Browse content similar to Lord Browne - Chief Executive BP, 1995 - 2007. Check below for episodes and series from the same categories and more!
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years. Time for HARDtalk welcome to | :00:21. | :00:24. | |
HARDtalk. My guest today made his name and fortune in the oil | :00:24. | :00:27. | |
industry, and in the process became one of Britain's best known | :00:27. | :00:31. | |
business leaders. Lord Browne was BP's boss for 12 years where he | :00:32. | :00:38. | |
expanded and diversified one of the world's fossil fuel giants. He's | :00:38. | :00:41. | |
back in the thick of the energy debate, backing a company eager to | :00:41. | :00:45. | |
develop shale gas production in the UK. His career has been defined by | :00:45. | :00:47. | |
the search for fossil fuel and economic sustainability. Can we | :00:47. | :00:57. | |
:00:57. | :01:23. | ||
Welcome to HARDtalk. Thank you.It strikes me that you spent pretty | :01:23. | :01:27. | |
much your whole professional life in the quest for fossil fuels. I | :01:27. | :01:32. | |
wonder now, looking back on a long career, whether that is a source of | :01:32. | :01:37. | |
absolute pride for you or whether you feel somewhat ambivalent about | :01:37. | :01:42. | |
it? I am very proud of it because fossil fuels have enabled all of us | :01:42. | :01:46. | |
to do far more than we could have done without them. They, like | :01:46. | :01:50. | |
everything else, have a good side and a dark side, but I am very | :01:50. | :01:54. | |
proud of the fact that I have helped bring energy to a lot of | :01:54. | :02:00. | |
people in the world. But unleashed the dark side as well. Absolutely. | :02:00. | :02:04. | |
I have recently written a book about seven elements. Every element | :02:05. | :02:11. | |
has a dark side and a good side. Richard Feynman, the great American | :02:11. | :02:16. | |
physicist, said every man is given the keys to heaven and the same key | :02:16. | :02:20. | |
opens the gates of hell. And I think this is true with the | :02:20. | :02:24. | |
elements, particularly with carbon. It brings pollution, issues of | :02:24. | :02:30. | |
global warming, greed, corruption, all of these things. But equally, | :02:30. | :02:36. | |
it brings heat, light, mobility. You can read at night, stay warm in | :02:36. | :02:42. | |
cold climates and warm -- hold in warm climates and you can do | :02:42. | :02:46. | |
extraordinary work. And it fuelled the industrial revolution. It is | :02:46. | :02:51. | |
why we are all sitting here. That amount of coal for a man of average | :02:51. | :02:56. | |
weight can do the same amount of work as a man working for 100 days | :02:56. | :03:00. | |
and that was the breakthrough. have already introduced a topic and | :03:00. | :03:08. | |
one to get to, climate change. I am fascinated to remember that it was | :03:08. | :03:12. | |
you in 1997 who was the first of the large oil chief executives to | :03:12. | :03:16. | |
make a set-piece speech in which you said that there does appear to | :03:16. | :03:23. | |
be a link between man-made carbon emissions and our changing climate. | :03:23. | :03:27. | |
You were criticised by others in the industry, including the chief | :03:27. | :03:34. | |
of Exxon at the time. Looking back, rather than speaking about it, | :03:34. | :03:39. | |
could you have done more to change the situation? We did quite a lot. | :03:40. | :03:44. | |
I never like going back to justify history but the reality is that the | :03:44. | :03:47. | |
world cannot live without hydrocarbon fuels but we can mix | :03:47. | :03:52. | |
them up with different things to reduce the amount of carbon week in | :03:52. | :03:57. | |
it. For example, if we burned all the natural gas we had as reserves | :03:57. | :04:02. | |
in the entire world today, we would only use 33% of what is called the | :04:02. | :04:08. | |
carbon budget that we have to prevent the atmosphere, apparently, | :04:08. | :04:13. | |
all the world are warming up to that levels. Let's be very clear, | :04:13. | :04:17. | |
briefly and clearly, you believe that man-made climate change is | :04:17. | :04:21. | |
continuing to happen and that it threatens to go beyond the two | :04:21. | :04:25. | |
degrees centigrade rise that scientists posit is the threshold | :04:25. | :04:29. | |
beyond which it becomes really dangerous. Like a scientist, I have | :04:29. | :04:33. | |
to say I believe it because of probabilities but in the back of my | :04:33. | :04:37. | |
mind, I do believe they might be something worse or something much | :04:37. | :04:42. | |
better. Right now, temperatures not rising as fast as "of they should | :04:42. | :04:47. | |
be". But yes, this is an issue and we should start taking precautions | :04:47. | :04:52. | |
to make sure it does not happen. You were well known through the | :04:52. | :04:58. | |
late 1990s and early to thousands for taking the p in a different | :04:58. | :05:03. | |
direction. BP's standing for beyond Petroleum. You took decisions not | :05:03. | :05:08. | |
to get involved in tar sand exploitation in Canada. You wanted | :05:08. | :05:14. | |
to be the first green will company, it seemed. But we look at BP today | :05:14. | :05:20. | |
and it must be concluded that will strategy has failed. Well, you can | :05:20. | :05:25. | |
conclude what you want. What I was doing was tried to diversified the | :05:25. | :05:28. | |
base of the company to make it sustainable for the future, to be | :05:29. | :05:33. | |
involved in debates about itself. It is an uncomfortable feeling as a | :05:33. | :05:38. | |
company to have other people debate your future without you been at the | :05:38. | :05:43. | |
table where the debate is taking place. I wanted to do that and I | :05:43. | :05:49. | |
wanted to have a variety of energy sources. And that, I think, was the | :05:49. | :05:53. | |
right thing to do because nobody else was doing it at the time. | :05:53. | :05:58. | |
with respect, it didn't work. BP has pulled out a solar energy, it | :05:58. | :06:03. | |
is pulling out of wind energy in the US. It is going into those | :06:03. | :06:06. | |
Canadian tar sands, some of the most polluting oil production | :06:06. | :06:10. | |
facilities in the world. The peak has essentially made a series of U- | :06:10. | :06:18. | |
turns since he quit. -- the company. If I may, it is not the world. I | :06:18. | :06:22. | |
always thought BP was a very important company. But many people | :06:22. | :06:26. | |
are doing different things that they were not to win the 1997. We | :06:26. | :06:31. | |
have very large solar energy companies, wind energy companies, | :06:31. | :06:36. | |
very large biogas companies. I know that because that is what I now do | :06:36. | :06:42. | |
with part of my life. Speciality, if you will. Speciality following | :06:42. | :06:48. | |
specialisms in the industry. Interesting answer. We will follow | :06:48. | :06:51. | |
renewables further later on but in terms of BP, it is important to | :06:51. | :06:56. | |
nail this because it is such an important company not just in the | :06:56. | :06:59. | |
UK but around the world. Are you saying they are misguided in | :06:59. | :07:05. | |
second-guessing the strategy you put forward? Not at all. Facts and | :07:05. | :07:10. | |
certainties -- circumstances change. When they change, strategies change. | :07:10. | :07:15. | |
Hang on, you were against Tas and exploitation, for example. As the | :07:15. | :07:20. | |
chief executive of the company, if you were still running it, when you | :07:20. | :07:25. | |
will we do not go into car sounds? When I was running it, it was very | :07:26. | :07:29. | |
clear that there were better choices to be made that were | :07:29. | :07:34. | |
cheaper and at less risk of being unsustainable in the long-term. If | :07:34. | :07:37. | |
there are different choices to be made, you should be interviewing | :07:37. | :07:45. | |
the present chief executive of BP. You sit here as the major financier | :07:45. | :07:50. | |
-- major executive of a financier. Ethically as well as commercially, | :07:50. | :07:55. | |
would you be interested in putting money in to a project like that | :07:55. | :07:59. | |
today? Hypothetically because we have not done so, we would think | :07:59. | :08:05. | |
about it. You would have no ethical problem with it in terms of your | :08:05. | :08:10. | |
perspective on climate change? That if the sums add up, go for it? | :08:10. | :08:16. | |
the end of, you only do business that can last. If we think it will | :08:16. | :08:21. | |
not last and I think some of us won't, we may get to the point | :08:21. | :08:24. | |
where some of this production may never be made because we may not | :08:25. | :08:29. | |
need it in the way that is being conceived at the moment, then we | :08:29. | :08:35. | |
would not going. I want to tap into your experience in one of the area | :08:35. | :08:38. | |
before we get on to the future and what you're doing now and will take | :08:38. | :08:43. | |
on the energy mix and the world economy going forward. One other | :08:43. | :08:47. | |
aspect of leadership at the company and that concerns the balance | :08:47. | :08:51. | |
between pushing the boundaries of technology and exploration and | :08:52. | :08:58. | |
always maintaining a commitment to safety. Environmental safety and | :08:58. | :09:04. | |
worker safety. Do you think you got that balance right? I think we got | :09:04. | :09:09. | |
the balance to an extent right. There was one big event when I was | :09:09. | :09:12. | |
the chief executive, which was the terrible accident at Texas City, | :09:12. | :09:17. | |
which killed 15 people. And we learned from that day onwards that | :09:17. | :09:24. | |
what we have to do to understand how to avoid small events that | :09:24. | :09:29. | |
might lead to very large consequences. Today, they call them | :09:29. | :09:35. | |
Black Swan events or a thick tail risk. That is where I was mostly | :09:35. | :09:40. | |
focused for the last couple of years. It was not a Black Swan | :09:40. | :09:45. | |
event, Texas city, was it? If one looks at the record, which I have | :09:45. | :09:49. | |
done, there were orders that your company commissioned that talked of | :09:49. | :09:55. | |
an intolerable risk situation. may, people did not understand the | :09:55. | :09:59. | |
implications of the small events, the some of which... four people | :09:59. | :10:05. | |
died in that plant the year before it blew up. Terrible. I realise | :10:05. | :10:12. | |
that. But there were events that we did not fully understand. I am very | :10:13. | :10:16. | |
concerned about that. There were so many different things to look at | :10:16. | :10:21. | |
and different ways of explaining Texas city. We could catalogue them | :10:21. | :10:25. | |
but it will not be worthwhile. The point is that we learned a | :10:25. | :10:30. | |
tremendous amount from that. reason I wanted to go into that | :10:30. | :10:34. | |
with you some what is that it seems to me that people around the world | :10:34. | :10:38. | |
watching this will be asking a question - should I place my trust | :10:38. | :10:43. | |
in the big oil companies today given their record over decades? Is | :10:43. | :10:47. | |
there any reason as they push the boundaries of exploration, whether | :10:47. | :10:52. | |
it is in deep waters of the Gulf of Mexico, offshore in the Arctic, is | :10:52. | :10:55. | |
there any reason we should give them the benefit of the doubt when | :10:55. | :11:00. | |
it comes to their commitment to safety and security of the | :11:00. | :11:03. | |
Environment? Do you think the industry deserves the benefit of | :11:03. | :11:09. | |
the doubt? Yes, I do, much like any other industry. Things are more | :11:09. | :11:15. | |
challenging. People want to do more. The technology allows us to do more. | :11:16. | :11:20. | |
Small events create a very big consequences. The same is true with | :11:20. | :11:23. | |
the nuclear industry and the food industry, tracking whether or not | :11:23. | :11:29. | |
people are eating what is on the label. The scaling of activity, the | :11:29. | :11:33. | |
pushing of boundaries, that means there are risks. It is up to people | :11:33. | :11:38. | |
to look at companies to say if they have the systems in place to reduce | :11:38. | :11:44. | |
those risks. That is a very, very important thing to look at. Yes. | :11:44. | :11:49. | |
Texas city. Then the fund a horse platform that nearly sank. The | :11:49. | :11:54. | |
pipeline link in Alaska. All on your watch. And then, not connected | :11:54. | :11:59. | |
with you at all, we also had Deepwater Horizon. For BP in | :11:59. | :12:04. | |
particular, the last decade has been pretty disastrous. And I just | :12:04. | :12:07. | |
wonder when you express confidence in the ability of the industry to | :12:07. | :12:13. | |
get this calibration right, why you have this confidence. Partly | :12:13. | :12:17. | |
because people learn from the tragedies of for the past. Do they | :12:17. | :12:22. | |
really? I have given you a list and they still seem to be happening. | :12:22. | :12:28. | |
think that they do, generally. They do, generally. I know that people | :12:28. | :12:32. | |
try and learn internally. But I think that one has to look out the | :12:33. | :12:36. | |
complexity of life today and say that actually, it is all very | :12:36. | :12:41. | |
complicated and we need great people, great systems, great | :12:41. | :12:46. | |
learning, and still it is the case that we worry. In the case of | :12:46. | :12:50. | |
nuclear energy, for example, interestingly, people are terrified | :12:50. | :12:55. | |
of nuclear energy but statistically, it is one of the safest, if not the | :12:55. | :13:00. | |
safest, form of energy in the world. But people do read it because of | :13:00. | :13:06. | |
the possibility of extraordinary consequences. -- read it. Quite | :13:06. | :13:09. | |
right and the Fukushima nuclear plant told us that. As the | :13:09. | :13:12. | |
threshold is pushed in the oil industry as well, you are reaching | :13:12. | :13:15. | |
a point when the next major disaster might be very difficult | :13:15. | :13:22. | |
for the whole industry to cover. Andrew George, who works for a big | :13:22. | :13:26. | |
insurance broker, says that we are facing this landscape in the fossil | :13:26. | :13:30. | |
fuel business that is perhaps the most challenging in the history of | :13:30. | :13:35. | |
this industry. That I am sure about because people are getting more and | :13:35. | :13:40. | |
more complex and more and more difficult because we are at the | :13:40. | :13:43. | |
boundary. For give me for interrupting but other parts of the | :13:43. | :13:47. | |
world you would not undertake exploration in because the risks | :13:47. | :13:51. | |
are so high? For it would depend on who I am and how much technology I | :13:51. | :13:55. | |
have and the nature of the people I have and whether I felt they really | :13:55. | :13:59. | |
understood what they were doing. There are plenty of cases where the | :13:59. | :14:04. | |
risks are too high. Deepwater is one of them. One final thought on | :14:04. | :14:09. | |
the past. Russia. It fascinates me that you have such a story to tell | :14:09. | :14:14. | |
about your business links with Russia. You're the man at BP who | :14:14. | :14:19. | |
took the company into Russia in a big way. In 2003, you signed that | :14:19. | :14:24. | |
symbolic agreement with tea and cake, the biggest investor in the | :14:24. | :14:29. | |
entire country. And it all went wrong. It ended in acrimony, court | :14:29. | :14:33. | |
cases. Bob Dudley was lucky to get out of the country without facing | :14:33. | :14:39. | |
prison. Do you think you got Vladimir Putin's Russia run as | :14:39. | :14:49. | |
:14:49. | :14:59. | ||
It became a regarded as one of the best oil companies in Russia. | :14:59. | :15:06. | |
Increasing production, creating new jobs, having better people but it | :15:06. | :15:13. | |
in the end, it lived its life and it started at small and finished be. | :15:13. | :15:20. | |
BP gained a tremendous amount of value from it. Would you go back to | :15:20. | :15:28. | |
Russia? I read if you have been wooed? I AM and wooed by lots of | :15:28. | :15:34. | |
people. To do business in Russia if you need to be like BP. You need a | :15:34. | :15:41. | |
thick skin. It is not long ago we had William, a big fund manager in | :15:41. | :15:48. | |
Moscow, who fell foul -- fell foul of the Russian authorities and he | :15:48. | :15:55. | |
said it he warned to steer Clear off Vladimir Putin's Russia. I was | :15:55. | :16:01. | |
there some time ago. Provided you were doing things which will pure | :16:01. | :16:06. | |
and simple, for the best that of Russia and your benefit, and you | :16:07. | :16:11. | |
never changed strategy, you can get things done. That is exactly what | :16:11. | :16:16. | |
with it. We got things done in a way which we're quite proud. | :16:16. | :16:25. | |
you ever compromised ethically? I find that surprising given what | :16:25. | :16:31. | |
we know about the way business is done. We ran business with a set of | :16:31. | :16:36. | |
rules and ran up clearly and simply. Whether or not people around us | :16:36. | :16:41. | |
were breaking rules, that I do not know but as far as BP was concerned, | :16:41. | :16:47. | |
we ran it in a very at the Galway. I promise I want to talk about the | :16:47. | :16:54. | |
future as well as the past. The way you left BP in at 2007. You now | :16:54. | :16:58. | |
work with private equity funds looking at the energy business and | :16:58. | :17:05. | |
opportunities. One such opportunity you are excited about his fracking. | :17:05. | :17:11. | |
The hydraulic fracturing prices which can lead to enormous | :17:11. | :17:16. | |
resources of gas being unlocked. Do you believe that he's a game | :17:16. | :17:21. | |
changer or as we discuss the future of the energy business? I do not | :17:21. | :17:26. | |
have to believe march. I just have to look at what is happening in | :17:26. | :17:31. | |
America and, indeed, it has changed the game in America. Seven years | :17:31. | :17:37. | |
ago, most people thought that America would run out of natural | :17:37. | :17:40. | |
gas and would have to import liquified gas from places like | :17:40. | :17:48. | |
Nigeria. That has not happen. Plenty of people built terminals to | :17:48. | :17:53. | |
receive this gas which I'm not going to be used. The reason for | :17:53. | :17:58. | |
that is the impact of hydraulic fracturing initial rock and the | :17:58. | :18:02. | |
production of gas. He now represents 30% of the gas | :18:02. | :18:07. | |
production of the US. It will probably rise. It has unlocked a | :18:07. | :18:14. | |
huge amount of reserve all-over the US. That was brought not by modern | :18:14. | :18:21. | |
technology. Fracking, again, I point out in marble, was invented | :18:21. | :18:25. | |
just after the American Civil War by Colonel Robert. It was a | :18:25. | :18:32. | |
combination of things that allow things to open up. One a great | :18:32. | :18:35. | |
entrepreneur and drove it until it was successful. You talk about the | :18:35. | :18:40. | |
book and in the book you acknowledge the fossil fuel | :18:40. | :18:48. | |
industry will eventually die, not because we run out of fossil fuel | :18:48. | :18:54. | |
but because the price context, demand, or technology, will move on. | :18:54. | :18:58. | |
That's right. So why not acknowledge, and given the | :18:59. | :19:02. | |
conversation earlier about climate change and your concerns about it, | :19:02. | :19:08. | |
acknowledge that it would be very wise to take a decision to leave a | :19:08. | :19:12. | |
significant reserves of fossil fuel, including these shall gases in the | :19:12. | :19:17. | |
ground and concentrate on a renewables, on and on carbon-based | :19:17. | :19:21. | |
fuels that will give us a clean future? Because it probably will | :19:21. | :19:26. | |
not happen like that. If you leave gas in the ground in one country, | :19:26. | :19:32. | |
it will come from another country or, worse, or call will be burned | :19:32. | :19:37. | |
instead. That is simply a counsel of despair. We are trying to win | :19:37. | :19:42. | |
this battle against man-made emissions. So we might as well just | :19:42. | :19:45. | |
make money while we can. I believe that to be wrong. You can replace | :19:45. | :19:53. | |
the heavier, more heavy carbon fuels with lighter carbon and are | :19:53. | :20:00. | |
so gas will make a big difference as we go for what, lightening the | :20:01. | :20:05. | |
load of a CO2 produce into the atmosphere. That is your conviction. | :20:05. | :20:10. | |
You Gerrick company in the UK called Craig Treloar which wants to | :20:10. | :20:15. | |
push the technology forward inside the United Kingdom. You have a big | :20:15. | :20:19. | |
problem because in north-west England, we have an exploration | :20:19. | :20:24. | |
site and in the south of England, local communities simply do not | :20:24. | :20:32. | |
want heat. That is not wholly clear. The local communities wanted under | :20:32. | :20:36. | |
certain circumstances. Well, I do not know how many public meetings | :20:36. | :20:44. | |
you have been to but one protester I saw said you were basically | :20:44. | :20:47. | |
trying to industrialise England's rural landscape and many others | :20:47. | :20:53. | |
seem to feel the same way. I read the same quote. Surveys of the | :20:53. | :21:00. | |
local population, particularly around Preston,... In the north- | :21:00. | :21:09. | |
west where you already have subtly in plays but you had to suspend | :21:09. | :21:14. | |
operations because of tremors... had to understand what was going on | :21:14. | :21:19. | |
and stop it from happening again. It is a matter of doing things in | :21:19. | :21:23. | |
the right way. This will be beneficial for communities. It is | :21:23. | :21:28. | |
something that can be done that has not impact communities in a very | :21:28. | :21:33. | |
bad and disturbing for destructive way. Have you seen the film, Gas | :21:33. | :21:41. | |
land. The director claims 65 of the compounds used in fracking a | :21:41. | :21:46. | |
significantly hazardous to human health. You except that? You can do | :21:46. | :21:49. | |
fracking with different to what and you can do it with very benign | :21:49. | :21:55. | |
additives. That is where people are today. We have very clear that when | :21:55. | :21:59. | |
we do this activity, we announce exactly what we are put inside the | :21:59. | :22:05. | |
rocks and what is coming back. you a rational optimism about the | :22:05. | :22:11. | |
future? It strikes me you have been on a real journey from beyond | :22:11. | :22:16. | |
Petroleum and complete rebranding BP as a Green company. Ewen now | :22:16. | :22:21. | |
keen to make money out of different fossil fuel projects. Not at all. | :22:21. | :22:24. | |
At pinger have a balanced view of what is practical and what is | :22:24. | :22:29. | |
needed to get from here to there. We cannot abandon today's | :22:29. | :22:33. | |
activities for the sake of an uncertain future and equally we | :22:33. | :22:37. | |
cannot let go up of the great new of the future by saying, well, we | :22:37. | :22:42. | |
will just carry on what we were doing. It seems to me, necessity | :22:42. | :22:48. | |
has changed things a lot. It has opened up brand new Vestas in gas. | :22:48. | :22:53. | |
Gas is better than coal. We have understood more about deficiencies | :22:53. | :22:58. | |
of energy. Cars now to double the mileage than they used to do 15 | :22:58. | :23:04. | |
years ago. People use less electricity and television students, | :23:04. | :23:08. | |
in lighting, in houses - all these things are changing dramatically | :23:08. | :23:12. | |
the way in which we think about energy and its impact on the | :23:12. | :23:17. | |
environment. I come back to the rational optimists - it was coined | :23:17. | :23:23. | |
by Matt Ridley who believed in the end, technology will come up trumps | :23:23. | :23:29. | |
even if we do not know how the climate change conundrum can be | :23:29. | :23:34. | |
sold, future generations will do it for Russ. Is that mentality good | :23:34. | :23:43. | |
enough? Technology will create a new future. Thomas... We should put | :23:43. | :23:48. | |
a stake through his heart. We think we're going to run out of resources, | :23:48. | :23:53. | |
not true. Again, in my book I talk about the elements that have made a | :23:53. | :23:57. | |
difference - silicon, little bits of sand now create everything that | :23:57. | :24:01. | |
we do. All the communication technology as well as great mirrors | :24:01. | :24:08. | |
and things like that. It is all these things are created by humans | :24:08. | :24:12. | |
need to advance, to do something different, to answer the question | :24:12. | :24:18. |