Lord Browne: Engage on climate or face regulation
Former BP CEO calls on oil & gas industry to start constructive dialogue with governments over environmental concerns—or risk misguided and ineffective legislation
The rise of environmental concerns in mainstream political debate could result in governments passing legislation that may be “extreme” and “not thought through”, according to Lord Browne, executive chairman of Russian oil investment vehicle L1 Energy and a former CEO of BP.
The industry must do more to engage with governments and environmentalists to understand their concerns and propose effective solutions based on science, Browne told a meeting on the fringes of the Adipec conference in Abu Dhabi.
"The industry has to understand that it has a clear obligation to plan things in an engineering way, and an economic way. We have a clear obligation to listen very carefully to the build-up of concern and emotion from our customers of today and our customers of tomorrow," says Browne.
“We have a clear obligation to listen very carefully to the build-up of concern and emotion from our customers” Browne, L1 Energy
In his view, not only do state-owned companies have a direct responsibility to their home country’s population, but non-state companies are also indirectly responsible in multiple ways—including via customers and investors—and thus need to balance potentially competing interests in their approach to the energy transition.
"For the non-state companies to ignore what people are now talking about will be to bring on, in the end, probably some very difficult times; times which are made more difficult by the response of governments in regulation and taxation, which could be extreme and possibly not well thought through.
“It is always very important to listen and get to the point where you can sit around a table with those that are criticising you.”
There is no single solution, Browne warns, to tackling climate change and he is suspicious of what he views as over-optimistic proposals. “There are absolutely no magic wands”, he says.
“I think it is important to be authentic here. If you are in the business of oil and gas production, you should say so. The main point is to figure out how you can decarbonise hydrocarbons.” There are various proven ways to do so, Browne contends, including mechanically through carbon capture and storage, agriculturally or various methods involving hydrogen.
“We know that we can do all of this. The engineering processes exist and are well known—but they are too expensive. So, someone has to help kickstart it. The more we do it, of course, the cheaper and better it becomes. The missing element is public policy," says Browne.
Lord Browne was the CEO of BP between 1995 and 2007. He was an early advocate within the industry for tackling carbon emissions—culminating in a BP rebrand as ‘Beyond Petroleum’ and the company diversifying into renewables, both of which were only partially successful.