In an attempt to stay relevant in the low carbon economy of the future, some leading oil and gas stakeholders have been ramping up their investments in renewable energy. BP is among that group, and the company just sank $200 million into a major solar energy deal with the company Lightsource. The new investment is especially noteworthy for the sharp contrast it makes with BP's previous attempts to move "beyond petroleum."
Solar energy has gone mainstream since then, and the new BP investment in Lightsource is a case in point.
Lightsource already operates on three continents, and BP is describing the new investment as a "strategic partnership" that will drive the solar company's reach "across the world." Here's the rundown from BP:
"BP will acquire on completion a 43% equity share in Lightsource for a total consideration of $200 million, paid over three years. The great majority of this investment will fund Lightsource’s worldwide growth pipeline. The company will be renamed Lightsource BP and BP will have two seats on the board of directors."
Group CEO and founder of Lightsource Nick Boyle sums up the strategy:
"We founded Lightsource to lead the solar revolution and chose to partner with BP because, like us, their ambition is to build and grow this company for the long-term. Not only does this partnership make strategic sense, but our combined forces will be part of accelerating the low-carbon transition."
The Beyond Petroleum campaign failed. To be fair, low cost solar and wind technology were not widely available in the early 2000's. In addition, here in the US President Bush took office in 2001 and promptly made oil and gas development a priority. By the time President Obama began his first term in 2009, it was too late. BP's notoriously ham-handed response to the colossal 2010 Gulf of Mexico oil spill was the final nail in the coffin.
Just last year, the company's former BP CEO John Browne detailed the collapse of the Beyond Petroleum campaign in a new book, “Connect: How Companies Succeed by Engaging Radically with Society.”
For Browne, the main problem was that the company's intentions were running far ahead of public opinion and public policy. In addition, when the campaign was first formulated back in 1997, the technology was far from mainstream:
"In essence, the company had gotten ahead of itself and ahead of where industry and government were willing to go at that time. Beyond Petroleum was never meant to be literal – not yet, anyway – but there was still too much of a gap between the aspiration and reality, which I now regret."
BP has been committed to advancing lower-carbon energy for over 20 years and we’re excited to be coming back to solar, but in a new and very different way. While our history in the solar industry was centered on manufacturing panels, Lightsource BP will instead grow value through developing and managing major solar projects around the world.
Controversy aside, last September BP announced a new joint venture with Argentina-based Bridas (and 50% China-owned) Bridas corporation. As described by Reuters, the new venture retains BP's holdings in the oil producer Pan American Energy and the refiner and fuel retailer Axion Energy, which is a partner in Pan American and owner of Bridas.
Got all that? According to Reuters, on the Pan American side the venture includes 262,000 barrels of oil equivalent per day and holdings in "sought-after" Vaca Muerta shale fields, a major oil and gas producing region. On Axion's side, it includes a refinery with a capacity of 90,000 barrels per day, and more than 755 retail sites in South America.
Reuters cites a statement from Dudley indicating that BP may be ready to take another shot at solar energy but it still isn't ready to go beyond petroleum -- yet:
"We see value-enhancing opportunities throughout PAEG’s businesses; from extending the life of mature production and developing new unconventional resources including Vaca Muerta to growth in retail fuels and lubricants marketing . . . "
Photo: Mike Mozart/flickr.
Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.