Our programme of action to manage climate and carbon risk
At BP, we are taking steps to understand and address carbon and climate risk
In the future, we expect there will be additional government policies on greenhouse gas emissions and climate change. While having an increasing impact on our operating costs, these policies could potentially create new opportunities for us and other energy companies to develop lower-carbon technologies. In addition, direct climate impacts could become more severe, creating new operational challenges.
BP has a comprehensive programme of action to understand and manage these risks and opportunities:
- Assessing carbon risk
- Lower-carbon energy development
- Our internal carbon price
- Efficiency in our operations
- Efficient fuels and engine oils for our customers
- Technology and policy research
- Climate change adaptation
Assessing carbon risk
BP Energy Outlook 2030 looks at future global and regional patterns of energy demand and supply. It summarizes BP’s view of what the energy world might look like in the future. This does not necessarily reveal a future we would like to see, but it is the future that we think is most likely, or that is plausible.
This analysis, along with other BP-sponsored assessments such as the Energy Sustainability Challenge, and external assessments such as the IEA’s World Energy Outlook, helps us to decide what resources we will seek and develop and where, and what technologies we will need to develop them safely and efficiently.
Q: What is BP doing to adapt to climate change?
A: BP has been working with Imperial College on climate change impacts for nearly 10 years now. Our process began by looking at the literature on the subject and on the impact of climate change on specific facilities. We developed in-house capability including regional climate modelling. Finally, and perhaps most importantly, a mechanism was established within BP whereby major new projects have to screen for climate change impacts. This is a requirement, something integrated into the company and its processes. -- Ralf Toumi, Professor of Atmospheric Physics, Imperial College
Lower-carbon energy development
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 the US, Trinidad & Tobago, Indonesia, Algeria, Oman and Egypt. We are developing important supply chains to Europe, as well as to China and India, two countries that could make up more than half of global energy demand growth by 2030.
We continue to invest strategically in alternative energy, with $1 billion invested in 2012.
Our internal carbon price
We factor a carbon cost into our investment appraisals and engineering designs for some projects where appropriate. We do this in order to assess, and protect the value of, our new investments under future scenarios in which the cost of carbon emissions is higher than it is today. 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. An example is our Tangguh liquefied natural gas operation in Indonesia, which uses combined heat and power in the liquefaction plant that turns gas into liquid. This recovers the waste heat and uses it in steam generators to produce power, as well as using the remaining low-grade heat for the operation’s heating requirements. This has resulted in lower fuel consumption, fewer emissions and reduced maintenance of machinery.
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. In India, where the passenger car market is experiencing strong growth, we are working with Suzuki Motor Corporation to improve the fuel economy of its vehicles.
Technology and policy research
Through in-house research and in partnership with leading academics, we are deepening our understanding of future energy trends and climate change. For example, we invest in the UK Energy Technologies Institute and we support energy and climate policy research at universities including Oxford, Princeton, Tsinghua, Berkeley, Illinois, Harvard, the University of California, San Diego, MIT and Tufts.
Education and outreach
We engage with governments, non-governmental organizations, industry organizations, universities and other companies on issues relating to climate change. In 2012, we attended the Rio+20 United Nations Conference on Sustainable Development and the World Economic Forum (WEF) meeting in Davos, where we became a founding signatory of the WEF Energy for Society initiative. We signed the Carbon Price Challenge Communiqué, that calls for a price on carbon.
We used our role as the official oil and gas partner of the London 2012 Olympic and Paralympic Games to help raise public awareness of lower-carbon mobility options. Our multimedia showcases demonstrated new and emerging mobility technologies to a global audience.
Climate change adaptation
We are taking steps to prepare for the potential physical impacts of climate change on our existing and future operations. We are working closely with Imperial College in the UK to develop specialized climate models that help us to better understand and predict possible impacts resulting from the changing climate.
Projects implementing our environmental and social practices are required to assess the potential impacts to the project from the changing climate and manage any identified significant potential impacts. Where climate change impacts are identified as a risk for a 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. For example, a regional climate model was used in 2012 to inform decisions on the depth of cover required for river crossings for the South Caucasus Pipeline and to review any risks associated with landslides.
We regularly update and improve our climate impact modelling tools and make them available to both new projects and existing operations. An internal guide, available to both existing operations and projects, has been in place since 2010. It sets out guidance 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
The information on this page forms part of the information reviewed and reported on by Ernst & Young as part of BP's 2012 sustainability reporting. View the full assurance statement.