Open Data, OpenCorporates, OpenOil

The UN Climate Summit 2014 has naturally put the issue of climate change and global warming firmly at the top of the agenda, where they belong. This, in its turn, has been rather awkward for the oil and gas companies that are responsible for creating much of the problem - and which are still lobbying hard against the necessary measures to address it. But clearly, they need to be seen to be doing something to back the Summit's aims, hence the following announcement, made there yesterday:

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The UN Climate Summit 2014 has naturally put the issue of climate change and global warming firmly at the top of the agenda, where they belong. This, in its turn, has been rather awkward for the oil and gas companies that are responsible for creating much of the problem - and which are still lobbying hard against the necessary measures to address it. But clearly, they need to be seen to be doing something to back the Summit's aims, hence the following announcement [.pdf], made there yesterday:

Multinational oil and gas companies have joined forces with governments and international environmental organizations to cut the emissions of methane, a potent greenhouse gas produced by the oil and gas industry, as part of the Oil & Gas Methane Partnership. Launched at today’s Climate Summit, this Partnership is under the Climate and Clean Air Coalition to Reduce Short- Lived Climate Pollutants (CCAC).

...

This announcement was one of five made today by industry leaders, governments and civil society organizations working to help reduce the production of short-lived climate pollutants and advance climate solutions from several industry sectors. The Industry Action Area Session laid out new and concrete plans to reduce these pollutants in oil and gas production, freight transportation, industries using hydrofluorocarbons, and municipal solid waste disposal.

All welcome stuff, but keeping track of what the oil and gas companies are up to, and to what extent they are keeping these and similar promises is no easy matter. Of course, that problem is not limited to this particular sector: many industries have built up such complex linkages between companies, subsidiaries and partners that it is very hard to keep tabs on where and how the money is being made, and where it ends up - precisely the aim of such structures.

Open data can play a crucial role in helping us navigate such mazes. In the world of business, the key store of open information is OpenCorporates, which I've written about several times. But OpenCorporates is just the start; what's really exciting is the way that people are starting to use its growing resources to investigate companies and their industries. A particularly good example of this is a project called OpenOil:

Three global debates are being held separately which need to be linked: on climate change, energy scarcity and security, and the Resource Curse. We need to up the game and evolve workable policies which address two or three of these issues at the same time, instead of siloing each issue and producing policy agendas which, by being unintegrated, are unimplementable. OpenOil seeks to be at the heart of such joined-up thinking.

Media and popular culture are vital and neglected areas of awareness in and around oil industries. Long-term programs are needed to build energy specialisation among journalists. In oil-revenue dependent countries, building expertise should begin with oil because of its central role in political economy, and cover other energy forms later.

Social media, Open Source, and Open Content approaches have a role to play in the creation of a more open atmosphere around the oil industry.

A good example of how open data plays a vital part in this can be seen in OpenOil's recent project that tries to map BP's global network of companies. Here's a hint of just how complex that turned out to be:

The decision to try and map BP’s global network was based on the fact that the company makes many public filings. We didn’t really appreciate quite how many until we had finished.

In the UK jurisdiction alone, the BP network we constructed shows 182 affiliate companies. Of these, the 26 which were second tier companies made 157 filings in 2012 and 143 in 2011. The group probably then submits something in the region of 600 to 800 filings a year in the United Kingdom alone. Then we were able to access filings in probably a dozen other jurisdictions.

All in all, the BP group probably averages between 50 and 100 A4 pages of public disclosures per day to public authorities around the world, under normal conditions. That is, not counting investigations, legal proceedings, or any other event-driven process.

And this, according to OpenOil, was the key insight that OpenCorporates gave them:

the need to identify individual company structures. Not “BP”, or “BP Global Investments” but “BP Global Investments Limited, incorporated in the UK on March 4th, 1932, company number 00263889”.

This led to the following realisation:

The entire play in the way multinationals operate is in the interplay between the group as a co-ordinated whole, making a decision about how to invest in exploration in the Arctic, how to react to the US shale gas boom, or how to allocate this year’s profits, on the one hand, and the fact that this unified strategy is played out across over a thousand affiliate companies who each exist as a separate legal “person”. The company naturally seeks to maximise advantage across jurisdictions by combining these different legal persons in the most profitable and least liable way for any given business problem. But even if the group does act with one mind, the price of being able to maintain the affiliate structure as separate legal persons is a bare minimum of autonomous reporting by each of them.

It was as if the BP group is a superorganism and its affiliates were the constituent organisms included in the whole, like individual ants or coral. None of those companies had any purpose or would even survive without being integrated into the colony. Nevertheless, each of them has a unique footprint and what we were doing was studying the traces of their uniqueness, their “genetic code”, to see if significant information was stored there which could tell us something about the internal functioning of the colony.

Again, that's probably true of many industries where there are huge, multinational players with thousands of affiliate companies. Only with the kind of open data provided by OpenCorporates do we have any chance of understanding how these "super-organisms" are made up and function. And only with that understanding is it possible for governments to frame sensible, effective policies directed towards achieving key social goals - like tackling climate change.

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