[Congressional Record Volume 143, Number 70 (Friday, May 23, 1997)]
[Extensions of Remarks]
[Pages E1055-E1058]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         GLOBAL CLIMATE CHANGE

                                 ______
                                 

                             HON. VIC FAZIO

                             of california

                    in the house of representatives

                         Thursday, May 22, 1997

  Mr. FAZIO. Mr. Speaker, complex issues take not only courage but 
discipline and foresight to address. Global climate change is such an 
issue. While no one knows the precise answers, we do know the fragility 
of the environment around us and the importance of embarking on the 
journey to find those answers. It is in that spirit that the chief 
executive of British Petroleum, E. John Browne addressed global climate 
change in a speech this week at Stanford University in California.
  Mr. Browne took a bold step in asserting that because the possibility 
that a link exists between human activity and climate change, that in 
fact we need to consider solutions now--while we have time to 
responsibly act. Mr. Browne's speech is grounded in reason. It provides 
a framework for moving forward in a constructive fashion on global 
climate change. His is a refreshing approach to a sometimes politically 
contentious, sometimes emotional, but always a fundamentally serious 
topic that affects humankind.
  I commend Mr. Browne's speech to my colleagues in the U.S. Congress.

                             Climate Change

       Dean Spence, Ladies and Gentlemen, good morning.
       It is always marvelous to come back to Stanford . . . and 
     it is a pleasure . . . and a privilege to be here to speak to 
     you today on a subject which I believe is of the utmost 
     importance.
       I can't think of anywhere better than Stanford to discuss 
     in a calm and rational way a subject which raises great 
     emotion and which requires both analysis and action.
       I think it's right to start by setting my comments in 
     context.
       Following the collapse of Communism in Europe and the fall 
     of the Soviet Empire at the end of the 1980s, two alternative 
     views of the consequences for the rest of the world were put 
     forward.
       Francis Fukuyama wrote a book with the ironic title ``The 
     End of History''. Jacques Delors, then President of the 
     European Commission, talked about the ``Acceleration of 
     History''.
       In the event, history has neither accelerated nor stopped. 
     But it has changed.
       The world in which we now live is one no longer defined by 
     ideology. Of course, the old spectrums are still with us . . 
     . of left to right . . . of radical to conservative, but 
     ideology is no longer the ultimate arbiter of analysis and 
     action,.
       Governments, corporations and individual citizens have all 
     had to redefine their roles in a society no longer divided by 
     an Iron Curtain separating Capitalism from Communism.
       A new age demands a fresh perspective of the nature of 
     society and responsibility.
       The passing of some of the old divisions reminds us we are 
     all citizens of one world, and we must take shared 
     responsibility for its future, and for its sustainable 
     development.
       We must do that in all our various roles . . . as students 
     and teachers, as business people with capital to invest, as 
     legislators with the power to make law . . . as individual 
     citizens with the right to vote . . . and as consumers with 
     the power of choice.
       These roles overlap, of course. The people who work in BP 
     are certainly business people, but they're also people with 
     beliefs and convictions . . . individuals concerned with the 
     quality of life for themselves and for their children.
       When they come through the door into work every morning 
     they don't leave behind their convictions and their sense of 
     responsibility.
       And the same applies to our consumers. Their choices 
     determine our success as a company. And they too have beliefs 
     and convictions.
       Now that brings us to my subject today--the global 
     environment.
       That is a subject which concerns us all--in all our various 
     roles and capacities.
       I believe we've now come to an important moment in our 
     consideration of the environment.
       It is a moment when because of the shared interest I talked 
     about, we need to go beyond analysis to seek solutions and to 
     take action. It is a moment for change and for a rethinking 
     of corporate responsibility.
       A year ago, the Second Report of the Inter-Governmental 
     Panel on Climate Change was published. That report and the 
     discussion which has continued since its publication, shows 
     that there is mounting concern about two stark facts.
       The concentration of carbon dioxide in the atmosphere is 
     rising, and the temperature of the earth's surface is 
     increasing.
       Karl Popper once described all science as being 
     provisional. What he meant by that was that all science is 
     open to refutation, to amendment and to development.
       That view is certainly confirmed by the debate around 
     climate change.
       There's a lot of noise in the data. It is hard to isolate 
     cause and effect. But there is now an effective consensus 
     among the world's leading scientists and serious and well 
     informed people outside the scientific community that there 
     is a discernible human influence on the climate, and a link 
     between the concentration of carbon dioxide and the increase 
     in temperature.
       The prediction of the IPCC is that over the next century 
     temperatures might rise by a further 1 to 3.5 degrees 
     centigrade, and that sea levels might rise by between 15 and 
     95 centimeters. Some of that impact is probably unavoidable, 
     because it results from current emissions.
       Those are wide margins of error, and there remain large 
     elements of uncertainty--about cause and effect . . . and 
     even more importantly about the consequences.
       But it would be unwise and potentially dangerous to ignore 
     the mounting concern.
       The time to consider the policy dimensions of climate 
     change is not when the link between greenhouse gases and 
     climate change is conclusively proven . . . but when the 
     possibility cannot be discounted and is taken seriously by 
     the society of which we are part.
       We in BP have reached that point.
       It is an important moment for us. A moment when analysis 
     demonstrates the need for action and solutions.
       To be absolutely clear--we must now focus on what can and 
     what should be done, not because we can be certain climate 
     change is

[[Page E1056]]

     happening, but because the possibility can't be ignored.
       If we are all to take responsibility for the future of our 
     planet, then it falls to us to begin to take precautionary 
     action now.
       But what sort of action? How should we respond to this 
     mixture of concern and uncertainty?
       I think the right metaphor for the process is a journey.
       Governments have started on that journey. The Rio 
     Conference marked an important point on that journey. So was 
     the Berlin review meeting. The Kyoto Conference scheduled for 
     the end of this year marks another staging post.
       It will be a long journey because the responsibilities 
     faced by governments are complex, and the interests of their 
     economies and peoples are diverse, and sometimes 
     contradictory. But the journey has begun, and has to 
     continue.
       The private sector has also embarked upon the journey . . . 
     but now that involvement needs to be accelerated.
       This too will be long and complex, with different people 
     taking different approaches. But it is a journey that must 
     proceed.
       As I see it, there are two kinds of actions that can be 
     taken in response to the challenge of climate change.
       The first kind of action would be dramatic, sudden and 
     surely wrong. Actions which sought, at a stroke, drastically 
     to restrict carbon emissions or even to ban the use of fossil 
     fuels would be unsustainable because they would crash into 
     the realities of economic growth. They would also be seen as 
     discriminatory above all in the developing world.
       The second kind of action is that of a journey taken in 
     partnership by all those involved. A step by step process 
     involving both action to develop solutions and continuing 
     research that will build knowledge through experience.
       BP is committed to this second approach, which matches the 
     agreement reached at Rio based on a balance between the needs 
     of development and environmental protection. The Rio 
     agreements recognise the need for economic development in the 
     developing world. We believe we can contribute to achievement 
     of the right balance by ensuring that we apply the technical 
     innovations we're making on a common basis--everywhere in the 
     world.
       What we propose to do is sustantial, real and measurable. I 
     believe it will make a difference.
       Before defining that action I think it is worth 
     establishing a factual basis from which we can work.
       Of the world's total carbon dioxide emissions only a small 
     fraction comes from the activities of human beings, but it is 
     that small fraction which might threaten the equilibrium 
     between the much greater flows.
       You could think of it as the impact of placing even a small 
     weight on a weighscale which is precisely balanced.
       But in preserving the balance we have to be clear where the 
     problem actually lies.
       Of the total carbon dioxide emissions caused by burning 
     fossil fuels only 20% comes from transportation.
       80% comes from static uses of energy--the energy used in 
     our homes, in industry and in power generation. Of the total 
     43 per cent comes from petroleum.
       We've looked carefully using the best available data at the 
     precise impact of our own activities.
       Our operations--in exploration and in refining--produce 
     around 8 megatonnes of carbon.
       On top of that a further 1 megatonne is produced by our 
     Chemical operations. If you add to that the carbon produced 
     by the consumption of the products we produce--the total goes 
     up to around 95 megatonnes.
       That is just one per cent of the total carbon dioxide 
     emissions which come from all human activity.
       Let me put that another way--to be clear.
       Human activity accounts for a small part of the total 
     volume of emissions of carbon--but it is that part which cold 
     cause disequilibrium.
       Only a fraction of the total emissions come from the 
     transportation sector--so that problem is not just caused by 
     vehicles. Any response which is going to have a real impact 
     has to look at all the sources.
       As a company, our contribution is small, and our actions 
     alone could not resolve the problem.
       But that does not mean we should do nothing.
       We have to look at both the way we use energy . . . to 
     ensure we are working with maximum efficiency . . . and at 
     how our products are used.
       That means ensuring or own house is in order. It also means 
     contributing to the wider analysis of the problem--through 
     research, technology and through engagement in the search for 
     the best public policy mechanisms--the actions which can 
     produce the right solutions for the long term common 
     interest.
       We have a responsibility to act, and I hope that through 
     our actions we can contribute to the much wider process which 
     is desirable and necessary.
       BP accepts that responsibility and we're therefore taking 
     some specifics steps. To control our own emissions. To fund 
     continuing scientific research. To take initiatives for joint 
     implementation. To develop alternative fuels for the long 
     term. And to contribute to the public policy debate in search 
     of the wider global answers to the problem.
       First we will monitor and control or our own carbon dioxide 
     emissions.
       This follows the commitment we've made in relation to other 
     environmental issues. Our overall goal is to do no harm or 
     damage to the natural environment. That's an ambitious goal 
     which we approach systematically.
       Nobody can do everything at once. Companies work by 
     prioritizing what they do. They take the easiest steps 
     first--picking the low hanging fruit--and then they move on 
     to tackle the more difficult and complex problems. That is 
     the natural business process.
       Our method has been to focus on one item at a time, to 
     identify what can be delivered, and to establish monitoring 
     processes and targets as part of our internal management 
     system and to put in place an external confirmation of 
     delivery.
       In most cases the approach has meant that we've been able 
     to go well beyond the regulatory requirements.
       That's what we've done with emissions to water and to air.
       In the North Sea, for instance, we've gone well beyond the 
     legal requirements in reducing oil discharges to the sea.
       And now at our crude oil export terminal in Scotland--at 
     Hound Point--which handles 10% of Europe's oil supplies--
     we're investing $100 m to eliminate emissions of volatile 
     organic compounds.
       These VOCs would themselves produce carbon dioxide by 
     oxidation in the atmosphere.
       No legislation has compelled us to take that step--we're 
     doing it because we believe it is the right thing to do.
       Now, as well as continuing our efforts in relation to the 
     other greenhouse gases, it is time to establish a similar 
     process for carbon dioxide.
       Our carbon dioxide emissions result from burning 
     hydrocarbon fuels to produce heat and power, from flaring 
     feed and product gases, and directly from the process of 
     separation or transformation.
       So far our approach to carbon dioxide has been indirect and 
     has mainly come through improvements in the energy efficiency 
     of our production processes. Over the last decade, efficiency 
     in our major manufacturing activities has improved by 20 
     percent.
       Now we want to go further.
       We have to continue to improve the efficiency with which we 
     use energy.
       And in addition we need a better understanding of how our 
     own emissions of carbon can be monitored and controlled, 
     using a variety of measures including sequestration. It is a 
     very simple business lesson that what gets measured gets 
     managed.
       It is a learning process--just as it has been with the 
     other emissions we've targeted but the learning is cumulative 
     and I think it will have a substantial impact.
       We have already taken some steps in the right direction.
       In Norway, for example, we've reduced flaring to less than 
     20 percent of 1991 levels, primarily as a result of very 
     simple, low cost measures.
       The operation there is now close to the technical minimum 
     flare rate which is dictated by safety considerations.
       Our experience in Norway is being transferred elsewhere--
     starting with fields in the UK sector of the North Sea and 
     that should produce further progressive reductions in 
     emissions.
       Our goal is to eliminate flaring except in emergencies.
       That is one specific goal within the set of targets which 
     we will establish.
       Some are straightforward matters of efficient operation--
     such as the reduction of flaring and venting.
       Others require the use of advanced technology in the form 
     of improved manufacturing and separation processes that 
     produce less waste and demand less energy.
       Other steps will require investment to make existing 
     facilities more energy efficient. For instance we're 
     researching ways in which we can remove the carbon dioxide 
     from large compressors and reinject it to improve oil 
     recovery. That would bring a double benefit--a cut in 
     emissions and an improvement in production efficiency.
       The task is particularly challenging in the refining sector 
     where the production of cleaner products require more 
     extensive processing and a higher energy demand for each unit 
     of output.
       That means that to make gasoline cleaner, with lower sulfur 
     levels, takes more energy at the manufacturing stage. That's 
     the trade off.
       In each case our aim will be to establish a data base, 
     including benchmark data; to create a monitoring process, and 
     the to develop targets for improvements through operational 
     line management.
       Monitoring and controlling emissions is one step.
       The second is to increase the level of support we give to 
     the continuing scientific work which is necessary.
       As I said a few moments ago, there are still areas of 
     significant uncertainty around the subject of climate change. 
     Those who tell you they know all the answers are fools or 
     knaves.
       More research is needed--on the detail of cause and effect; 
     on the consequences of what appears to be happening, and on 
     the effectiveness of the various actions which can be taken.
       We will increase our support for that work.
       That support will be focused on finding solutions and will 
     be directed to work of high quality which we believe can 
     address the key outstanding questions.

[[Page E1057]]

       Specifically, we've joined a partnership to design the 
     right technology strategy to deal with climate change. That 
     partnership which will work through the Batelle Institute 
     includes the Electric Power Research Institute and the U.S. 
     Department of Energy. We're also supporting work being done 
     at MIT in Cambridge and through the Royal Society in London.
       We're also joining the Greenhouse gas programme of the 
     International Energy Agency which is analysing technologies 
     for reducing and offsetting greenhouse gas emissions from 
     fossil fuels.
       The third area is the transfer of technology and the 
     process of joint implementation which is the technical term 
     for projects which bring different parties together to limit 
     and reduce net emission levels of greenhouse gases.
       Joint implementation is only in its infancy, but we believe 
     it has great potential to contribute to the resolution of the 
     climate change problem. It can increase the impact of 
     reduction technology by lowering the overall cost of 
     abatement actions.
       We need to experiment and to learn . . . and we'd welcome 
     further partners in the process. The aim of the learning 
     process must be to make joint implementation a viable and 
     legally creditable concept that can be included in 
     international commitments.
       We've begun by entering into some specific programmes of 
     reforestation and forest conservation programmes in Turkey 
     and now in Bolivia, and we're in discussion on a number of 
     other technology based joint implementation projects.
       The Bolivian example I think shows what can be done.
       It's a programme to conserve 1.5 million hectares of 
     forests in the province of Santa Cruz. It is sponsored by the 
     Nature Conservancy and American Electric Power and sanctioned 
     by the U.S. Government.
       We're delighted to be involved, and to have the chance to 
     transfer the learning from this project to others in which we 
     are involved. Forest conservation projects are not easy or 
     simple, and that learning process is very important.
       Technology transfer is part of the joint implementation 
     process but it should go wider and we're prepared to engage 
     in an open dialogue with all the parties who are seeking 
     answers to the climate change problem.
       So those are three steps we can take--monitoring and 
     controlling our own emissions, supporting the existing 
     scientific work and encouraging new work, and developing 
     experiments in joint implementation and technology transfer.
       Why are we doing all those things? Simply because the oil 
     industry is going to remain the world's predominant supplier 
     of energy for the foreseeable future.
       Given that role we have to play a positive and responsible 
     part in identifying solutions to a problem which is 
     potentially very serious.
       The fourth step--the development of altenative energy--is 
     related but distinct.
       Looking ahead it seems clear that the combination of 
     markets and technology will shift the energy mix.
       The world's population is growing by 100 million every 
     year. By 10,000 just since I started speaking.
       Prosperity is spreading. By the end of the century 60 per 
     cent of the world's economic activity will be taking place in 
     the South--in areas which ten years ago we thought of as 
     Third World countries.
       Both these factors will shape a growing level of demand for 
     energy.
       At the same time technology moves on.
       The sort of changes we've seen in computing--with 
     continuing expansion of semiconductor capacity is exceptional 
     but not unique.
       I think it is a reasonable assumption that the technology 
     of alternative energy supplies will also continue to move 
     forward.
       One or more of those alternatives will take a greater share 
     of the energy market as we go into the next century.
       But let me be clear. That is not instead of oil and gas. It 
     is additional.
       We've been looking at alternative energies for a long time, 
     and our conclusion is that one source which is likely to make 
     a significant contribution is solar power.
       At the moment solar is not commercially viable for either 
     peak or base load power generation. The best technology 
     produces electricity at something like double the cost of 
     conventional sources for peak demand.
       But technology is advancing, and with appropriate public 
     support and investment I'm convinced that we can make solar 
     competitive in supplying peak electricity demand within the 
     next 10 years. That means, taking the whole period from the 
     time we began research work, that 25 to 30 years will have 
     elapsed.
       For this industry that is the appropriate timescale on 
     which to work.
       We explore for oil and gas in a number of areas where 
     production today wouldn't be commercially viable at the 
     moment.
       Thirty years ago we did that in Alaska.
       We take that approach because we believe that markets and 
     technology do move, and that the frontier of commercial 
     viability is always changing.
       We've been in solar power for a number of years and we have 
     a 10 per cent share of the world market.
       The business operates across the world--with operations in 
     16 countries.
       Our aim now is to extend that reach--not least in the 
     developing world, where energy demand is growing rapidly.
       We also want to transfer our distinctive technologies into 
     production, to increase manufacturing capacity and to 
     position the business to reach $1bn in sales over the next 
     decade.
       I am happy to report that there will be significant 
     investment in the USA and we'll be commissioning a new solar 
     manufacturing facility here in California before the end of 
     this year.
       The result of all is that gradually but progressively solar 
     will make a contribution to the resolution of the problem of 
     carbon dioxide emissions and climate change.
       So a series of steps on the journey. These are the initial 
     steps. We're examining what else we should do, and I hope to 
     be able to announce some further steps later in the year.
       Of course, as I said at the beginning, nothing we can do 
     alone will resolve the concern about climate change. We can 
     contribute, and over time we can move towards the elimination 
     of emissions from our own operations and a substantial 
     reduction in the emissions which come from the use of our 
     products.
       The subject of climate change, however, is a matter of 
     wider public policy.
       We believe that policy debate is important. We support that 
     debate, and we're engaged in it, through the World Business 
     Council on Sustainable Development . . . through the 
     President's own Council here in the United States . . . and 
     in the UK where the Government is committed to making 
     significant progress on the subject.
       Knowledge is this area is not proprietary, and we will 
     share our expertise openly and freely.
       Our instinct is that once clear objectives have been 
     agreed, market based solutions are more likely to produce 
     innovative and creative responses than an approach based on 
     regulation alone.
       Those market based solutions need to be as wide ranging in 
     scope as possible because this is a global problem which has 
     to be resolved without discrimination and without denying the 
     peoples of the developing world the right to improve their 
     living standards.
       To try to do that would be arrogant and untenable--what we 
     need are solutions which are inclusive, and which work 
     through cooperation across national and industry boundaries.
       There have been a number of experiments--all of them 
     partial, but many of them interesting because they show the 
     way in which effective markets can change behaviour.
       We're working, for instance, with the Environmental Defence 
     Fund to develop a voluntary emissions trading system for 
     greenhouse gases, modelled on the system already in place in 
     respect of sulphur.
       Of course, a system which just operates here in the United 
     States is only a part of the solution. Ideally such 
     structures should be much wider.
       But change begins with the first step and the development 
     of successful systems here will set a standard which will 
     spread.
       Ladies and Gentlemen, I began with the issue of corporate 
     responsibility. The need for rethinking in a new context.
       No company can be really successful unless it is 
     sustainable, unless it has capacity to keep using its skills 
     and to keep growing its business.
       Of course, that requires a competitive financial 
     performance.
       But it does require something more, perhaps particularly in 
     the oil industry.
       The whole industry is growing because world demand is 
     growing. The world now uses almost 73 million barrels of oil 
     a day--16% more than it did 10 years ago.
       In another ten years because of the growth of population 
     and prosperity that figure is likely to be over 85 mbd, and 
     that is a cautious estimate. Some people say it will be more.
       For efficient, competitive companies that growth will be 
     very profitable.
       But sustainability is about more than profits. High 
     profitability is necessary but not sufficient.
       Real sustainability is about simultaneously being 
     profitable and responding to the reality and the concerns of 
     the world in which you operate. We're not separate from the 
     world. It's our world as well.
       I disagree with some members of the environmental movement 
     who say we have to abandon the use of oil and gas. They think 
     it is the oil and gas industry which has reached the end of 
     history.
       I disagree because I think that view underestimates the 
     potential for creative and positive action.
       But that disagreement doesn't mean that we can ignore the 
     mounting evidence about climate change and the growing 
     concern.
       As businessmen, when our customers are concerned, we'd 
     better take notice.
       To be sustainable, companies need a sustainable world. That 
     means a world where the environmental equilibrium is 
     maintained but also a world whose population can all enjoy 
     the heat, light and mobility which we take for granted and 
     which the oil industry helps to provide.
       I don't believe those are incompatible goals.
       Everything I've said today--all the actions we're taking 
     and will take are directed to ensuring that they are not 
     incompatible.
       There are no easy answers. No silver bullets. Just steps on 
     a journey which we should take together because we all have a 
     vital interest in finding the answers.

[[Page E1058]]

       The cultures of politics . . . and of science . . . and of 
     enterprise, must work together if we are to match and master 
     the challenges we all face.
       I started by talking about the end of history. Of course it 
     hasn't ended. It's moved on.
       Francis Fukuyama who coined that phrase describes the 
     future in terms of the need for a social order--a network of 
     interdependence which goes beyond the contractual. An order 
     driven by the sense of common human interest. Where that 
     exists, societies thrive.
       Nowhere is the need for that sort of social order--at the 
     global level--more important than in this area.
       The achievement of that has to be our common goal.
       Thank you very much.

       

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