One bad apple spoils the barrel – of oil?June 13, 2008 at 5:21 am | Posted in Climate change, Energy, Environment | Leave a comment
Tags: BP, BP Statistical Review of World Energy 2008, Climate change, Data, Energy, Global, Reviews
At the presentation for the launch of the BP Statistical Review of World Energy 2008 on Wednesday 11 June 2008 we were treated to some analogies by BP’s Chief Economist, Christof Rühl, to help explain the world in familiar terms to non-economists like myself.
One of the examples he used to illustrate the BP collection of data included a reference to “apples—some good, some bad”, with the presenter emphasising BP was “not introducing (its) own biases” but takes the data it is given by those “who have the authority and responsibility to report” those figures.
This raises a question for someone in my position—not knowing which apples are bad and which are good in the first place, and then wondering why the bad apples are not discarded (by those who know) before they contaminate the rest of the barrel:
How do I know how much of the data to trust if good and bad are mixed together?
This concern pops up in various guises, time and time again. No surprises there. On Wednesday, Jeremy Leggett, was in the audience and raised it in the context of assessing peak oil. In fact, it was his question that prompted the ‘good apple / bad apple’ response from the lead author of BP’s Review.
During Q&A, Jeremy began by drawing our attention to this statement on the inside front cover of the BP Statistical Review of World Energy 2008:
The data series for proved oil and gas reserves in BP Statistical Review of World Energy June 2008 does not necessarily meet the definitions, guidelines and practices used for determining proved reserves at company level, for instance, under UK accounting rules contained in the Statement of Recommended Practice, ‘Accounting for Oil and Gas Exploration, Development, Production and Decommissioning Activities’ (UKSORP) or as published by the US Securities and Exchange Commission, nor does it necessarily represent BP’s view of proved reserves by country. Rather, the data series has been compiled using a combination of primary official sources and third-party data.
In brief, I’d sum this up in English as:
Disclaimer: All content is for informational purposes only.
This point serves as a reminder that there is a degree of uncertainty expressed in the Review, as usual. So, acknowledging that, Jeremy Leggett asked the Lead Author “to give us some feeling for the bounds of that uncertainty” … and has written about his concerns in today’s Guardian Comment is free:
Spoiling the barrel
BP’s review of global reserves is tainted by ‘political’ oil, and distorts our view of future supply
From my own trivial experience in collecting data from others and reporting on it, I sympathise (to some extent) with BP’s position. As long as the annual Review launch is appreciated, first and foremost, as a PR exercise undertaken by BP to introduce its professionally produced report “as one of the most reliable sources for objective energy data worldwide” as Tony Hayward writes, that’s fine by me.
However, the way the BP Statistical Review of World Energy 2008 is presented to the public, via the FT, strikes me as a little disingenuous, not least in terms of the illusory tricks used to project the industry’s degree of commitment to combat climate change, as you can read in the tail end of this piece:
Let the markets solve the energy crisis
By Tony Hayward, Chief Executive of BP
Published: June 10 2008
Myth number three is that we can switch quickly to a low-carbon economy. While biofuels, wind and solar energy are growing rapidly, they comprise a tiny share – less than 2 per cent – of global energy production. Humankind remains dependent on fossil fuels and coal is the fastest-growing of all the main fuel types. Carbon emissions continue to rise. We clearly all need to work harder if we are to tackle the threat of climate change.1
So how are we to secure the energy needs of the world in the 21st century? The evidence is that where markets are allowed to operate, they do work. That is what the data in the review show. And that is the real source of hope for the future. Consumers in Europe and north America are already responding to high prices by moderating demand. They are also beginning to embrace energy efficiency. Where investment is allowed to take place, energy production responds positively. Last year, US oil and natural gas production increased – in thecase of oil, for the first time since 1991.
The conclusion is therefore simple. Producers and consumers should be encouraged to respond to the market’s signals. High prices are saying that we need more investment – in energy efficiency, new production, new technology and new energy sources such as wind, solar and nuclear.2
In order for that to happen, businesses and governments must act together. Companies know that they need to invest more, which is why BP and its peers have been raising capital expenditure substantially. But governments must do their bit too, by removing the barriers to that investment, improving access to resources and modernising the tax structures we work in.
In the two examples dressed in green above:
- 1. can be taken to mean business-as-usual is a given: it is our focus, while climate change remains a future problem for all to address [BP must try harder – Ed.]
- 2. can be read in the context of an alternative mindset as a call to green arms [how did nuclear get in that list of new energy sources? – Ed.]
Both climate positive action points were far from what we heard in BP’s auditorium, naturally. The persuasive opinion piece in the FT was written for general public consumption, with the addition of emotive hooks—not listed here, but they are clear and balanced (!) with sensible, objective advice in the second paragraph if you care to visit the full FT article—and politically correct greenwashing required for that printed public environment.