Thank you Dax - All protocols observed
We are meeting a mere seven months since the last conference and yet, such is the nature of life these days, a lot has changed in that time. In June we were in the middle of a lockdown here in Trinidad. While the world continues to grapple with COVID-19 there is some hope in the form of vaccines that are becoming available. The creation of COVID-19 vaccines has lessons for us as we confront climate change – it shows what can happen if there is alignment behind a clearly defined goal with a sense of urgency and purpose. It also demonstrates that more than one solution is needed to tackle global issues – and that includes climate change.
But you know what hasn’t changed? The urgency with which the world is moving to confront climate change or the momentum that is building as companies and countries seek to develop cleaner sources of energy. In fact, the pandemic has further propelled the energy transition with many nations building in “greening” initiatives as part of their economic recovery plans. We are seeing this particularly in Europe with growing commitments to renewables, hydrogen, CCUS and electric mobility.
We must keep up the momentum. Although there are many short-term challenges that demand our attention, climate change is a long-term issue and one that will confront not just our generation but generations to come as well.
We are five years on from the Paris Agreement. While there are concerns about the pace of change there remains a lot to be optimistic about. Since the agreement, more than 100 countries have pledged to achieve net zero by 2050 or sooner.
Admittedly, this is tempered by the mixed bag in terms of implementation of commitments, but the world is moving in the right direction.
The Paris Agreement has also been significant in nudging the corporate world. In the past 12 months over 1,000 companies have set net zero targets.
There are other reasons to be optimistic:
The cost of renewable energy is falling fast. The cost of solar panels fell by over 80% between 2010-2019. Onshore wind fell by 40% and Offshore by 29%. A lower carbon future is now far more affordable.
Our energy system is decarbonizing faster. The shift from coal towards natural gas and the increasing role of renewables decarbonized the energy mix by 4 percent in the five years from 2014-19. Prior to 2014, it took the world 25 years to achieve that same 4 percent reduction.
So what do we need to do?
Last year bp announced our ambition to be a net-zero company by 2050 and to help the world get to net zero. We also set out a new strategy with aims to increase low-carbon investment 10-fold, cut oil and gas production by 40% and reduce emissions by 35% to 40% -- all by 2030.
Since last year’s conference we have provided greater clarity on our strategy. We have also introduced our new sustainability framework which links our strategy to our purpose – that of reimagining energy for people and our planet. The sustainability framework is important because it reminds us why we need to change. It includes our net zero ambition and aims, as well as our wider approach to environmental and social issues with a focus on people and the planet.
This is a process however.
By 2030 bp will no longer be predominantly a hydrocarbon company. It will be an integrated energy company – with hydrocarbons one part of a more balanced portfolio. Some may hear this with trepidation, thinking ‘what does this mean for bp’s gas business in Trinidad’. I see it as an opportunity.
Although investment in renewables is increasing, gas will continue to play a key role as we transition. That is especially relevant for a country like Trinidad and Tobago which derives the majority of its earnings from the hydrocarbon-based
But times are changing. bp’s strategy, for example calls on us to deliver low carbon energy and electricity AND resilient and focused hydrocarbons. Even as we look to renewables, we have a responsibility to deliver hydrocarbons in a manner that helps us to achieve our Net Zero ambition. For example, included in bp’s aims are commitments to be net zero across our entire operations and to reduce methane intensity.
As Trinidad and Tobago embarks on its journey to a lower carbon future, it too will need to consider an energy sector which features a mix of renewables and hydrocarbons. We also need to widen the conversation to include consumers. The issue goes beyond resources and will require a behaviour change to adapt to the changes that are taking place. For example, any discussion on energy needs to include topics such as efficiency and conservation.
And, yes. We need to keep up the discussion on the electricity subsidy. The Energy Chamber has developed a lot of information on this topic but we need to ‘turn up the volume’ on the conversation. The subsidy distorts the gas value chain and doesn’t encourage efficiency. That distortion could hamper the development of new sources of energy if they are competing on a subsidized price.
So what’s next?
There is still a lot to do. How do we continue to develop a competitive gas business, while decarbonizing the gas value chain AND attract investments in new low carbon opportunities to support Trinidad and Tobago in its own energy transition?
To do this we will continue to work towards reducing our emissions and increasing our operating efficiency. We set annual targets to sustainably reduce our emissions and we will continue to do this. We are also implementing a methane measurement system to improve the quality of data capture and reporting using digital tools.
We also see value in progressing our partnerships:
In 2021 we will continue our support for online education in energy efficiency and conservation. We recognize the need to build awareness for these issues that are aligned to our sustainability framework. Through our partnership with Pennacool, the Ministry of Public Utilities and Shell we are looking to instill a culture of conservation and care for our planet in the younger generation.
We will also continue to work with the government, Lightsourcebp and Shell on Trinidad and Tobago’s first commercial scale renewable energy project. The project is progressing, with community consultations held virtually in November.
And we are working with Atlantic and our shareholder partners to support Atlantic’s emission reduction
Looking at a longer wavelength, to move the carbon agenda forward in Trinidad and Tobago we must all work together to enable and unlock new opportunities. Companies, civil society, academia and government, working in partnership to support Trinidad and Tobago’s energy transition, will create new opportunities for economic diversification and development. It is therefore important that we all work toward developing a clearly defined policy framework that can guide energy conservation and the development of renewable energy infrastructure necessary for the future. It would be
very powerful if all stakeholders can align around a carbon master plan aligned to a carbon policy. bp with the support of Vivid Economics, a consulting group, has been studying the existing energy systems in Trinidad and Tobago over the past year to identify pathways to transition to a sustainable low carbon future. We have been doing this through our Advancing the Energy Transition team and bp stands ready to engage and to share what we have been learning from this work. We will continue to be available to the Government and other stakeholders, open to partnering and working together to build a strong and sustainable low carbon energy future for Trinidad and Tobago.
That future is the prize.
Over the next few days, you will be discussing a wide variety of topics but all with the goal of preparing Trinidad and Tobago for a future that will look quite different. A move from being an oil and gas economy to an energy economy. As a hydrocarbon producer, and a pioneer in many respects, I believe Trinidad and Tobago can be a ‘leader in the energy transition’ as the conference theme suggests, but we have to want to be the leader. The transition to low carbon energy is another step on our energy path, much like the creation of Pt Lisas and the development of the LNG business.
I would like to congratulate the Energy Chamber for arranging what looks to be an engaging conference. Congratulations as well for keeping renewable energy and energy efficiency top of mind, for fostering collaboration and shaping the discussion. This conference has grown steadily from year to year which – I believe – demonstrates the momentum that is building in Trinidad and Tobago.
As the saying goes, “two minds are better than one.” We certainly have many minds focused on the challenge. I would like to say ‘thank you’ to the chamber for bringing us together and harnessing the potential that exists in Trinidad and Tobago.
I hope you enjoy the next three days.