Ever heard of Lord John Browne, Baron Browne of Madringly?
In May, 2007, Lord Browne abruptly resigned as CEO of the oil company BP, after he was outed by a tabloid newspaper. With tales of a greedy lover juicing up the media, he decided to throw in the towel. It cost him $30 million in stock options and retirement benefits.
Up to that point, John Browne had been a company man, a lifer, who joined BP in 1966 as an apprentice and worked his way to the top. He was there when British Petroleum became BP, and turned the company into the fourth largest corporation in the world. He stayed out of the limelight, partly to hide the fact that he was gay.
Although professionally respected, Browne was privately the butt of jokes and speculation. He was small in stature, and employees who didn’t like him nicknamed him “elf,” short for evil little f_____.
He was also ridiculed by peers — for embracing climate change.
At a time when other executives called global warming a hoax, he rebranded BP as “Beyond Petroleum,” supported the Kyoto climate treaty, vowed to cut BP’s greenhouse gas emissions by 10%, and invested $500 million in solar power.
Environmentalists were skeptical, saying BP’s green makeover was a cover for an unflattering environmental track record. The $500 million dedicated to solar power, for instance, was dwarfed by the $8.4 billion spent in 2004 for oil exploration and production. The company joined those who lobbied hard to open the Arctic National Wildlife Refuge to drilling.
Instead of pretending to go green, said others, Browne should have been paying more attention to maintenance.
Above, 2005 explosion at a BP Texas refinery, killing 15 and injuring 170. Also under Browne’s watch: 2006 pipeline failure Prudhoe Bay, which spilled millions of gallons of oil.
BP’s stock value sank. John Browne was exposed, and eased out.
Oil executives were by then acknowledging that the cheap and easy oil was gone, but they weren’t interested in wind and solar. The consensus was that demand would rise ad infinitum, and that the smartest thing to do was invest heavily in the oil that is difficult, dangerous and dirty to extract. Browne’s successor at BP, Tony Hayward, doubled down on fracking, tar sands extraction and deep water drilling.
Meanwhile, John Browne moved on with the same vigor he’d demonstrated at BP. He encouraged gay entrepreneurs and published a book, The Glass Closet. He was knighted by Queen Elizabeth, installed as President of the Royal Academy of Engineering. He kept his hand in the oil business too.
Fast forward to 2015.
The bet on dirty oil was wildly successful. World oil production rose from 85.1 million barrels per day in 2005 to 92.9 million in 2014, and profits were, for awhile, staggering.
But — surprise. Prices today are half what they were a year ago, and may not rise again anytime soon. Energy Information Administration (E.I.A.) predicts “slower demand will continue for the next decade.” One of the reasons? People everywhere are waking up to the threat posed by climate change.
Oil companies have laid off workers. Shell dropped plans for a petrochemical plant in Qatar. Chevron set aside a proposal to to drill in the Arctic seas. Norway’s Statoil changed its mind about drilling in Greenland.
Of course, this could all change if prices climb again. Still, we have a pause, a breather in the mad dash for oil.
And Lord Browne? Whether or not he was serious in 1999, he’s still sounding the alarm about global warming. Climate science is settled, he recently declared, but “this conclusion is not accepted by many in our industry, because they do not want to acknowledge an existential threat to their business.”
The battles continue. Old school oil executives vilify Browne, as do environmentalists, but my, how things have changed.
Eight years ago, one of the most powerful executives on the planet was trying to hide his sexual orientation, and climate change was mostly relegated to the back section of the papers. Now executives, congressmen and sports stars are proudly coming out; and climate change has moved from the back to the front pages. The world oil market is flooded, partly because — who would have guessed? — demand has slowed.
Is John Browne courageous or opportunistic? Does it matter? More important: Are we finally ready to begin the painful process of weaning ourselves from oil?