Trust is important to BP, says John Browne

Three fundamental values have always sustained human development: trust, confidence and optimism. Yet today, those values are suddenly being undermined by concerns about energy security and global warming.

Trust, confidence and optimism have taken us from a primitive economy, in which every individual and every family had to look after themselves, to an integrated society in which we rely on others to provide the basics of life, such as food, clean water and, of course, energy. If we reaffirm our values, they will help us meet the challenges of our own time too.

Companies, too, require trust, confidence and optimism if they are to be successful. As far as BP is concerned, we have had our problems in the last two years, including a tragic accident at our Texas City refinery, in which 15 of our colleagues died, and an oil spill in Alaska. We are determined to restore trust in our operations and we are working with everybody, from unions, to employees to regulators to apply the lessons learned, particularly those related to process safety.

Long-term risks

There are three long-term risks which we all ought to be concerned about. The first is political. Instability in the Middle East, the threat of confiscation and the risk of energy being used as a political instrument are all contributing to concerns that the supply of energy could one day be seriously disrupted.

The second risk is rising demand. Oil is not running out. At current levels of demand, there is estimated to be 40 years of oil and gas supplies. But the rapid development of China, India and other emerging economies is inevitably putting a strain on production. Demand in 15 years’ time could easily be 25 per cent higher than it is today.

The third risk – and the one about which I feel most passionately – is climate change. The science is still evolving, but the balance of opinion in the scientific community has tipped decisively towards believing that the temperature in the atmosphere is rising, and this has been caused by man-made carbon emissions.

Climate change

In his film An Inconvenient Truth, Al Gore says climate change is a planetary emergency. But it is also a humanitarian one. Climate change jeopardises all our confidence in the future. It raises the prospect of rising sea levels, more desertification, crop failure and heat waves.

Furthermore, as far as the energy industry is concerned, there is the additional risk that we and our products will get the blame for global warming. If that happens, the time and effort we have spent carefully building up trust and legitimacy in the communities in which we operate would suddenly prove fruitless.

One clear theme emerges strongly from these major, long-term risks. They share common solutions. There is an urgent need for us all – national governments, companies and individuals – to act now in order to slow the pace of energy demand, to improve our energy efficiency and to reduce carbon emissions.

Taking action

In the last 10 years, BP has tried to take a lead in the industry on all these issues, but especially on climate change. In 1997 we ‘left the church’ of large oil companies and I committed BP to reducing our own greenhouse gas emissions to 10 per cent below 1990 levels. We met that target seven years early, in 2002. I have also called for the development of an international carbon trading system.

BP is investing some of the cashflows received from oil and gas in our new alternative energy business. We are investing in solar and are on track to triple our manufacturing capacity of solar photovalvic panels within two years. We are developing a world-leading wind power business. We have assembled a large land bank. We are also investing in other innovative technologies, including carbon capture and storage.

One of the areas with most promise is biofuels. BP already buys and blends over 500 million gallons of ethanol in the US. And earlier this year we committed $500m to a biosciences institute at the University of Berkeley, California, which will develop new crops and new techniques to supplement the contribution to cleaner fuels already made by ethanol.

The challenges we face are serious and if we do nothing, they could be catastrophic. But the history of human development shows that if we work together and retain our trust in each other, our confidence and our optimism, we can triumph over almost any adversity.

Lord Browne was until recently Group Chief Executive of British Petroleum (BP) plc