John Browne’s 1997 Stanford University Speech: The “Beyond Petroleum” Beginning (and beginning of the end of BP?)
By Robert Bradley Jr. -- June 19, 2010“Stephen H. Schneider, a climate researcher and Stanford professor who wrote the first popular book on global warming, said [that Browne’s] speech was a welcome change of direction for an industry that has, until now, denied that global warming is a problem. ‘They’re out of climate denial,’ Schneider said.”
– Quoted in Glennda Chui, “BP Official Takes Global Warming Seriously,” San Jose Mercury News, May 20, 1997, sec. A. 20.
Then BP CEO John Browne’s speech at Stanford University in May 1997 marked the beginning of the company’s “green” (or to critics, greenwashing) approach to product differentiation and corporate governance. Left environmentalists applauded heartily–and would continue to do so until the Deepwater Horizon accident of April 2010.
Browne’s speech began by begging the question and proceeded to a non sequitur. It begged the question by assuming that anthropogenic global warming was bad and it leapt to the conclusion that corporations and for governments must fight it. In Browne’s make-believe world, there was no such thing as analytic failure or government failure–just market failure.
Today, we know what John Browne did not want to know 13 years ago. We know that the climate is far too complex to pretend to ‘stabilize’ through marginal changes in carbon dioxide (CO2) emissions. We know that government mitigation policies are all pain and no gain. We know that oil, gas, and coal are the real deal–and wind and solar are pretend, press-release energies that might even be CO2 positive.
We also know that the global warming issue resulted in incalculable intellectual fraud, grotesque corporate rent-seeking, and the waste of the environmental dollar (there are real, here-and-now ecological issues that deserve the global warming buck).
We also know, painfully, that BP put form over substance and took their eye off the ball. Beyond Petroleum was a failed corporate strategy that resulted in heedless, dumb cost-cutting that put profits losses ahead of people and the environment.
Reality can be a harsh mistress. BP went after an environmental fad, basked in the glow of the Left environmental movement, and now may have destroyed itself in the process. As with Enron, another ‘progressive’ ‘green’ company, the Left environmentalists got what they deserved.
If only John Browne had given a Lee Raymond-type speech and had conducted BP’s business in the manner of its more reality-grounded brethren. The blame for the fatal attraction goes deep, and it lands at the doorstep of the mainstream environmental movement that got BP into greenwashing.
John Browne’s speech follows verbatim.
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The world in which we live is no longer defined by ideology. The old spectrums of left to right and radical to conservative are still with us, but ideology is no longer the ultimate arbiter of analysis and action. Governments, corporations, and individual citizens have all had to redefine their roles in a society no longer divided by an Iron Curtain. A new age demands a fresh perspective on the nature of society and responsibility.
The passing of some of the old divisions reminds us that we are all citizens of one world, and we must take shared responsibility for its future and for its sustainable development. We must do that in all our various roles: as business people with capital to invest, as legislators with the power to make law, as individual citizens with the right to vote, and as consumers with the power of choice.
The global environment is a subject which concerns us in all our various roles and capacities. I believe that we’ve now come to an important moment in our consideration of the environment: the moment when we need to go beyond analysis to seek solutions and to take action. It is a moment for change and for a rethinking of corporate responsibility.
A year ago , the Second Report of the Inter-Governmental Panel on Climate Change (IPCC) was published. That report and the discussion which has continued since its publication shows that there is mounting concern about two stark facts: The concentration of carbon dioxide in the atmosphere is rising. And the temperature of the earth’s surface is increasing.
There’s a lot of noise in the data. It is hard to isolate cause and effect. But there is now an effective consensus among the world’s leading scientists and serious and well-informed people outside the scientific community that there is a discernible human influence on the climate and a link between the concentration of carbon dioxide and the increase in temperature. The prediction of the IPCC is that over the next century temperatures might rise by a further 1 to 3.5 degrees centigrade, and that sea levels might rise by between 15 and 95 centimeters.
Those are wide margins of error, but it would be unwise and potentially dangerous to ignore the mounting concern. The time to consider the policy dimensions of climate change is not when the link between greenhouse gases and climate change is conclusively proven, but when the possibility cannot be discounted and is taken seriously by the society of which we are part.
We in BP have reached that point. We must now focus on what can and what should be done, not because we can be certain climate change is happening, but because the possibility can’t be ignored. If we are all to take responsibility for the future of our planet, then it falls to us to begin to take precautionary action now.
There are two kinds of actions that can be taken. The first would be dramatic, sudden, and surely wrong. Actions which sought, at a stroke, drastically to restrict carbon emissions or even to ban the use of fossil fuels would be unsustainable because they would crash into the realities of economic growth. They would also be seen as discriminatory, above all in the developing world. The second kind of action is that of a journey taken in partnership by all those involved, a step-by-step process involving both action to develop solutions and continuing research that will build knowledge through experience.
BP is committed to this second approach, which matches the agreements reached at Rio based on a balance between the needs of development and environmental protection. The Rio agreements recognize the need for economic development in the developing world. We believe we can contribute to achievement of the right
balance by ensuring that we apply the technical innovations we’re making on a common basis, everywhere in the world. What we propose to do is substantial, real, and measurable. I believe it will make a difference.
Of the world’s total carbon dioxide emissions only a small fraction comes from the activities of human beings, but it is that small fraction that might threaten the equilibrium between the much greater flows. We’ve looked carefully at the precise impact of our own activities. Our operations–in exploration and in refining–produce around 8 megatons of carbon. A further megaton is produced by our chemical operations. If you add to that the carbon produced by the consumption of the products we produce, the total goes up to around 95 megatons. That is just 1 percent of the total carbon dioxide emissions which come from all human activity. Only a fraction of the total emissions comes from the transportation sector, so the problem is not just caused by vehicles. Any response that is going to have a real impact has to look at all the sources.
As a company, our contribution is small, and our actions alone could not resolve the problem. But that does not mean we should do nothing. We have to look at both the way we use energy–to ensure we are working with maximum efficiency–and at how our products are used. It also means contributing to the wider analysis of the problem–through research and technology and through engagement in the search for the best public policy mechanisms, the actions which can produce the right solutions for the long-term common interest.
We have a responsibility to act, and I hope that through our actions we can contribute to the much wider process which is desirable and necessary. BP accepts that responsibility, and we’re therefore taking specific steps:
- to control our own carbon dioxide emissions
- to fund continuing scientific research
- to take initiatives for joint implementation
- to develop alternative fuels for the long term
- and to contribute to the public policy debate in search of wider global answers to the problem.
No company can be really successful unless it is sustainable–unless it has capacity to keep using its skills and to keep growing its business. Of course, that requires a competitive financial performance. But it requires something more, perhaps particularly in the oil industry. The whole industry is growing because world demand is growing. The world now uses almost 73 million barrels of oil a day, 16 percent more than it did 10 years ago. In another 10 years that figure is likely to be more than 85 million barrels a day, and that is a cautious estimate. Some people say it will be more. For efficient, competitive companies, that growth will be very profitable.
But sustainability is about more than profits. Real sustainability is about simultaneously being profitable and responding to the reality and the concerns of the world in which you operate. We’re not separate from the world. It’s our world as well. To be sustainable, companies need a sustainable world. That means a world where the environmental equilibrium is maintained but also a world whose population can enjoy the heat, light, and mobility which we take for granted and which the oil industry helps to provide. I don’t believe those are incompatible goals.
All the actions we’re taking and will take at BP are directed to ensuring that these goals are not incompatible. There are no easy answers. No silver bullets. Just steps on a journey which we should take together because we all have a vital interest in finding the answers. The cultures of politics and of science and of enterprise must work together if we are to match and master the challenges we all face.
The American futurist Francis Fukuyama describes the future in terms of the need for a social order, a network of interdependence which goes beyond the contractual, an order driven by the sense of common human interest. Where that exists, societies thrive. Nowhere is the need for that sort of social order–at the global level–more important than in this area. The achievement of that has to be our common goal.
Joe Nocera’s column today in the NYT, “BP Ignored the Omens of Disaster,” points the culture finger at John Browne: http://www.nytimes.com/2010/06/19/business/19nocera.html
@Robert – Thank you for the article and for the link to the NY Times article. As a nuclear trained submariner who has also spent a lot of time around the commercial nuclear industry, I have been utterly dismayed by what we have all been learning about the decision making on the Deepwater Horizon and at other BP projects over the years.
The whole cowboy, cost cutting atmosphere in an inherently hazardous industry is exceedingly short sighted. I wonder how the corporate decision makers who emphasized speed because the drilling rig was costing $1 – $2 million per day feel now about the efficacy of that effort?
One of the things that we are all learning is that BP had a potential “elephant” on its hands that would be worth tens of billions of dollars in revenue over its operating life. Taking a bit more time and progressing with due caution would have been paying huge dividends – even ignoring the enormous external costs of this accident.
Fortunately for the nuclear industry, we started off from ground zero with the leadership of a man like Hyman Rickover, who was adamant about doing things right the first time and not taking short cuts. He was especially offended if anyone suggested that he could do sometime a bit cheaper, knowing that cutting cost in the short term could lead to long term problems.
Some parts of the commercial industry did not have quite the same attention to safety and long term thinking in the heady days of rapid construction in the 1970s, but even they took to heart the warnings from Three Mile Island that a bit of short cutting now could cause HUGE problems in the long run and could turn a multi-billion dollar asset into a bankrupting liability.
I feel reasonably confident that the people running the nuclear industry today would not have accepted the kind of behavior and cost snipping actions that BP has used repeatedly. They would explain to their shareholders and other influencers that caution, backups, second and third checks are worth the time and investment.
I hold a great deal of admiration for the way that ExxonMobil has responded to the Exxon Valdez and the way that they resolutely insist on making reality based decisions, not those that are aimed at increasing popularity. Exxon has the kind of leadership that would make it an excellent entrant into the nuclear industry.
Rod Adams
Publisher, Atomic Insights
PS – I happen to believe that there are many good reasons to believe that unrestricted gaseous waste dumping into our shared atmosphere is a bad idea, especially when there is a lower energy cost alternative that can provide even more reliable power than fossil fuels can.
In the mid-90s I led a competitive intelligence study for a large international oil and gas company. It was well known even then that BP was the worst operator in the business. And that was before the Prudhoe Bay leak, the Texas City explosion, and the Gulf disaster. The key fact is that they never learned from their disasters, while others did, as Joe Nocera accurately describes in his NYT piece.
Instead they gutted their R&D and started sprinkling large amounts of money to universities and NGOs to promote their disingenuous “Beyond Petroleum” initiative. Hundreds of millions went to Berkeley professor Steve Chu’s energy lab. Chu is now Secretary of Energy, and Steve Koonin, former Chief Scientist for BP, is now Under Secretary for Science in DOE. Others receive support for research that would disappear the instant global warming is widely known to be a nonthreat. Now in a huge irony, the BP-created disaster is being parleyed into an attempt to force cap and trade on an already beleaguered economy.
Some have defended BP as after all being a European company. However Royal Dutch Shell is far more European and needs to deal with European realities, but RDS has been far more responsible in its operations.
I notice what he tries to do before getting “beyond petroleum” is get “beyond ideology”. Did BP and GE unearth Mussolini’s diary at some point, and secretly decided they would try and resurrect corporatism? The fascist playbook has the “Third Way” as a key corner stone. Browne seems to have thought that the fall of the Iron Curtain, rather than being a victory for Democracy and Capitalism over Communism and Totalitarianism, was a opportunity to find a “middle ground” between them (this is what “New Labor” and the Clinton style Democrats in the 90’s thought, too). Or perhaps this same nonsense just resurfaces regularly in society. Why does everyone always seem to want to find the “middle ground” between freedom and tyranny? In what way is that desirable?
I agree that John Browne had the wrong priorities for BP: More money for show and less for safety. The wrong corporate culture.
It may be worthwhile to list the BP donations to Green groups and projects — like $400 million to Steve Chu at Berkeley to develop ‘alternative’ energy solutions.
says Rod, >… unrestricted gaseous waste dumping into our shared atmosphere is a bad idea, especially when there is a lower energy cost alternative that can provide even more reliable power than fossil fuels can.
Could you please tell me what that”alternative” is?? You mean there is an alternative to oil? What do you “believe”.
@nofreewind – There is certainly an alternative to oil and other fossil fuels in many – though not all – applications.
Uranium fission provides reliable heat from reactions that are six orders of magnitude (powers of ten) more energy dense than the combustion reactions used to produce energy from coal, oil and natural gas.
Nearly every use of energy in the world starts with heat as the necessary ingredient. With heat, you can directly adjust environmental conditions. With heat, you can boil water to produce steam. The expanded fluid can then be used to move machinery that can either generate motion directly or move magnets to generate electricity that can be distributed via wires.
I used to serve on nuclear powered submarines. Before uranium fission, all submarines were powered by oil burning diesel engines. Now none of them are in the US Navy. Before nuclear fission, all US aircraft carriers burned diesel fuel; now none of them do. Russian icebreakers, remote Antarctic research stations, and remote Siberian cities have all been powered with nuclear energy instead of using oil.
The waste products are tiny and relatively easy to keep isolated from the environment.
World wide, even after decades worth of focused opposition that has often been tacitly and directly supported by the fossil fuel competition, nuclear energy has increased its production from the equivalent of 0 barrels of oil in 1957 to the equivalent of more than 12 million barrels of oil per day in 2010. That number only counts commercial electricity production and not the ships and submarines mentioned above.
Just think how much more market share the fission industry could have captured without the focused effort to slow it down.
Rod Adams
Publisher, Atomic Insights
Host and producer, The Atomic Show Podcast
Founder, Adams Atomic Engines, Inc.
Thank you Rod. Nuclear energy makes great sense to me, but according to BP’s Review of World Energy 2010 Electricity creation is only 16% of all energy used. (in the US)
4100 TWhrs Electricity = 352 Million TOE = 16% of 2182 MTOE (Total US Energy Used)
So we can change over 75% of electricity to some type of nuclear and some big industry. But what about fossil used for heating? Certainly Electric Cars are nothing but a big dream, unless you believe that the National Debt is meaningless and that our ancestors should pay forevermore for the frivolity of having a 2nd electric car.
I doubt you will get many clear thinkers to be against create more of our electricity with some type of nuclear energy, but that still will only satisfy a small amount of our overall energy needs. Sadly, there is a tremendous force in this world that has the wish to deconstruct the prosperity of our society. And pushing this force forward are ruthless “capitalists”. The naive and gullible don’t have the slightest understanding that it is $money$ that is pusing this forward, not the force of goodness and a better world.
@nofreewind – the conversion that you have used neglects the thermal efficiency of conversion from heat to electricity. Yes, the electricity produced in the US only equals 352 million TOE, but we consume fuel containing about three times that much equivalent energy to produce it.
For example – we currently use about 1/3 of our total natural gas production in electrical power generation. The Energy Information Agency reports that amount as about 6 trillion cubic feet (TCF) of natural gas every year.
What if we produced that much more electricity with nuclear energy and used the natural gas as fuel for automobiles and large trucks. As Boone Pickens has pointed out, converting vehicles to use natural gas is a much easier conversion than trying to power them with batteries. I work in Washington, DC and see about 1/2 of the buses in the city sporting large lettering claiming they are powered by “clean natural gas”, so I know that the conversion is quite doable. Since gas currently sells for less than half of the cost – on a per unit energy basis – as gasoline or diesel fuel, the higher capital cost of the propulsion system does not take long to recoup.
We also produce 50% of our electricity by burning about a billion tons of coal each year. There are well known techniques for converting coal into a liquid hydrocarbon fuel. The process is quite dirty if the source of heat for the endothermic process is burning coal itself, but if the source of heat for the process was supplied by nuclear energy, we could have an excellent source of domestic fuel if we stop burning the coal for electricity and instead use the carbon in it as the feed stock for liquid hydrocarbons. The hydrogen part is pretty easy to find using steam cracking – a process that is widely used in refineries to upgrade heavy crude oil. You might be interested in learning more at http://www.liquidcoal.com.
I truly believe that the strong forces trying to keep a lid on energy supplies are not from people who want to “deconstruct the prosperity of our society”. The forces against abundant energy would love it if we all believed that to be true. Instead, I think that a major source of the support for making energy seem scarce comes from those people whose wealth and power is sourced from the perception that energy is scarce. That perception encourages us all to pay more than the fuel should cost and puts enormous quantities of dollars into the pockets of people who have no skills, talents or resources other than their influence over sources of hydrocarbons.
Thanks Rod. We definitely should be constructing more nuclear plants to create our electricity. But, i am not sure that sure that NatGas is a real viable option to fuel a significant amt of our driving. Aren’t NatGas cars much smaller? Don’t they have limited range? Aren’t they more expensive(much more for same size)? And, of course there are limited options for refueling.
Don’t you know how many poor people there are in this country that can hardly afford a normally priced car? Is this another “idea” where we need to fund this idea with huge never ending Gov’t subsidies, meaning, our children and their kids pay for these idea forever, just wracking up more Gov’t debt, thereby weakening our currency and economy? Now you might say, but we know what is good for you. (like making cocaine illegal). In the short run there is pain and adjustment to a lower standard of living, (smaller cars, more frequent filling, greater expense), but in the long run our country will be much better off? Will We??
Frankly, i have no problem whatsoever with getting our oil from foreign countries. Obviously drilling can be dirty business, I say pull those tankers up to the docks in foreign ports and fill them up!
I live in the Poconos of Pennsylvania, we often have harsh winters for many weeks at a time. I go to my local supermarket and the parking lot is literally filled with >50% pick-up trucks and SUV’s. These people have no idea what the intelligensia of our country wants to do with them.
All might profit from reading Robert Bryce’s commentary about NGVs in his book, Power Hungry.
Excuse me Rod, maybe I am missing something. I go to this Dept of Energy web site and use the natural gas vehicle cost calculator.
http://www.afdc.energy.gov/afdc/vehicles/natural_gas_calculator.html
Apparently they compare the cost of a NGV to a comparable gasoline vehicle, and take subsidies into account. I plug in my state of Pa, and even WITH the subsidies the NGV costs almost $7,000 more than the traditional vehicle, and I save a grand total of $300 of fuel per year! For the pleasure of my green smile, I have a vehicle with less trunk space, a limited cruising range, maybe by half? (i read 170 miles compared to the 350 I have and I HATE to stop and fill my tank as it is) and probably all kinds of other problems I don’t know about. This is the “future”. Sure, we can get a couple million “suckers” to go for this, even with the $7,000 override, but I can guarantee it will be just like when people see of the green energy choice on their energy bill. They decline. Of course, most people don’t even understand what a subsidy is, what the deficit is and the implications of it to our general economic well-being. I look forward to reading Power Hungry later this week.
nofreewind is being characteristically polite. Do read this link about the new Honda NGV:http://reportermag.com/article/car-review-honda-civic-gx.
As Robert Bryce shows, with a lot of upfront spending on a lot of things, it’s possible that a certain percentage of the US transportation fleet could be ng powered, which would please T. Boone Pickens. But even this would take much time–and boodles of subsidy. And the milage performance would not likely be an improvement on that of the 2009 Honda Civic, and it’s not clear that it would “burn” more cleanly, soup to nuts.
But at least we wouldn’t need to use all that offshore and foreign petrol–would we?
WOW. I am watching Gasland on HBO right now, what an eye-opener. I live on my own acreage in the country, with likely Marcellus Shale NatGas right under my feet. Natural Gas fracking produces its’ own set of problems, what a mess for the water supply. This documentary is a must-see and makes sense. Of course, the wind lovers don’t even know that to make wind effective, you most likely have to couple it with NatGas(hydro is not always available).
I am all for Foreign oil. Let someone else do the dirty work. Pull those tankers up and suck their holes dry! When the fossil is really worth big money, in 30 yrs, then we can use our own, and hopefully the environmental problems will be figured out.
Probably much of the Taliban money is coming from Afghani heroin anyway.
Back to the John Browne speech. Here is what two Left environmentalists said:
“In an important speech at Stanford University in May 1997, British Petroleum’s CEO, John Browne, said: ‘The time to consider the policy dimensions of climate change is not when the link between greenhouse gases and climate change is conclusively proven, but when the possibility cannot be discounted and is taken seriously by the society of which we are a part. We in BP have reached that point.’ This was a big jump for big oil.”
– Lester Brown and Jennifer Mitchell, “Building a New Economy,” in Worldwatch Institute, State of the World 1998 (New York: W. W. Norton, 1998), p. 185.
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