12 minute read
bpTT- Raising the Bar to Net Zero
bpTT’s Giselle Thompson speaks on the ambitious vision
A global challenge requires concerted effort towards global solutions. Multinational bp is leveraging its reach, adopting a single-minded approach across all business units in all territories to keep global temperature rise within 1.5 degrees C above pre-industrial averages. Its aim is to reduce carbon emissions to net zero and to use its influence in the rest of the world (cities, countries, communities and companies). Its strategy and process will see bp transforming away from oil and gas to an integrated energy company. Here’s the vision, in the world and in Trinidad and Tobago.
“We have retired the upstream/downstream business model that has served bp very well. In its place we have introduced a leaner, flatter structure, stripping away tiers of management and lowering the workforce towards a target of around 10,000 fewer jobs. My role is now five layers at most away from more than half of our employees. That means people’s ideas and voices can be more easily heard – and decisions taken much faster. We are now more centralized, more agile, and better integrated. This enables us to maximize value creation in a rapidly evolving market through economies of scale, and by exploiting synergies and driving continuous improvement in operational performance,” said Bernard Looney, CEO, in the 2020 Annual Report. The new vision articulated in the 2020 annual report consolidates the position of the multinational giant with respect to climate change and the Paris Agreement.
Giselle Thompson, Vice President Corporate Operations at bp in Trinidad and Tobago (bpTT) is optimistic and believes in the possibility that bp articulates: “It’s an exciting time as big corporations are stepping up to put sustainability at the core of their operations.
“We have an ambitious vision and we have committed to the aspiration to be ‘net zero’ by 2050; and to help the rest of the world to get there. We have created a strategic plan that is moving our operations to net zero emissions. We are also investing in the production of other lower carbon energies including renewables.”
Thompson echoes the position taken in the 2020 annual report which is bold and focused. bp states its intentions:
• To transform from an IOC (international oil company) to an IEC (integrated energy company);
• To produce net zero carbon emissions by 2050 and to work with the rest of the world to achieve this status; and
• To protect people and the planet through its operations.
bp has been operating in TT since the 1960s, producing oil in the 1970s; and was subsequently involved in the capture and monetization of Trinidad’s substantial gas reserves. bp currently holds exploration and production licences covering 3,600 square kilometres off the east coast of Trinidad. With 15 offshore production platforms, bp is the country’s largest hydrocarbon producer. bp holds interests in all of four LNG production trains operated by the Atlantic LNG Company of Trinidad and Tobago.
Global Energy Outlook
The company’s 2020 energy outlook considers three main scenarios for transformation and transition over the next 30 years. “The uncertainty is substantial, and these scenarios are not predictions of what is likely to happen or what bp would like to happen. Rather they explore the possible implications of different judgements and assumptions concerning the nature of the energy transition.”
A business-as-usual continuation of recent trends without major change in the pace or direction is not ‘consistent with the Paris Agreement’ and results in a reduction in global energy greenhouse gas emissions of only 10% by 2050 versus 2018.
In any of many possible scenarios that can be considered ‘consistent with the Paris Agreement’ – aimed at keeping global temperature rise below 1.5 degrees C - emissions from energy use must fall by around 70%, with a fall of approximately 80% in the developed world and 65% in the emerging world.
Net Zero is the bp ambition that aligns the company with the deliberate strategic push by global energy systems to reduce emissions by 95% by 2050 versus 2018, in line with the ‘1.5 degrees’ advice from the world’s scientists. Changes in societal actions and behaviours are key drivers. bp intends to be a transparent leader in effecting this change.
“According to the Intergovernmental Panel on Climate Change (IPCC), the world needs to cut emissions by 7.6% each year between 2020 and 2030 to be on track for limiting warming to 1.5oC,” said Claire Fitzpatrick, Regional President bpTT, at TT’s Climate Change symposium in June 2021.
“To put this into context there was an estimated 5.8% drop in emissions in 2020 as COVID-19 lockdown measures were implemented globally to curb spread of the virus. What’s concerning is that this emissions' reduction target of 7.6% yearly needs to be achieved without bringing the global economy to a standstill. We also know that the world demand for energy will continue to grow.” Not only grow, but it is also anticipated that energy demand is likely to change over the next three decades. Energy systems will have to change in response to the evolving demand.
Projections by bp predict: The world will electrify, with renewables a clear winner. Customers will redefine convenience and mobility, driven by electrification, digital and fleets. Oil and gas will be challenged but will remain part of the energy mix for decades.
Some mitigations will come from these areas: digital technology will transform lives – creating opportunities to drive innovation, unlock value and engage new customers and markets. Customers – countries, cities, industries and corporates – will demand more specialized and tailored energy solutions. Energy systems will become increasingly multi-technology, integrated and local.
What bp Means by Net Zero
Helping the world get to net zero means achieving a balance between sources of anthropogenic (human generated) emissions and removal by sinks of greenhouse gases, as set out in Article 4.1 of the Paris Agreement.
bp becoming a net zero company by 2050, or sooner, in the context of the new ambition, means achieving a balance between emissions associated with bp’s operations, emissions associated with carbon in bp’s net share of production of oil and gas, and the total of applicable deductions from activities such as sinks, for example carbon capture, use and storage (CCUS) and land carbon projects, subject to some limits and exclusions.
Ambitious Goals
In the world of energy, bp has built a resource of knowledge, skills and talent over more than 110 years. This includes thousands of expert scientists, engineers and technologists; people with outstanding capabilities in trading, shipping, marketing and innovation; strong relationships with leading companies, universities and governments. It extends to understanding energy markets and how they move; developing energy transition, convenience and mobility partnerships and businesses growing all over the world.
All rests on the structure of a robust and resilient financial frame and a disciplined approach to capital allocation.
In Trinidad and Tobago, says Thompson, “We are pursuing global goals locally with technology and efficiencies in our operations with a view of reducing greenhouse gas emissions year on year.
“Since 2019, we formed a ‘low carbon squad’, a multidisciplinary team to develop strategy and plan the business’ approach to lowering emissions here. It involves employees, investment in low carbon projects and working with others.
“Year on year, we have already delivered targets; In 2020, TT operations had a reduction in carbon emission of 20,000 tons. In 2021, we expect reduced emissions by 28,000 tons … we are already achieving sizeable reductions by changing equipment, efficiencies in generating power and transportation (marine especially).
“Our local ambition is no different to our global ambition and we are broadening our view of sustainability to find ways to improve the lives of people and the environment here in T&T. In doing so, this is how we demonstrate care for the planet. The energy transition needs to be a just transition so that no one gets left behind. There are still places that have no access to energy, and no electricity, so we see a need to create more focus on this. In addition, we need to help people develop the skills required for the future. And the planet: there must be sustainable use of water, protection of biodiversity, as well as more support for circularity.
“This is a big change for us globally and we believe that this can have a positive impact on TT. Already we have begun engaging with the industry and a number of stakeholders locally to share our business’ net zero ambition, and we have started bringing like-minded persons together.
“We continue to lend our voice to the issue of climate change because as an energy company we believe we can be a part of the solution. The country has been exploring the changing energy landscape and we have been able to bring bp’s global expertise into the discussions on hydrogen and renewable energy; and we will continue to lean on that expertise to help the evolution of energy in TT.
“We have opportunities to partner with other companies and stakeholders to embed practice as well as principle in business. We will focus more on building sustainability into what we do and will look to grow our focus beyond the charters we have signed for things like local content, to include more on sustainable livelihoods, and on environment and social issues.”
Creating Value Growing Business
The organisation has also changed and gone are the days of upstream and downstream. Looney reported, “We are now organised around four business groups. Production & operations is the operating heart of the company – and is focusing our resilient hydrocarbons portfolio on value. Customers & products is growing our convenience and mobility offers for an increasing number of customers. Gas & low carbon energy is growing to help meet rapidly increasing clean energy demand. Innovation & engineering acts as a catalyst, opening up new and disruptive business models and driving our digital transformation. And our trading & shipping business and regions, cities & solutions team knit together the offers of our four core groups to drive greater value creation.”
Customers remain at the heart of bp business. Their demand for convenience and mobility sets the pace for future business. Growth for the future will depend on flexibility and diversity. Low carbon electricity and energy will grow in scale, complemented by integrated gas, which has an important role in the energy transition.
The renewables portfolio, including offshore wind and solar, will build an integrated low carbon electricity position in select developed and emerging markets. The high-value equity upstream gas, LNG portfolio and marketing capability will be maintained. Innovation in the bioenergy business, focusing on biofuels, biogas and biopower will be encouraged. Early positions in hydrogen and carbon capture, use and storage will be enhanced.
Through the Production & operations business, bp will continue to produce the affordable hydrocarbon energy and products the world needs, and generate cash to fund innovative operations and the transformation to an Integrated Energy Company.
Sustainability and Safety
Safety is still a core value. It underpins bp’s business model.
With the new sustainability frame, Thompson said, “Space is being created for other areas: biodiversity; with a focus on ‘restore, maintain, enhance.’ We are having conversations with environmental stakeholders including NGOs and CBOs. We are in the early stages of realigning our social investments and CSR, looking to have a positive impact.
“Our partnerships are also progressing well. The solar project – a partnership with Shell and Lightsource bp is progressing and there have already been initial public consultations.
“We have part-sponsored an online science and conservation programme which has been a hit with both teachers and students. The programme is a collaboration between the Ministry of Public Utilities, Pennacool.com, bpTT and Shell. It’s been very exciting to see the younger generation get into the conservation and low carbon conversation using the online platform, especially during covid when learning transitioned online.
“We’re also continuing to look at longer term pathways or opportunities for Trinidad and Tobago as we navigate the energy transition. bp’s Advancing the Energy Transition (AET) team has studied existing energy systems in TT for the past year to identify opportunities and pathways to a low carbon future and we have engaged with stakeholders including the government to share what we have learnt.
“Our longstanding relationship with Mayaro will endure, creating opportunities for sustainable livelihood. We have helped development in Mayaro by raising educational levels through long standing programmes such as the Brighter Prospects tertiary level scholarships for university level education. Since 2003: we have provided 700 A level student grants; 600 more to industry training.
“MIPED the microfinance programme started in 2002, has provided over TT$120 million in loans, sustaining livelihoods in retail, trade, transportation, supporting entrepreneurship; and very importantly, food production in agribusiness and fishing.”
Caring for our Planet
The sustainability frame includes a focus on making a positive difference to the environment in which bp operates. The scope of care for the planet covers biodiversity, water management, nature-based solutions including those that reduce or remove carbon, circular economy and sustainable purchasing.
According to the 2020 report, “Our aim to enhance biodiversity focuses on making a positive impact through actions to restore, maintain and enhance biodiversity where we work. We expect that from 2022 all new bp projects in scope will have plans in place aiming to achieve net positive impact (NPI), with a target for 90% of actions to be delivered within five years of project approval. We also aim to enhance biodiversity at our major operating sites and support biodiversity restoration and sustainable use of natural resource projects in the countries where we have current or growing investments. In 2020 we launched our new biodiversity position and focused on sharing it with our stakeholders and putting in place the resources to deliver it. We also started work on defining our NPI methodology with Fauna & Flora International, which we expect to complete at the end of 2021.”
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