Adapting to deliver. What Brunel’s legacy teaches us about energy in a changing world

Introduction

Hello everyone.

And thank you.

It’s an honour to be with you today.

For those of you who don’t know me.

I’m Fuzzy Bitar.

In my day job at bp, I lead on health, safety and environment.

As well as carbon.

I’ve been in the energy industry over 35 years.

I’ve seen a lot.

Learned a lot.

And I have the great privilege to pass on some of this knowledge in my role as a professor at this incredible university.

Although, to be honest, I often feel like I am the one learning.
 

I marvel at the standard of students here.

They are befitting of Isambard Kingdom Brunel’s name and legacy.

My industry takes much inspiration from the great man’s engineering feats.

How they continue to deliver for people’s needs.

Like the four million vehicles and five million pedestrians and cyclists that cross the Clifton Suspension Bridge in Bristol every year.

The 80 million passenger journeys taken on the Great Western Railway between London and the west of the country.

And the 40 million passengers that pass-through Paddington Station, here in London, again each year.

Including one marmalade-loving bear from Peru, of course.

But.

My industry can learn even more from how Brunel adapted to deliver his projects.

Because here’s the thing.

Despite his now iconic status.

Brunel faced several challenges in his own age.

One of his obituaries – in the Engineer no less!

Even said that Brunel was “almost uniformly unsuccessful”

Their words, not mine.

Let’s be clear on that.

Perhaps the writer was referring to the SS Great Eastern.

The steamship designed to take passengers from the UK to Australia.

But was too large for most ports.

Or perhaps it was regarding Brunel’s broad gauge railway track.

A bespoke size, designed for speed and stability.

But was incompatible with other tracks.

Whatever the reason, the writer failed to mention that with each challenge, Brunel found a solution.

He adapted his projects and delivered a successful outcome.

The SS Great Eastern found a new purpose.

Laying the first transatlantic cable.

And far from being scrapped, Brunel’s broad-gauge railway was converted to align with standard sized tracks.

Put simply: To succeed, Brunel adapted to the realities of the world he faced.

And that is what the energy industry and wider world is reckoning with right now.

Because, like some of Brunel’s projects, the energy transition is proving even more challenging than first expected.

Let’s look at why that is.

And what it means for our industry.

 

Pre 2020

 

A decade ago, the world gathered in Paris for the UN’s COP 21 climate change conference.

 

The consensus between governments, industry and business for action to address climate change seemed clear.

 

A groundbreaking agreement was reached, including the need for action to reduce emissions.

 

By 2020, more than 100 countries had made net zero pledges.

 

The EU had begun work on its Green Deal strategy.

 

And large parts of society were also calling for change.

 

I recall my own daughter, around 17-years-old at the time, taking a very “active” interest in my work.

 

And she questioned whether I, and others in my industry, cared about her generation’s future.

 

The answer was: of course we cared!

 

And parts of our industry took steps to transition towards more lower carbon energy.

 

While also continuing to find ways to reduce emissions from existing operations.

 

Momentum continued to build.

 

And then we all know what happened.

 

From 2020, the world experienced some incredible shocks.

 

The quote about there being weeks when decades happen, never felt so apt. 

 

There has been so much upheaval.

 

Through COVID.

 

Wars across continents.

 

Economic shocks.

 

And much more.

 

At times it has felt like the world was a snow globe vigorously shaken by an

over excited child.

 

It can be hard to know which way is up at times.

 

All these factors, of course, impacted the energy sector.

 

The result was that market and government attitudes rapidly shifted.

 

Understandably, governments have reprioritized energy security.

 

They have looked to companies in our industry to find solutions to help keep energy flowing.

 

And pressure on budgets meant that energy affordability is also at the forefront of people’s minds.

 

And a lot of the cheaper energy tends to be fossil-fuel generated.

 

Plus, investor alignment has been tested with a renewed focus for some investors on short-term returns over less certain, longer-term lower carbon investment.

 

It’s a complicated reality.

 

The expected pace and progress of the transition and decarbonization has slowed – and is different in different places.

 

Today

 

So where does that leave us all today?

 

Well, for one, we know that 2024 was the fourth consecutive year of increased fossil fuel demand and CO2 emissions.

 

And last year was also said to be the hottest on record.

 

But, at the same time, the world is still making progress on low carbon energy.

 

As of last year, investment in the low carbon energy system is expected to have reached $2 trillion in total.

 

It's a lot of money being invested.

 

That’s equivalent to more than $2.5 million every single day, day in and day out, over the past two millennia.

 

So, the investment and infrastructure for low carbon energy is real and is happening.

 

But there is another reality at play that cannot be ignored. 

 

Despite all the progress, low carbon energy is not growing quickly enough to meet the world’s rising overall energy demand.

 

In fact, around 104 million barrels of oil per day were consumed last year, to help keep pace with global energy demand.
 

The transition is in an energy ‘addition’ phase, rather than a ‘substitution’ phase.

 

By that, I mean that low carbon energy is adding to traditional fuels, rather than replacing them.

 

Put simply, people are consuming more of a bunch of fuels rather than swapping out one fuel for another.

 

But the truth is, we should not be surprised by this.

 

Energy transitions have always taken a long time.

 

It has never been a case of introducing one type of energy source to instantly replace another.

 

The history of oil is a good case in point.

 

It was way back in 1859 when the first commercial oil well was drilled in Pennsylvania, in the US.

 

A long time ago.

 

The year Brunel died.

 

And yet.

 

It was not until 1964.

 

A time when the Beatles took on America and James Bond stopped Goldfinger taking over the world.

 

It was not until that year, that oil finally took over from coal as the world’s primary energy source.

 

So, despite the advent of the combustion engine.

 

It took more than a century for oil to overtake coal as the most consumed fuel.

 

It’s quite remarkable, isn’t it?

 

And even when that happened, it is not like oil replaced coal.

 

Oil has been an additional fuel to coal, not a substitute. 

 

Even today: oil, coal and gas together make up around 80% of global energy consumption.

 

So, 166 years after the birth of the oil age, we find that coal is still part of the energy system.

 

This reinforces the fact that when a new energy source is introduced.

 

It does not instantly phase another out.

 

And that it takes time, investment and infrastructure to penetrate the market.

 

Electricity is another good example.

 

Last year, electricity demand growth continued to outpace total energy demand growth.

 

A sign that the world’s energy system continues to electrify.

 

And yet, there are almost 670 million people.

 

That’s 8 in every 100 people on Earth.

 

Who still do not have access to electricity.

 

That’s despite the fact that early use began in the late nineteenth century.

 

Nearly 150 years ago.

 

So, transitions take time.

 

bp

 

Turning to my company, all these factors are informing how we think at bp. How we plan our business for today and tomorrow.

 

Back in 2020, we made some bold strategic changes, which saw us significantly increase investment to grow new lower carbon businesses.

 

While planning to progressively reduce our core oil and gas business. 

 

In hindsight, our optimism for a fast transition was misplaced and we went too far and too fast.

 

We chased too many projects.

 

Tried to do too many things at once.

 

And got the risk and reward out of balance.

 

Like others, we have learned a lot over the past five years.

 

We looked at where energy demand is heading.

 

And can see that demand for energy overall continues to grow globally, particularly for gas.

 

And so, we have adapted in a way that sets us up to be financially resilient.

 

That’s how we will supply countries, companies and customers with the energy they need today and tomorrow.

 

With a plan to grow our oil and gas production.

 

And make fewer, more selective investments in the energy transition, including biofuels, biogas and EV charging.

 

And it is all part of the reset we made earlier this year with a strategy that is more flexible, to the changing pace of the energy transition.

 

We’re focusing on fewer things with the strongest commercial potential.

 

Focusing on the areas where bp has always been great.

 

In building strong partnerships.

 

In trading - connecting customers with the energy they need.

 

And of course - in technology and engineering.

 

And we now have a strategy that gives us the flexibility to move at pace with society – not ahead of it.

 

Conclusion

 

So, what does Brunel’s legacy really teach us?

 

Here’s what I think.

 

Success comes from adapting to the realities that life, or the world, throws at you.

 

That’s what Brunel did.

 

And that’s what is happening in the energy sector.

 

This industry – our industry – is responding to rising and changing demand.

 

As it has always done, very successfully.

 

Trillions of dollars of investment are flowing both into low carbon energy and into oil and gas.

 

Because that is what is being asked of us to meet the scale of demand. 

 

And the energy system is evolving as a result – and as it always has done.

 

The track record of this industry for change is extraordinary.

 

And in five years’ time I expect we will look back, and it will look very different again.  

 

Technology is moving fast. AI is reshaping everything.

 

That’s why universities like this one are at the heart of that transformation.

 

Because the future will be built on knowledge, innovation.

 

And that key word ‘adaptability’.

 

We must continue to adapt to changing realities in order to deliver.

 

Just as Brunel did.

 

That’s how we serve the energy needs of today and tomorrow.

 

Thank you.