bp CEO Defends Oil and Gas Investment

The energy giant also announces a major green-energy initiative in Spain.

March 02, 2023

ALEXANDRIA, Va.—bp CEO Bernard Looney made the case that investing in more oil and gas is crucial for the transition away from those very fuels at London’s International Energy Week, Bloomberg reports.

“Reducing supply without also reducing demand inevitably leads to price spikes, price spikes lead to economic volatility, and there’s a risk that volatility will undermine popular support for the transition. We avoid that outcome by investing in today’s energy system, as well as investing in the transition.”

Earlier in February, bp announced that it would slow its retreat from oil.

“For the first time last year, investment in clean energy matched funding for fossil fuels, according to BloombergNEF. Still, the world is far behind a trajectory of emissions cuts that would enable it to reach the goals set out in the 2015 Paris climate agreement and prevent the worst impacts of global warming. The use of oil and gas will need to decline in order to get on track,” Bloomberg reported.

Separately, bp announced that it launched the green hydrogen cluster of the Valencia region (HyVal) at its Castellón refinery in Spain. Led by bp, this public-private collaborative initiative is based around the phased development of up to 2GW of electrolysis capacity by 2030 for producing green hydrogen at bp’s refinery.

HyVal is expected to play an instrumental role in decarbonizing the operations of bp’s Castellón refinery. Its transformation—including green hydrogen, biofuels and renewable energy—could see bp invest a total of up to 2 billion euros ($2.12 billion) in Castellon by 2030.

Green hydrogen—generated by the electrolysis of water using renewable power—will support decarbonization of the refinery’s operations, replacing its current use of grey hydrogen generated from natural gas.

Its production of biofuels is expected to increase threefold, to 650,000 tons a year by 2030. Green hydrogen will also be used as a feedstock in biofuel production, specifically of sustainable aviation fuel (SAF).

In addition to being used by bp at the refinery, the green hydrogen produced will also be used in key hard-to-abate industries in the Valencia region, such as the ceramic industry, replacing the natural gas used in their processes.

"The production of green hydrogen will be another step in strategic energy autonomy for Spain and more widely for Europe,” said Carolina Mesa, bp’s vice president hydrogen, Spain and new markets.