BP scraps green energy target and ramps up oil

BP, the energy giant that once promised to go green, has decided to hit the brakes on its eco-friendly ambitions and shift gears back to good ol’ oil and gas. In a move that’s got environmentalists shaking their heads and some shareholders popping champagne, BP announced it’s upping its fossil fuel investments to $10 billion a year. That’s right—while the rest of the world is trying to save the planet, BP’s doubling down on drilling.

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The company’s new CEO, Murray Auchincloss, is calling this a “fundamental reset” of BP’s strategy. Translation: they’re ditching their previous plan to cut oil and gas production and instead aiming to pump out 2.3 to 2.5 million barrels a day by 2030. Forget “Beyond Petroleum”—this is more like “Back to Petroleum.” Auchincloss insists this is all about “growing long-term shareholder value,” but critics are calling it a short-term profit grab that flies in the face of climate goals.

This pivot comes after BP’s market value took a nosedive over the past two years, while rivals like Shell and Exxon have been raking in cash by focusing on fossil fuels. Adding to the pressure is activist hedge fund Elliott Management, which has snapped up a $4.8 billion stake in BP and is pushing for even more oil and gas investment. Rumors are swirling that Elliott might even push for a breakup of the company.

Environmental groups, meanwhile, are not impressed. Climate action group 350.org called BP’s move a “clear demonstration” of why profit-driven corporations can’t be trusted to lead the renewable energy transition. Greenpeace UK went a step further, warning that BP can expect “pushback and challenge at every turn” if it keeps betting on fossil fuels. Even some shareholders are uneasy—48 investors recently demanded a vote on any plans to abandon BP’s green commitments.

But let’s be real: BP’s not alone in this fossil fuel frenzy. Shell and Equinor have also scaled back their green energy plans, and with oil prices bouncing back post-pandemic, the lure of black gold is hard to resist. BP’s shares did a little happy dance ahead of the announcement but quickly slumped afterward, leaving everyone wondering if this strategy reset is a stroke of genius or a giant misstep.

Here’s what it means for you:

1. Increased oil and gas extraction can lead to environmental damage, including air and water pollution, habitat destruction, and oil spills. These can directly impact your local communities and the environment you live in.
2. In the short term, increased oil and gas production could potentially stabilize or even lower energy prices. However, this is dependent on various global market factors.
3. If BP’s strategy proves profitable, it could lead to increased returns for shareholders. This could affect your pension funds or investment portfolios.

Source; The Times, The Guardian, France24.

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