Oil giants are coming to terms with their impending doom. That’s especially true these days for BP, the London-based multinational fossil fuel corporation most notorious for causing the Deepwater Horizon oil spill in 2010. The company announced on Monday it’s writing down up to $17.5 billion (£14.1 billion) on its assets in the second quarter due to the coronavirus pandemic and its long-term projected impact on global oil prices.
BP is trying to save its arse by laying off 10,000 workers. Even after that move, the company is still preparing to be worth a lot less. That’s because it expects oil prices to stay low in decades to come. Why? Well, let’s allow BP to explain.
“bp’s management also has a growing expectation that the aftermath of the pandemic will accelerate the pace of transition to a lower-carbon economy and energy system, as countries seek to ‘build back better’ so that their economies will be more resilient in the future,” the company (which yes, is trying to make “bp” happen) wrote in a statement.
They aren't lying. The European Union is prioritising a green economic recovery. That’s not necessarily the case just yet for places like China or the U.S., but a dirty recovery could prove disastrous for climate efforts. That’s why experts and even the United Nations are calling on governments to seize this opportunity to transition towards low-carbon economies.
The pandemic rocked the oil industry that was already seeing declining profits. We’ve seen oil prices hit an all-time low, companies struggle to find storage space for their unsold oil and public demand diminish. Many people are still staying home, and few are hopping on a plane anytime soon. With no need to fuel cars or planes, oil companies’ profits are taking a hit. BP is just the latest oil major to acknowledge the transformation taking place.
BP’s CEO Bernard Looney said the recent decisions “will better enable us to compete through the energy transition,” but the company is definitely is going about it in all the wrong ways so far. Laying off thousands of workers breaks all the rules around a just transition, which should prioritise worker protections so that the working-class doesn’t bear the economic burden of abandoned oil and gas. Sure, the multi-billion dollar company offered workers a severance package that included a laptop and help job-seeking, but that’s not enough. These workers deserve to play a key role in the budding green industries that’ll transform our world, such as jobs in energy efficiency or clean energy.
A system that supports fossil fuel workers doesn’t yet exist, but the responsibility lands on world governments and companies like BP working together to protect them and, ultimately, the economy. After all, hundreds of thousands thrown into unemployment doesn’t exactly improve the economic situation.
What’s more, the company hasn’t given a clear sign that it’ll actually reduce oil and gas exploration and drilling despite its ambition to achieve net-zero emissions. That would seem to be the most obvious step toward reaching its goal. BP has a history of greenwashing and is currently be sued for false advertising around its climate claims, so excuse me for not taking it seriously. But hey, at least the economy is finally catching up with the planet’s best interests.
Featured photo: Getty