On April 12th, 2012, we attended BP’s Annual General Meeting, and challenged the board with some tricky questions.
First of all, the meeting was addressed by Bryan Parras and Derrick Christopher Evans, representing Gulf Coast communities affected by the Deepwater Horizon drilling disaster. You can read about their powerful testimony to the Board here.
BP’s Chair, Carl-Henric Svanberg, largely ignored their questions – he even rudely interrupted Bryan Parras and told him to hurry up! Instead of a proper answer, he repeated the prepared BP PR statement about how they were doing all they could to help deal with the spill, despite the fact that they’d just been told that these efforts were completely inadequate.
Next, Clayton Thomas-Muller from the Indigenous Environmental Network told the meeting that BP’s Tar Sands extraction projects could soon be illegal, thanks to a legal challenge from the Beaver Lake Cree Nation over their treaty rights in Canada. You can read more about this important message from First Nations to BP here.
Again, the BP Chair largely ignored Clayton’s question, and instead waffled irrelevantly about the particular tar sands extraction techniques that BP were planning to use.
A series of campaigners from the UK Tar Sands Network were then able to stand up and directly challenge the BP Board with the following questions (interspersed amongst many other questions from ordinary shareholders):
1) Planning for a six degree future:
On page 22 of the annual report you state, quoting International Energy Agency figures, that in 2030 80% of the world’s energy demand will be met by fossil fuels. As a consequence of this, you state on page 23 that you accept there will be a 28% rise in annual CO2 emissions globally by 2030.
On the same page, you note that in this future – the future that you believe will happen – the world will fail to keep global temperature rise below two degrees. What the report doesn’t say is that if the temperature rises beyond two degrees then the world will have passed the tipping point on climate change and we will almost certainly be on the path to a six degree global temperature increase. This is the unavoidable consequence of the figures you quote, according to the International Energy Agency. The experts are telling us that in a 6 degree world we will face global food deficits, mass population shifts, frequent extreme weather disasters, the loss of many major cities and other huge infrastructure problems all of which will obviously have an effect on the world economy and on oil demand.
I can only assume from pages 22 and 23 of the Annual Report that BP is planning for a 6 degree world. Does the Board foresee BP remaining a commercially successful company in such a world of climate chaos with the resulting economic and social impacts? Can you provide any information Mr. Chairman on what plans the company is making to ensure its success in a 6 degree world?
BP’s Response: The Chair repeated the same response he’d made at the 2011 AGM, claiming that “There’s a difference between the future we think is likely to happen, and the future we’d like to happen”. He then also pointed out that BP was increasing its investments in wind energy and biofuels, and that renewables would have a vital role to play in the future. We countered this lame response in Question 6, below.
2) Lobbying (asked by someone posing as an ordinary shareholder, in an attempt to expose BP’s lobbying activities that are undermining important EU legislation):
The proposed EU Fuel Quality Directive calls for a 6% emissions reductions target for transport fuels. When passed, this could have an impact on our recently acquired Canadian oil sands operations and may be a considerable a threat to the profitability of BP’s operations. What is BP doing to assure its shareholders that such unfair legislation will not pass and impact on our dividends?
BP’s Response: The Chair took a few questions at once, including this one. He answered the other questions in the bundle, but ignored this one entirely!
3) Olympic Sponsorship (also asked by someone posing as an ordinary shareholder, to make BP admit the real reasons behind their sponsorship activities):
Given BP’s financial problems, and the drop in dividends that we have all experienced, I can’t help but notice the amount of advertising for BP’s sponsorship of the London Olympics, and cultural events taking place this year. This must surely run well into the tens of millions, way beyond what BP would normally be expected to contribute to public life as a good corporate citizen. I assume that such expenditure is justified by the company on the grounds of receiving a return of some sort, just as with any other investment of our company’s capital. This might include increasing our corporate citizenship profile or corporate entertainment opportunities. Could you tell us Mr Chairman, how much money BP has invested in sponsorship activities for this year’s events and detail for us what return you believe the company is getting on this investment?
BP’s Response: This question got a ripple of applause from some sections of the audience, who presumably didn’t like their potential dividends being spent on sport instead! The Chair passed this question over to Ian Conn, BP’s Chief Executive for Refining and Marketing. Although he was careful not to give an exact figure for the company’s lavish sponsorship deal, he did say that BP had written a business case for Olympic sponsorship “going through exactly the same processes as we would for any investment”. He said that the aim of their role as Oil and Gas Partner, sponsor of the Cultural Olympiad and Sustainability Partner was “brand protection and connection with customers and society”, and to “enhance their relationship with strategic commercial partners”, and that the company’s expectations were being met in these areas. These comments confirm that these kinds of sponsorship deals bring significant returns to the company and are all about the bottom line. BP is not supporting cultural and sporting events out of the goodness of its non-existent heart!
Mr Chairman, with the crime of “ecocide” soon to become international law, are you concerned that your decision to take BP into the Tar Sands might one day land you in jail?
BP’s Response: The Chair ignored the question.
5) Renewable energy:
Given that you say in your Sustainability Review that renewable energy sources ‘will be essential in addressing the challenges of energy security and climate change over the long term.’, why have you closed down BP Solar, your longest-running renewable energy division? Is solar going to be part of your long term plan, if not, why not, and how does investment in renewables compare to investment in fossil fuels?
BP’s Response: In a patronising tone of voice, the Chair explained that BP Solar had been sold off because it was no longer profitable enough. They were going into biofuels and wind power instead because there was more money to be made there, as they were better suited to BP’s particular infrastructure and expertise.
6) Interplanetary escape pod:
Mr Chairman, we’ve already heard that, according to your Annual Report, you believe that fossil fuels will still make up 80% of global energy use in 2030, leading to a 28% rise in CO2 emissions. You countered this by pointing to your investments in biofuels and wind power, but – even without going into all the problems with biofuels! – these investments are already included in the future energy predictions in your Annual Report. Your Annual Report clearly states that you believe we will be getting 80% of our energy from fossil fuels in 2030, despite your small investments in biofuels and wind. As we’ve heard, this will lock us into disastrous runaway climate change. So my question is: what’s the escape plan? I mean, the really scary stuff will start to kick in over the next twenty to thirty years, and a lot of people in this room will still be around then. So I can only assume that there’s some kind of interplanetary escape pod being built in a secret BP bunker, to carry the Board, executives and senior shareholders away as society collapses around us.
I’d like to know how many spaces are available on the ship, and where the Board is planning to escape to – Mars? The Moon? Somewhere deep below the Earth’s surface, or another solar system altogether? Also, are tickets available to shareholders and how do we book our place onboard?
BP’s Response: “I think we’ve already answered that question”! Of course, they hadn’t. We were horrified to hear that there was no escape plan, and that BP was happy to let us be killed by climate change, so we all fell over and pretended to die in the aisles. The security guards had to come over and drag us out. Most of the shareholders in the room seemed rather entertained by the whole thing – one shareholder even came up to us afterwards and congratulated us on a great protest…
7), 8) and 9):
Sadly, we didn’t get the opportunity to ask our three final questions, below, because time was running out and we needed to do our die-in stunt before all the shareholders left! Maybe next time…
One problem with BP’s Olympic sponsorship is that it makes the company more exposed to criticism, as we saw with the online hoax yesterday. For those who didn’t see it, a campaign group hijacked the Olympics website and issued a fake press release pretending that BP had been dropped as Sustainability Sponsor. A follow-up article in the Daily Telegraph spoke to several different groups who are planning further protests against Olympics sponsors whose activities they disagree with, including BP. Why did the board take the risky decision of not just sponsoring the Olympics, but taking on the specific role of Sustainability Partner? BP’s core business is in oil and gas – even more so now BP Solar has been sold off – and so surely the board should have realised that the inevitable criticisms would expose the company to significant reputational risk?
On page 70 of the Annual Report, you state that BP will be using Steam Assisted Gravity Drainage – SAG-D -to extract oil from the Canadian tar sands. You note that this method has a smaller land impact than open-cast mining, but you fail to mention that this extraction method still causes great damage to the local environment, by fragmenting habitats with seismic lines, drawing heavily on local aquifers and polluting the groundwater. It also carries the significant risk of steam blowouts, which could cause death or serious injury to staff, community members and wildlife. You then correctly note that because SAG-D requires the burning of large amounts of natural gas, it has a significantly higher carbon footprint than conventional oil. However, you then quote a low figure of just 5-15% of extra emissions per barrel, well-to-wheel, rather than the peer-reviewed Stanford University figure of 23% extra per barrel which is the official number that has been accepted by the EU. Because of this high carbon footprint, if all the currently accessible oil in the tar sands were burned it would take us 12% of the way towards the climate change “point of no return” all by itself. Why are the board playing down the risks and impacts of SAG-D technology?
On page 24 of the Annual Report, you say that a “diverse mix of fuels and technologies” will be required to meet future global energy needs, and cite oilsands as a necessary element of that mix. But the International Energy Agency’s most recent World Energy Outlook suggests that if the world continues along its current path, the Canadian tar sands would represent just 5% of liquid fuel production in 2035. So just a 5% more fuel-efficient future would mean we wouldn’t need the tar sands at all. Why are we pressing ahead with this risky fuel source when even the International Energy Agency suggests it isn’t really necessary?