BP: The dangers of going Beyond Petroleum
The world’s big energy companies need to realise that producing oil efficiently is moral purpose enough.
Since the start of the Gulf of Mexico oil spill crisis, US president Barack Obama has repeatedly referred to the besieged oil company BP by its old name, ‘British Petroleum’ even though it re-branded itself as ‘Beyond Petroleum’ back in 2001. This has caused a stir in the UK media and political circles. UK Prime Minister David Cameron has even pleaded for reassurance from Obama that he is not blaming Britain for the disaster. Trans-Atlantic spats aside, what is significant here is why BP, a global oil company, was so keen to disassociate itself from ‘Petroleum’ in the first place.
In 2001, Lord Browne of Madingley, then chief executive of BP, worked with advertising agency Ogilvy Public Relations Worldwide on a rebranding exercise for the company. This was less an extreme makeover than a full facial transplant, with BP spending over $200million to come up with a new image. The company adopted the new strap-line ‘Beyond Petroleum’ and replaced its traditional green shield with a new logo resembling a sun shrouded in green leaves.
‘Beyond Petroleum’, Browne said, was not just a name; it represented the company’s new ‘purpose and intention’. As the advertisements at the time made clear, the intention was to move away from the black stuff. One read: ‘Solar, Natural Gas, Wind, Hydrogen. And oh yes, Oil.’
Indeed, BP did much to raise awareness of the evils of the substance that continues to form all but a fraction of its revenue. It ran adverts showing the public criticising the oil industry in an attempt to inject ‘more humility, more transparency, more openness to the relationship’. One commentator felt the campaign was tantamount to ‘McDonald’s running ads in which Eric Schlosser, author of the exposé Fast Food Nation, discusses the horrors of ground beef’.
Under Browne’s stewardship, BP became the first multinational oil company to accept a causal relationship between increased carbon emissions and global warming. In 2005 it famously developed a carbon footprint calculator for use on its website. According to Mathis Wackernagel, executive director of the Global Footprint Network, the media campaigns around BP’s calculator played an important part in establishing the notion of a ‘carbon footprint’ in popular consciousness.
As a result, BP, the world’s second-largest oil company, came to rank high on a wide range of the ‘key performance indicators’ so beloved by companies. It was lavished with awards, including a gold ‘Effie’ at the American Marketing Association awards. Brand research revealed that BP was seen as the most environmental oil brand, and BP’s brand awareness rose from four per cent in 2000 to 67 per cent in 2007. It has been claimed that the rebranding generated considerable increases in sales for BP. In 2007, Business Week speculated whether the AA risk rating awarded to BP by credit agency Innovest was a result of its commitment to invest $8billion in renewables.
CEOs often vainly fancy themselves as great strategists, claiming to draw on techniques from the likes of Napoleon, Machiavelli and Sun Tzu to get one up on their competitors. Judging from the title of his biography, Beyond Business: An Inspirational Memoir from a Visionary Leader, it seems Lord Browne was taking stylistic direction from North Korean leader Kim Jong-il. In the book, he declared: ‘It is clear, from their actions, that some businesses and CEOs think there is no greater purpose than profit-making… I firmly believe that a business needs a greater purpose than just making profits… In BP’s case that greater purpose became to fulfil basic human needs: to provide heat, light and mobility and to go Beyond Petroleum.’
Environmentalists have, unsurprisingly, accused BP of eco-spin or ‘greenwash’. But they have got it the wrong way around: this is more a case of top-level executives being ‘brainwashed’ by green campaigners. Energy company EDF’s latest eco-twaddle, on the Team Green Britain website, is further confirmation of this corporate bowing down to green ideas.
Lord Browne suggests that there is a contradiction between making profits and having a greater purpose, without seeming to consider that being an oil company is worthwhile in itself. This attitude has impacted on the development of BP, as evidenced by Lord Browne’s cancellation of plans to exploit tar sands in Canada in 1999. The decision to halt the project was due in part to sustained lobbying from environmentalist groups and a realisation that the carbon footprint would be too big. By failing to focus on, and defend, its core product, BP was asking for trouble, leaving itself open to sustained attacks and accusations of hypocricy from greens.
The re-branding process was an attempt to make BP stand out from the crowd of global oil giants, but in pursuing the idea that energy production could be made into something clean and cuddly, the company was paying too little attention to its real business: finding, extracting and refining oil. As one commentator rightly points out in the Wall Street Journal, ‘a company can’t prioritise everything, and while BP was prioritising PR and acquisitions, it wasn’t prioritising operations’.
Furthermore, the obsession with appeasing environmentalists is arguably one of the key reasons why many of the core business operations of the company took place so far offshore – out of sight and out of mind. No need for any messy lobbying with politicians or having to take on the environmentalist lobby. Even former Republican vice-presidential candidate Sarah Palin – not exactly famed for her strategic thinking – makes a good point on this issue when she attacks greens on her Facebook page: ‘You’re not preventing environmental hazards; you’re outsourcing them and making drilling more dangerous. Extreme deepwater drilling is not the preferred choice to meet our country’s energy needs, but your protests and lawsuits and lies about onshore and shallow water drilling have locked up safer areas. It’s catching up with you. The tragic, unprecedented deepwater Gulf oil spill proves it.’
However, environmentalists aren’t deserving of all of the blame here. Rather it’s more the internalisation of their apocalyptic, risk-averse claptrap by the bosses of big business such as Lord Browne who – instead of actively lobbying in the interests of the company – become afflicted by a bi-polar disorder of extreme proportions. One minute they are guilt-ridden, self-loathing masochists; the next minute they are twenty-first century supermen imbued with a ‘greater purpose’ and on a moral mission to save the world.
To the credit of current, under-fire BP boss Tony Hayward, encouraging steps have been made since he took over from Lord Browne in 2007. Hayward has argued for a ‘back to basics’ approach, dropping the ‘Beyond Petroleum’ tag, resuming plans to exploit the tar sands, dropping expenditure in all windpower developments outside of the US, closing factories developing solar panels and alternative energy headquarters, all of which were beginning to appear like more of a marketing exercise than a serious investment in the future profitable development of the company. In BP’s 2009 annual review, Hayward announced – refreshingly – that whilst he supported the ‘low-carbon evolution’, BP ‘must also continue to produce the high-quality hydrocarbons required by a world with a growing population, growing economies and greater mobility… People need BP to keep doing what it does best.’
Oil companies like BP should be honest about what they do and not be ashamed of it. Whilst alternatives to fossil fuels will inevitably need to be developed over the next few decades, at present without oil the modern world as we know it would simply grind to a halt overnight. Ironically, this was not lost on Lord Browne who can reportedly appear like ‘a human flip chart arguing for the inevitability of the world’s reliance on oil for decades to come’.
If Hayward had come in earlier to change the company’s focus from green back to black, with a greater emphasis on operations and safety, perhaps this crisis could have been averted. If Obama is really going to ‘kick someone’s ass’ over the oil spill, as he has promised, then Lord Browne – along with all the other company bosses who have pandered to environmentalist demands in recent years – should be the first to bend over.
Patrick Hayes is a co-founder of the Institute of Ideas’ Current Affairs Forum and one of the organisers of the Battle of Ideas festival.
Previously on spiked
Rob Lyons put the Gulf-spill crisis in perspective and said that we’ve got to keep drilling. Elsewhere, he reviewed a documentary which presented a doom-laden vision of a post-oil world. James Woudhuysen explained why coal is vital to Asia’s growth. spiked and the Research Councils UK ran an online debate about the future of energy. Or read more at spiked issue Energy.
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