British Petroleum (BP) is working to clean up its climate image. In the two months since environmental law nonprofit Client Earth filed a complaint against the UK oil giant with the Organisation for Economic Co-operation and Development (OECD) alleging its ads were misleading, BP has announced intentions to reach “net zero” carbon emissions by 2050, stop all “corporate reputation” advertising and, now, withdraw from trade associations with approaches on climate that are out of step with its values.
The company announced this week it will resign its membership in the American Fuel & Petrochemical Manufacturers (AFPM) and the Western States Petroleum Association (WSPA) and will not renew its membership with the Western Energy Alliance (WEA).
The decision came after BP conducted a review comparing the climate-related policies of several trade associations to its own. The company found its policies are not aligned with those of the AFPM, WSPA and WEA.
BP cited WEA’s opposition of federal methane regulation as a main area of misalignment. BP said “recent and developing differences in the area of carbon pricing” have contributed to its decision to leave the WSPA, as has its current focus on stopping a low carbon fuel standard (LCFS) initiative in Washington state. But while proclaiming to support a tax on carbon, BP contributed nearly $13 million to a campaign by the WSPA to help defeat a Washington state carbon emissions fee initiative in 2018.
BP listed disagreements over carbon pricing as the main reason for leaving the AFPM.
However, BP will remain a member of the American Petroleum Institute (AP), the U.S. Chamber of Commerce, the Canadian Association of Petroleum Producers (CAPP) and the National Association of Manufacturers (NAM), despite finding that its policies are only partially aligned with those groups. According to its review, BP disagrees with the API’s opposition to the federal regulation of methane, disagrees with NAM over its opposition to carbon pricing and differs from the Chamber’s approach to climate science and emissions reduction efforts.
Yet for now, BP will remain a member of these groups, despite the fact that the API, U.S. Chamber and NAM are well-known architects of climate science denial.
“A company like BP that engages with trade associations is doing a constant cost-benefit calculation--to what extent does this group represent BP's interest and its policy advocacy versus pose a reputational risk for the company with its own investors, and with the public," said Kathryn Mulvey, climate accountability campaign manager for the Union of Concerned Scientists. "Clearly the fact that the company is staying with the American Petroleum Institute, the US Chamber of Commerce, and the National Association of Manufacturers, despite finding only partial alignment indicates that there's a calculation being made on its part.”
BP is not the first oil major to call it quits with the AFPM. Shell withdrew its membership last year in response to pressure from investors. It continued its membership with the WSPA despite finding “some misalignment” between its own policies and those of the WSPA. Shell appears to have discontinued its WEA membership in 2016.
AFPM president and chief executive officer Chet Thompson said the association is disappointed.
"As a member of our executive committee they know that AFPM is and has been committed to supporting policies that address climate change. Because of that, it leads us to assume that this decision was made based on factors other than our actual positions on the issues,” Thompson said in a statement without specifying what those factors are.
The split could ratchet up the pressure on ExxonMobil and Chevron, along with other oil companies to examine their trade association membership, Mulvey said.
"We would expect it would make it a good deal harder for major oil and gas companies to hide behind third-party lobby groups,” she said. “We're starting to see a real new norm in terms of transparency, regarding climate policy positions and also action to address misalignment and inconsistency of trade group positions with stated company positions.”
BP said it will conduct its next review in two years and plans to provide periodic, internal updates to its board of directors and stakeholders. It did not rule out potentially withdrawing from more trade associations in the future.
“BP will pursue opportunities to work with organizations who share our ambitious and progressive approach to the energy transition. And when differences arise we will be transparent. But if our views cannot be reconciled, we will be prepared to part company,” said BP chief executive officer Bernard Looney in a statement, adding that the industry has long demonstrated it can collaborate effectively through trade associations.
“My hope is that in the coming years we can add climate to the long list of areas where, as an industry, we work together for a greater good,” Looney added.
Catherine Reheis-Boyd, president of the WSPA resident said her group and its members will continue to talk with BP and other stakeholders regarding the creation of a sustainable energy future.
“Our members know the way the world produces, distributes and consumes energy is evolving, and our industry will remain leaders in investing in and developing the diverse energy sources and technologies we need for the future,” Reheis-Boyd said. “Working together as an industry, we will rise to the challenge of a changing climate.”
The WEA did not immediately respond to a request for comment.
Mulvey said while BP is clearly concerned about its reputation and has pledged to be at net zero, whether the company will take the necessary steps remains to be seen. The company has so far only mentioned carbon capture technology and carbon offsets as methods to achieving net zero, promising to provide more details in September, nine months after its announcement.
Meanwhile, the company has pulled its “Possibilities Everywhere” campaign (the source of the Client Earth OECD complaint), but has been advertising its net zero commitment quite a bit on social media and in search engines.
BP’s withdrawal from the three associations does make one thing clear, Mulvey said.
"It lays down a gauntlet for ExxonMobil and Chevron to really step up or they may be understood, by the investor community in particular, to be falling behind their competitors."