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Illustration: Sarah Grillo/Axios

BP's mammoth asset write-down is certainly a big story, but whether it's a big climate change story is a trickier question. Let's give it a qualified yes.

Catch up fast: The oil-and-gas giant yesterday made several announcements rooted in its view of the "enduring impact" of COVID-19 on the economy and demand, and where it sees clean energy going.

  • BP cut its long-term crude price assumptions steeply, said it will write-down up to $17.5 billion on its assets, and signaled that some of its oil discoveries will never be developed.

Why it matters: That latter piece — an acknowledgment of what are known as "stranded" fossil fuel assets — made lots of waves yesterday.

  • Rachel Kyte, a veteran of international climate diplomacy and now dean of Tufts University's Fletcher School, tweeted that it's "hard to overestimate" the significance of yesterday's announcement.
  • A Financial Times (subscription) editorial notes (emphasis added): "Bernard Looney, the new boss at BP, is more upfront than some peers in stating that meeting climate change targets is triggering financial charges. There will be plenty more where these ones came from."
  • Oh, and a number not mentioned in yesterday's quick-hit: BP has sharply raised the carbon price it builds into its investment planning to $100-per-ton in 2030, a sign that it sees the world getting more serious about climate.

But, but, but: A couple of notes of caution are probably warranted.

  • One is that BP, which said the pandemic reinforces its long-term climate framework rolled out in February, expects COVID-19 to "accelerate the pace of transition to a lower-carbon economy and energy system." But the jury is still out.
  • Another is that BP's prior long-term crude price assumptions — now slashed 27% to a Brent price of $55-per-barrel — were higher than some peers, per this note from the Westwood Global Energy Group.
  • Oil analyst Arjun Murti said via Twitter that its old assumptions were simply too high and that pointing to the pandemic and the low-carbon transition is an "excuse" for yesterday's write-down of assets.
  • "I wouldn’t confuse unprofitable investments based on too high of a price deck with 'stranded' in the sense normally used by enviros," he said.

What we're watching: How other players might respond to BP's steps. The New York Times points out that BP's price assumption change "could put pressure on rivals to take similar steps."

The bottom line: "In the longer term, this is about BP’s strategic shift away from oil and gas," Wood Mackenzie analyst Luke Parker said in a note.

  • "While that will be a multidecade affair, BP is already getting to grips with the idea that its upstream assets are worth less than it believed as recently as six months ago. Indeed, some of them are worth nothing."

Go deeper: BP submits to brutal reality on the future of oil (Bloomberg)

Go deeper

Bryan Walsh, author of Future
Sep 19, 2020 - Energy & Environment

Pinpointing climate change's role in extreme weather

Photo illustration: Aïda Amer/Axios. Getty Images photos: David McNew and George Rose

Climate scientists are increasingly able to use computer models to determine how climate change makes some extreme weather more likely.

Why it matters: Climate change's effects are arguably felt most directly through extreme events. Being able to directly attribute the role climate plays in natural catastrophes can help us better prepare for disasters to come, while driving home the need to tackle greenhouse gas emissions.

Ben Geman, author of Generate
Sep 19, 2020 - Politics & Policy

The new politics of global warming

Photo illustration: Sarah Grillo/Axios. Getty Images photos: Ethan Miller and Chip Somodevilla

The 2020 election is both very different and very familiar when it comes to the politics of global warming and the stakes of the outcome.

What's new: Democratic voters are more concerned than in prior presidential cycles, polling shows.

Scoop: Trump tells confidants he plans to pardon Michael Flynn

Photo: Alex Wroblewski/Getty Images

President Trump has told confidants he plans to pardon his former national security adviser Michael Flynn, who pleaded guilty in December 2017 to lying to the FBI about his Russian contacts, two sources with direct knowledge of the discussions tell Axios.

Behind the scenes: Sources with direct knowledge of the discussions said Flynn will be part of a series of pardons that Trump issues between now and when he leaves office.

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