a whole are mortgaged to combustion in the way that Soviets were to mass factories and collective farms. So: have you reduced your own emission of greenhouse gases "by 10 percent from a 1990 base"? You haven't done that? Then by what conceivable right can you criticize those noble souls at BP Amoco? You should sit down and shut up!)))
"But our decisions on global warming and clean fuels also taught us a larger truth. We learned that for a company like ours == indeed, for any international company with a large number of highly skilled employees == top management can no longer expect to make policy in a vacuum. When we accepted that, on the evidence, global warming was a true problem, we did so in part because our own employees had told us that we couldn't go on living in denial. Their families, and their children in particular, believed we were part of that problem.
"Our staff found it intolerable that we seemed to be on the wrong side of a fundamental issue. I have never received so many personal e-mails from BP Amoco employees as I did after announcing our new policy. A few weeks later we asked all our teams for their direct support, so that we could identify ways of reducing our own emissions. I got hundreds of pages of e-mail from people all around the world with detailed practical suggestions."
(((Hurray, hurray, not just for the BP-Amoco children == tomorrow's little consumers == but for the engineers who dare to have a conscience and some foresight.
(((There must be Viridian readers out there who cynically believe that oil company personnel (hundreds of thousands of technically educated people all over the planet) are terminally afflicted with false- consciousness. They somehow want to see their own children stew in a Greenhouse world. Nobody's eager to reform themselves out of a job, admittedly. But it's other wrong and evil to deny other human beings any capacity for intelligence and reform. What Browne says about his industry's 70-year stagnation is true. And the revolution he describes is a real one. The fate of the giant oil and gas enterprise is up for grabs to an extent unseen in many decades.
(((When Maid Marian showed up in Sherwood Forest, cynics would have hanged her for being an aristocrat. If we want energy perestroika instead of a Greenhouse Terror, we have to wisely exploit the growing disorder inside the castle. Sir John says he wants to reform; he's taking concrete steps to reform; he's deliberately and publicly cut himself out of the Greenhouse-denial pack; so he deserves a hearing and should be taken at face value. Certainly the Greenhouse-denial industry is in no doubt about his intentions: they hate, fear and vilify John Browne for daring to break ranks.)))
"The old order, symbolized by the remote and arrogant corporation, convinced of its own virtue and invincibility, is passing. The new order is neither comfortable nor predictable; but it reminds us that companies, however big, are simply servants of society. We exist only because somebody wants to buy what we provide. In a complex world, the companies that thrive will be those that can combine the traditional strengths, like a strong financial balance sheet and a great portfolio of assets, with something new: the capacity to listen and to learn."
(((Hear hear. God bless us every one. Merry Xmas.)))
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