What is the opportunity cost of politically correct global warming exercises that divert corporate resources away from improved safety protocols and efficient business practices?
This question has not yet found expression in media outlets that have a long history of courting British Petroleum (BP). But, it is explored in MasterResources.Org, a free-market energy policy blog that includes commentary from energy policy analysts and industry representatives. Some of the key players here, including Robert Bradley, CEO and founder of the Institute for Energy Research, have inside knowledge of the relationship between BP, Enron and the environmental movement.
As the “scientific consensus” in favor of alarmist claims gives way to updated research, Bradley, and other free market advocates, argue, that the global warming skeptics vilified for years in the news media were in reality quite prescient in their approach toward energy policy. By contrast, they point out, a strong case can be made that BP’s rhetorical overtures to green causes deflected attention away from reckless, irresponsible corporate practices that ultimately resulted in severe ecological devastation.
On the one-year anniversary of the Deepwater Horizon oil well explosion, it is worth recalling that BP was frequently on the receiving of congenial press coverage up until the accident, they note. Moreover, many of the same green groups now organized against the company had previously offered up effusive praise for BP’s stated commitments toward environmental causes.
Yesterday’s media darlings have been set back by a concentration of events that have eroded public support for the political agenda attached to the global warming campaign, notes Bonner Cohen, a senior fellow with the National Center for Public Policy Research (NCPPR). A critical turning point came in November 2009, when thousands of emails leaked from the Climate Research Unit (CRU) at the University of East Anglia in Great Britain demonstrated how proponents of man-made global warming theories manipulated and manufactured data, he said. This episode became known as the “climategate” scandal.
John Browne, who served as BP’s CEO from 1995 to 2007, was celebrated in the press as a forward-looking, environmentally aware “maverick” who had created a “green energy” company. At the same time, Lee Raymond, now retired as CEO of ExxonMobil, was severely criticized for questioning theories that connected human activity with climate change. He also cautioned against environmental regulations that lowered the standard of living in less developed areas of the world.
“We in the petroleum industry are not dismissing the global climate change issue,” Raymond said during his 1997 address to the World Petroleum Congress in Beijing. “But I don’t believe anyone should have the moral authority to deny people the opportunity to improve their way in life by arbitrarily depriving them of the means.”
“I hope that the governments of this region will work with us to resist policies that could strangle economic growth,” he continued. The “most pressing environmental problems [for developing nations] … are related to poverty, not global climate change,” Raymond warned.
This gesture on behalf of the third world, did not earn Raymond any plaudits.
“We would obviously consider the remarks of that petroleum executive to be short-sighted when it comes to a good faith discussion of this issue,” Clinton White House Secretary Mike McCurry, was quoted as saying in an Associated Press report.
“In terms of corporate responsibility there’s considerable irony here,” Cohen, the NCPPR analyst, observed. “Exxon’s safety record is vastly superior to that of BP and its CEO Raymond was ultimately vindicated for his skepticism about man-made global warming. But that’s not something you typically read about even now after the spill.”
BP and Global Warming Regulations
BP CEO Browne pushed hard for anti-emissions restrictions throughout his tenure even as consecutive U.S. administrations declined to sign off on the Kyoto Protocol of 1997. His break out moment came in March that same year when the BP chief embraced environmental platitudes and outlined new green initiatives in an address to Stanford University. Browne called upon private industry to join forces with government agencies on a “long and complex journey” away from fossil fuels and in the direction of alternative, clean energy.
“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,” Browne declared in his talk. 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.”
Media praise was immediate, swift and widespread.
“CEO John Browne, his reputation as a maverick in the oil business already established by his readiness to acknowledge that Earth’s climate may indeed be growing warmer, said his company will try out an emissions-limiting process that has potential for global use,” the LA Times beamed.
The earnest and enthusiastic support various green groups had for BP’s efforts figured prominently into subsequent reports where activists connected with Sierra Club, Greenpeace, the Environmental Defense Fund and others were quoted on BP’s behalf.
Dan Becker, who would become director of the Sierra Club “Safe Climate” campaign, credited BP for nudging the oil industry in the right direction in the LA Times.
“The oil industry is now split over global warming, and that’s significant,” he observed. “They’re a powerful player. That’s pretty dramatic. They’re doing something, and they’re doing something in the right direction. One cheer for BP.”
In anticipation of the U.N. meeting held in Kyoto, Japan in December (year), the Associated Press solicited commentary from the Environmental Defense Fund, which described BP’s action as a “historic acceptance of responsibility for the overriding environmental problem of our time.”
Fred Krupp, who served as the group’s executive director, was quoted as saying Browne’s proposals put “real pressure on the other oil companies to act like responsible adults, and I think it puts substantial pressure on the Clinton White House to advance a meaningful reduction target.”
The Financial Times described Brown as “The Sun King” in special recognition of his stated commitment to solar energy and other renewable technology.
Browne followed up with a major $200 million advertising campaign to rebrand the name BP. In 2000 he announced that the initials now stood for “Beyond Petroleum.” BP changed its logo. Instead of a shield symbol, the company adopted an environmentally friendly green and yellow sun.
“The new helios logo and the line beyond petroleum expressed the new identity of the company,” Browne wrote in his 2010 memoir Beyond Business. But, as investigative journalist Tom Bower reports in his book “Oil: Money, Power and Politics in the 21st Century,” the BP campaign was a public relations gimmick that deflected the company’s own attention and resources away from its increasingly unsafe corporate practices.
“Just imagine if John Browne had used the time and resources BP spent on climate alarmism and ‘Beyond Petroleum’ on real safety and environmental issues,” Bradley, the IER chief, observed in his blog for MasterResources.Org. “Diverted management attention has an opportunity cost.”
Leftie environmentalists bought into the slick marketing campaign and praised BP for elevating “form over substance,” Bradley continued. “What an irony: fake environmentalism driving out real environmentalism.”
When the Deepwater Horizon oil rig exploded, killing 11 workers, it unleashed the worst accidental oil spill in history. Right from the beginning, the project was bedeviled with engineering miscues. BP emails obtained by Congress shows the company’s own employees had expressed concern over festering dangers. “This has been a nightmare well,” a BP engineer write just a few days before the explosion.
The problems in the Gulf were not exceptional or unprecedented for BP. In 2005, BP suffered a major explosion at a Texas refinery that killed 15 people and injured 170 more. In 2006, a corroded BP pipeline spilled 200,000 gallons of crude into the Alaskan wilderness. The company later pleaded guilty to violating the Clean Water Act and was fined $20 million. The Environmental Protection Agency (EPA) and The Justice Department later sued BP for violations connected to the Alaska spill.
In the meantime, BP donated generously to green pressure groups and global warming causes.
The Nature Conservancy has received about $10 million from BP in grants, while the World Wildlife Fund has received just under $1 million in grants, research shows and the World Resources Institute has received about $200,000 from BP, according to financial records. BP was also a sponsor and major funder for the Climate Research Unit (CRU) at the University of East Anglia in Great Britain that is at center of the “climategate” scandal.
BP joined forces with Enron to cook up a new model of regulation aimed at restricting carbon dioxide regulations back in the 1990s. Christopher Horner, who served as Enron’s director of federal government relations, recalls the birth of ‘cap-and-trade’ schemes.
“It wasn’t until a few far-sighted CEOs, Ken Lay and John Browne, saw the opportunity for massive, guaranteed revenue streams guaranteed not on the basis of performance, but politics, did the greens’ agenda find political legs.” Horner explained. “Together they helped create a classic Baptists and Bootlegger coalition: the Business Council for a Sustainable Development with less-measured activist groups like the Union of Concerned Scientists. Together, as I learned, they worked closely on a plan to get a global warming treaty, with the U.S. involved, crafted to their liking and with a domestic ‘cap-and-trade’ scheme and other pots of money spinning gold from their uneconomic ‘investments’ made on the cheap for obvious reason.”
BP was also founding member of the U.S. Climate Action Partnership (USCAP), a coalition of business and environmental groups that lobbied on behalf of regulations modeled after the Kyoto Protocol.
On the one-year anniversary of the spill, that question about “opportunity costs” has largely been answered along the Gulf Coast where the Obama administration has been slow to grant approval for new oil drilling permits.