Petroleum Goliath BP, or British Petroleum, recently announced a deal with massive implications towards a transition in sources of energy production and manufacturing. The deal was announced July 27th, a decision that came a year before schedule. CEO Bernard Looney, who had been making some moves in the right direction, takes a bounding step towards environmental responsibility with this change. In his words, "As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction ... Today’s agreement is another deliberate step in building a BP that can compete and succeed through the energy transition.”
BP is the fourth largest oil and gas company in the world. In an industry that has always correlated profits with pollution, a change in trajectory and business model is the type of revamping that can correct for some of the damage done by the oil industry in the last century. The hopes, of course, is that other companies see this and accelerate their own energy transition in order to keep pace.
Unfortunately, it's not as if by selling the assets, they disappear. The buyers, a chemical giant Ineos, will now have control of BP's manufacturing plants in the U.S., Europe, and Asia, along with pertinent licenses and technology. This begs the question, is this deal even a positive change overall? Could Ineos manage these assets in a more detrimental way to the environment? At face value, it seems like nothings changed - the same facilities are being used for the same polluting practices. It appears that federal incentives (or taxes) and buyouts will probably be required to close or green-retrofit these assets. That being said, the real implications of this deal wont be seen for years. While the assets don't vanish, the most important inference here is that major polluting companies are taking a good look at the science, consumer habits, and econometrics of the issue and believe that they are better off environmentally and fiscally by making such changes. Always a balance between profits and environmental stewardship, it is refreshing to see a company that truly aims for both birds with one green stone.
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