Why BP is scaling back on renewables
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TEXT OF INTERVIEW
Bill Radke: Continuing our coverage of the U.N. climate change summit now. Some of the biggest energy companies in the world are in Copenhagen, including Britain’s BP — which the company likes to say these days, now stands for “Beyond Petroleum.” BP says it invested more than a billion dollars in renewable energies last year. But this year, the company says that’s fallen to possibly as low as half a billion.
BP’s director of European Government Affairs is Howard Chase. Howard, welcome.
Howard Chase: Good morning.
Radke: Why has BP decided to scale back its renewable energy investments?
Chase: Nothing’s changed in the strategy; I think what we’re doing here is concentrating on what we really can do. Let me give you a couple of examples. We’re looking at biofuels, for instance. Biofuels, we believe, can make a really valuable contribution — both to energy security, but also of course to reducing CO2 from transport. The other really good example is if you make electricity from natural gas, you can make it with much less CO2 than from for example coal. Those, I think, are two examples that aren’t necessarily renewable, but they are much lower carbon forms of energy.
Radke: Well sometimes the government pushes things along with subsidies. Why not invest some of the five and a third billion dollars in profit from the third quarter into something that might stand on its feet years down the road?
Chase: Absolutely. And first, we are investing and secondly, I accept your point about governments. But you need to invest in something where you can be fairly confident it is going to work in the longer term.
Radke: And what would it take to bring BP that kind of confidence in, say, solar?
Chase: Well in fact, solar is growing very quickly in the world economy, but from a small base. It’s only a very small part of the total energy that we use. And so we still need to invest heavily in what you might call conventional energy, oil and gas.
Radke: What, if anything, could happen at this Copenhagen conference to draw more of BP’s money into renewable energies?
Chase: I think for all of us in business, we’re looking to see a more predictable and clear long-term framework for running our businesses. So if governments can agree [on] a real framework on a global basis, a single agreement, if you like, going into the future, then I think all businesses can plan on a much longer-term basis. That’s really what we’re looking for from Copenhagen.
Radke: Howard Chase is director of European Government Affairs at BP. Howard, thank you.
Chase: Thank you very much.
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