Last week, one of the world’s seven fossil fuel supermajors — Britsh Petroleum, whose legacy dates back to the early days of the oil age — announced, in essence, that the time had come to wind down its core business.
BP said that by 2030 it would be producing 30 to 40 percent less oil and gas than it does now. It promised to end exploration for hydrocarbons in new countries and to increase tenfold its stake in “low-carbon investment.”
Yes, the announcement came with caveats — it excludes its work with Russian gas giant Rosneft (BP owns a fifth of that company); some of those "low-carbon investments" are likely to be destructive in their own right, like biomass; and BP has a shaky record on follow-through (in 1997 it declared the company’s initials would henceforth stand for Beyond Petroleum, a stance it maintained for just a decade before doubling down on oil and gas).
But the news was nonetheless seismic for what it says about the decade past and the decade to come.
Two trends over the last 10 years have converged to produce this moment. First, a massive movement arose to challenge this industry. From small beginnings — for example, the remarkable indigenous campaigns to cut off funding for the development of Canada’s tar sands — this has become arguably the most widespread movement in human history. From Africa to Alaska, every new pipeline and coal port and frack well is fought, on the grounds of native sovereignty, local pollution and climate damage.
And the largest divestment campaign in the planet’s history has persuaded portfolios worth more than $14 trillion to steer funds away from fossil fuels. As TV stock-picker Jim Cramer told viewers back in January, “divestment all over the world” had turned oil stocks into tobacco; there is no longer money to be made investing in them. Even things like BP’s sponsorship of art exhibits were regularly challenged in recent years — it, like the other oil majors, was a company under siege.
Meanwhile, with help from the 2009 American Recovery and Reinvestment Act, engineers had spent the decade dropping the price of solar and wind energy by world-changing percentages — power from the sun cost barely a tenth in 2020 of what it did in 2010, and these renewable energies now provide electricity more cheaply than anything in human history.
Squeezed in these pincers, the oil majors have begun to squirm. They’ve started writing down billions in “stranded assets” — deposits like those Canadian tar sands they know will stay underground. They’ve made vague promises about change by 2050, which are fairly transparent efforts to avoid action now. And, in the U.S., they’ve tried (with real success) to game the Trump administration so that subsidies continue and environmental regulations disappear.
Those strategies kept alive their hopes for a managed and slow decline until the COVID-19 pandemic — by drying up demand and dropping the price for crude — truly laid bare these deeper stresses. At $40 a barrel, the spreadsheets of big oil bleed red; and the new, cheap green energy means that the eternal boom-bust cycles have probably seen their last real boom. A formerly cyclical business that could always rely on demand growth is now in secular decline, its destiny out of its control.
BP’s announcement is the first big capitulation to these new realities, but it won’t be the last.
What makes BP’s plan so important is the scale and especially the speed of the cuts it envisions. 2030 is the new 2050; it represents, says the U.N.’s climate panel, a real deadline in the effort to meet the climate targets agreed in Paris in 2015. The massive and ongoing climate disinformation campaign waged by the oil companies has cost us three decades; now we have to squeeze the work of 40 years into 10, and at best it’s going to be on the bleeding edge of possible.
We require a massive coordinated effort by governments to retrofit buildings, boost clean transport and revamp manufacturing — and to do it in ways that help, not hurt, those people and groups historically burdened by pollution.
In the U.S., that project clearly waits on the dismissal of the Trump administration — for the next three months, that’s the most important environmental project on the planet. And when Joe Biden takes office, the new administration will be under immense time pressure to move aggressively, both for the obvious substantive reasons but also to show the rest of the world that we’re actually serious.
Moving fast on clean energy also offers the best chance for climbing from the economic pit that a mismanaged pandemic has cast us into. It’s a real jobs program in an economy desperate for good-paying jobs. BP’s news shows that if we try to lead the world in this direction, a Biden administration will find allies.
Even though BP also announced it was cutting its dividend in half, its stock soared 7 percent on Tuesday. Investors, it appears, appreciate the logic behind winding down a losing business, on not throwing more money down a literal hole in the ground. It makes no sense to spend capital — financial or political — on pursuing a commodity that’s simultaneously deadly and unprofitable.
Thanks to the remarkable efforts of millions of activists and thousands of engineers, the world is ready to pivot. Now the questions are all about how fast we can push the pace. Because on a planet where temperatures pushed past 100 degrees Fahrenheit above the Arctic circle this summer, winning too slowly is just another way of losing.
Tom Steyer was a Democratic presidential candidate in 2020 and founded NextGen America, a progressive political advocacy nonprofit. Bill McKibben is a founder of the climate campaign 350.org.