BP’s Questionable Priorities

BP’s latest carbon emission reduction figures illustrate how easily carbon trading schemes, which rely on emissions reporting, cab be manipulated. According to the Sunday Times, the oil giant claims “a cut of 830 m tons in its annual carbon dioxide emissions — roughly equivalent to the entire output of Britain and the Netherlands combined.”

Environmental activists should be giddy over this engineering “marvel,” right? Wrong. Some of them blame “creative accounting” for this reduction. BP, reports the Times, “has decided to exclude the oil, gas and chemicals it buys on world markets from its emission figures, and now takes responsibility only for the hydrocarbons it has itself extracted.”

John Wells, BP’s vice president for environment, defended the change as a move towards greater accuracy, since the old method of counting emissions from oil and gas that the company traded but did not extract “overestimated the total greenhouse gases generated by BP.”

Confusing, but trying to appeal to green sensibilities should earn BP some slack from environmental extremists, no? Again, wrong.

Craig Bennett, Friends of the Earth’s senior campaigner on corporate issues, said BP’s “creative accounting” reflected a much wider deception.

“BP has spent millions rebranding itself as ‘Beyond Petroleum’ and this is yet another piece of greenwash to improve their image,” he said. “In reality they are still investing billions in finding new sources of oil and gas that will accelerate the destruction of the climate.”

Despite attacks like this, some energy companies cling on to the naive belief that those who want to destroy their industry can be appeased. They should stop wasting time, money, and effort in these “greenwash” campaigns, and more on their business fundamentals, such as safety, for which BP was recently fined over. According to Reuters:

BP paid an undisclosed amount for independent panel’s year-long investigation of safety culture at its five U.S. refineries. The panel, headed by former U.S. Secretary of State James Baker, found safety culture problems across BP’s U.S. refining system.

For BP (and other energy companies, for that matter), the lesson should be simple: Fix this; don’t worry about that.

Finally, if “reductions” on paper seem tricky now, imagine the accounting tricks we’d see under a cap-and-trade scheme in which government assigns value to emission allowances.