Our programme of action to manage climate and carbon risk
We are taking steps to understand and address carbon and climate risk
Carbon risk assessment
To assess how carbon policy will affect our businesses in the future, we closely monitor national and international climate and energy policy developments. We factor our conclusions about future carbon policy risk into broader assessments of global and regional patterns of energy demand and supply. BP Energy Outlook, for example, summarizes BP’s view of what the energy world might look like in the future.
We also look at the effects of natural resource scarcities on patterns of energy supply and consumption as part of our Energy Sustainability Challenge programme. This analysis, along with external assessments, such as IEA’s World Energy Outlook, helps us to decide what resources we will seek to develop and where, and what technologies we will need to develop them safely and efficiently.
We see natural gas as a key part of the lower-carbon economy, as it is a plentiful resource that releases less carbon dioxide (CO2) than other fossil fuels when burned. Most importantly, the technologies needed to produce and use it are widely available today. We are playing a major role in the growth of natural gas with production in Algeria, Azerbaijan, Egypt, Indonesia, Oman, Trinidad & Tobago and the US. We are developing important supply chains to Europe, as well as to China and India, two countries that are likely to account for more than half of the growth in global energy demand between 2012 and 2035.
Internal carbon price
We require larger projects, and those for which emissions costs would be a material part of the project, to apply a standard carbon cost to the projected GHG emissions over the life of the project. The standard cost is based on our estimate of the carbon price that might realistically be expected in particular parts of the world. In industrialized countries, this standard cost assumption is currently $40 per tonne of CO2 equivalent. We use this cost as a basis for assessing the economic value of the investment and as one consideration in optimizing the way the project is engineered with respect to emissions.
Efficiency in our operations
We seek to increase energy efficiency across BP by requiring our existing operations to incorporate energy use considerations in their business plans and to assess, prioritize and implement technologies and systems to improve energy usage. For example, our Tangguh liquefied natural gas operation in Indonesia uses the heat generated in its liquefaction plant to reduce the amount of power needed to turn the gas into liquid for transportation.
Efficient fuels and engine oils for our customers
We work in partnership with vehicle and equipment manufacturers to improve the overall efficiency of use of our fuels and engine oils. For example, Ford’s ECOnetic cars – including the Fiesta, Focus and Mondeo models – are engineered with specially formulated advanced Castrol engine oils, which improve fuel efficiency and reduce CO2 emissions.
Technology and policy research
We deepen our understanding of future energy, technology and climate change trends through in-house research and in partnership with leading academics. For example, we review potential long-term energy and low carbon technology developments out to 2050 and we invest in the UK Energy Technologies Institute. We support energy and climate-related technology and policy research at universities including Oxford, Cambridge, Princeton, Tsinghua, Berkeley, Illinois, Harvard, San Diego, MIT, Tufts and the University of Texas at Austin.
Education and outreach
We engage with governments, non-governmental organizations, industry organizations, universities and other companies on issues relating to climate change. For example, through BP Target Neutral, we are working with the Glasgow 2014 Commonwealth Games to offset carbon emissions associated with spectator travel and to raise awareness of the impact of carbon from travel.
Climate change adaptation
Where climate change impacts are identified as a risk for a new project, our engineers seek to address them in the project design like any other physical and ecological hazard. We periodically review and adjust existing design criteria and engineering technology practices. We have guidance for existing operations and projects on how to assess potential risks and impacts from a changing climate to enable mitigation steps to be incorporated into project planning, design and operations.