BP announced last week that they plan to reduce oil production by about 40 percent over the next decade, which is “at least one million barrels of oil equivalent a day”. They also announced to increase low carbon investment by a factor of ten to $5 billion a year. The plan is to develop from an International Oil Company (IOC) to an integrated energy company (IEC).
I applaud these plans. Every drop of oil that BP will not produce under this policy of reducing supply will not be burned. That will reduce emissions. Oil left in the ground does not emit CO2.
On the other hand, checking present oil supply, it sits at 80.6 million barrels per day. BP reducing their supply by one of those 80.6 million will not have any major impact on the big picture, if other oil companies don’t follow this move.
And the additional $5 billion in investment is nice to have, but the EU just decided to spend EUR 750 billion as their answer to the corona crisis, with 30% of that going to the European Green Deal effort. That works out to an additional EUR 225 billion in green investments, so the BP extra $5 billion does not change the big picture here either.
So what if the whole oil industry looked at the Bitcoin mining schedule and decided to reduce production by half every four years? Why restrict this very sensible move to one company (BP) as opposed to everyone around?
Of course, if oil companies right now held a meeting and decided to extend the BP move to the whole industry, they might actually be in violation of antitrust law.
As far as EU antitrust law is concerned, that is one way in which current EU policy is useless and harmful to the European Green Deal effort. That effort states that it is the most important policy of the EU Commission to finally do something about the climate crisis. And when the oil industry decides to actually go ahead and do something to limit emissions, they potentially get hit with a billion Euro antitrust fine?
I happen to think that the European Green Deal effort needs to update current antitrust policy to make sure it does not stand in the way of supply-oriented solutions. Antitrust should be abolished completely before it is allowed to harm climate efforts.
I may write some more about this…