SocialismToday           Socialist Party magazine

Issue 190 July/August 2015

BP dumps green tech

Throughout the 1980s and into the 1990s, British Petroleum, Europe’s second-largest energy company, engaged in significant research into renewable energy. It had been spending around $450 million a year ($830 million in today’s money) looking into energy efficiency and alternatives to fossil fuels, with 4,400 scientists and staff working on the projects in Britain and the US. The company was breaking new ground in photovoltaic solar panels, wave power and domestic energy efficiency, and into a deeper understanding of how greenhouse gas emissions could be reduced. The work was systematically scaled back from the early 1990s.

Scandalously, the archive of that R&D, which could hold invaluable information into how to tackle global warming, is under lock and key at Warwick University. BP employs its own librarians at the site and only pre-1976 material has been made publicly available. A spokesman at BP headquarters dismissed concerns: "The National Records Office has a 30-year rule. We just have a longer one". (The Guardian, 24 April)

Greenpeace demanded that BP should open up access to its archive. "By keeping this wealth of research under lock and key BP is putting narrow corporate interests before humanity’s hopes to tackle one of its greatest challenges". That is, of course, how the capitalist system operates. In the pursuit of profit, the short-term interests of companies – backed up by the political establishment in the countries in which they are based – mean that huge amounts of human and natural resources are wasted in competitive duplication of R&D and production, as well as in advertising and packaging, etc.

It adds another level of urgency to the demand to open the books, this time to include research archives. It is not only a question of seeing where the profits are going – to demand accountability, and in order to implement workers’ control and management – but also of sharing vital information which could help deal with this man-made threat to life on earth.

In 2003, BP launched a $200 million rebranding campaign, claiming it was moving ‘Beyond Petroleum’. Its 70-year-old shield logo was replaced by a softer green and yellow sunburst. That process was mirrored at Chevron Corp, which declared: "It’s time oil companies get behind the development of renewable energy". However, that was already ten years on from cut-backs at BP which saw the end of R&D as a separate department. It was merged with the engineering arm, its focus redirected to oil and chemical research. Practically all of BP’s $20 billion investment this year will be geared towards fossil fuel extraction.

Three of the major oil companies – BP, Chevron and Royal Dutch Shell – undertook significant investment in solar power in the early 2000s. These companies have effectively deserted the field. BP claimed to have the world’s most efficient thin-film solar panels. In 2001 it said it would put solar panels on all new BP service stations. In 2009, it aimed to put them on the roofs of Wal-Mart stores in California. The same year, it slashed the budget of BP Alternative Energy. In 2011, BP Solar was shut down on the grounds that it was not making money. (Environment & Energy Publishing, 3 October 2014)

As recently as January 2014, Chevron announced plans to build a number of geothermal plants in Europe. Then it sold them off, along with units working on solar installations and energy efficiency, cancelling two large solar farms in Hawaii. Today, the corporation retains a few solar photovoltaic projects in California and a small wind farm in Wyoming.

There has, in fact, been a marked shift back to oil and gas exploration and extraction. This was fuelled by the rising price of oil – though now reversed – which led to the boom in tar-sands and shale, driven by the US and Canada. It is also due to cuts in government subsidies. The energy companies, it seems, were willing to provide seed money for renewable energy sources when backed up by taxpayers’ cash. When the leap to large-scale production was required, however, they turned their backs.

The major oil and energy companies have, in effect, reverted to type. In North America, in particular, there has been an aggressive drive to invest heavily in more fossil fuel exploitation, above all, the ‘unconventionals’ – tar sands in Alberta, natural gas in the Marcellus shale, deep-water oil in the Gulf of Mexico, the Arctic, and tight oil reserves in Texas and North Dakota. They require expensive new techniques, and so the companies have moved away from sustainable technology and toward innovations in drilling, subterranean mapping and hydraulic fracturing (fracking).

In an ironic twist, today’s research into clean energy is often skewed towards making fossil fuel extraction more efficient. Mirrors are being used to focus solar energy to superheat fluid and create steam, which is forced into the ground to improve the productivity of oil wells. In other words, a technology which could help reverse global warming through the reduction of greenhouse gas emissions is being used to extract (and then burn) ever greater amounts of fossil fuels. And so, the profit-driven capitalist system reveals its utter bankruptcy and parasitic nature.

In their scramble to make money from environmental catastrophe, these companies find very willing partners in government. After the Tories and Liberal Democrats formed their coalition in May 2010, Shell was the first company to meet with Chris Huhne, then secretary of state for climate change and energy. In July and October 2011, Shell met with ministers at least eight times. That was when the company’s responsibility for oil spills in Nigeria, and its interests in Iraq and Libya, were headline news.

In January 2011, the night before a deal was signed between BP and Rosneft, majority owned by the Russian state, BP’s managing director Iain Conn phoned Huhne, asking him to attend. Hunhe dutifully did so. The chief executive of Rosneft, Igor Sechin – then Russian deputy prime minister and Vladimir Putin’s right-hand man – was also there to seal the deal, worth £10 billion.

Conn and other BP executives had met with Huhne a couple of days earlier to discuss the company’s $20 billion (£13bn) exposure to the Deepwater Horizon oil spill disaster in the Gulf of Mexico. BP was assured that Huhne’s department, alongside the Treasury, Foreign and Commonwealth Office (FCO) and business department, would help to find an ‘operational solution’ to allow BP to reopen the North Sea gas field it owned jointly with Iran, despite the sanctions against that country. Eventually, Iran’s share of the profits would be held by the British government in a frozen account, allowing BP to keep its operation going. The FCO even holds an annual ‘BP high level dinner’, "to strengthen the strategic relationship between BP and the FCO on global economic and energy issues". (The Guardian, 20 May 2015)

At the time of last year’s dinner, Russia had recently annexed Crimea. BP could have found itself exposed to any sanctions, especially as it had a 20% shareholding in Rosneft. Earlier, in the week before the annexation of Crimea, the British ambassador in Washington had held a dinner "at BP’s suggestion for the visit of BP’s chief executive of downstream operations". Representatives of the US State Department and big business attended. In Moscow, the British ambassador met BP’s Russia Energy president to discuss BP’s exposure. In short, the British government ensured that BP’s commercial interests were inoculated from the effects of any sanctions. (The Guardian, 20 May)

Under Tory foreign secretary, William Hague, the FCO upgraded its presence in Calgary, Canada, to a full consular office in 2011. Above all, this was to back UK energy companies, including BP and Shell, which have major investments in the Alberta tar sands – some of the most polluting fossil fuels in the world.

In 2010, David Cameron brought former BP chief executive, Lord Browne, into the cabinet office to advise on the appointment of big-business figures onto the boards of each government department. Former BP executive John Manzoni, was made chief executive of the civil service. In April this year, BP appointed the recently-retired head of MI6, Sir John Sawers, to its board. He would bring invaluable geopolitical experience, BP’s chairman said. There can be no doubt about that.

This incestuous relationship was a strong feature of previous as well as present governments. BP was even dubbed ‘Blair Petroleum’ because of the revolving door of jobs and positions between the two – not to mention the war on Iraq in which securing that country’s vast oil reserves played a huge part. It is a crystal clear example of the make-up of an important section of the capitalist ruling class: the complete interaction of the political establishment with the big-business moguls who wield immense economic power.

The significance of all this in the battle to cut greenhouse gas emissions is huge. Tom Burke, formerly with BP, now advisor to Shell, Rio Tinto and Unilever, says the oil companies consider that measures to combat climate change would pose "an existential threat" to their business. He adds, however, that BP is "certain that government won’t act on their obligation to keep the rise in global temperatures below 2°C [above pre-industrial levels] and in fact will be allies to keep the revenues flowing".

Given the backing by government – mostly paid for by taxing workers and cutting the ‘social wage’ – BP’s arrogance is understandable. It must think it can do whatever it wants with complete impunity. When asked to comment on the contradiction between the urgent need to halt the rise in greenhouse gas emissions and BP’s expansion of fossil fuel extraction, a spokesman for the company said: "Affordable, secure energy is essential for economic prosperity and we forecast that global demand for energy is set to grow by nearly 40% by 2035. The International Energy Agency’s (IEA) estimates that by 2040 up to 60% of the fuel mix will still be fossil fuels; investment to develop oil and gas will continue to be needed". (The Guardian, 20 May 2015)

It shows the scale of the task, and the colossal vested interests standing in the way of fundamental change. In reality, the existential threat comes from the capitalist system. It is incapable of taking humanity forward. For the sake of the environment and the workers and oppressed people of the world, it must be replaced with a socialist system. Only under a democratic socialist plan of production can the world’s rich but finite resources be developed in a sustainable way.

Manny Thain

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