The transcript from this week’s MIB: Lord John Browne, CEO of BP, is below.
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VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast I have an extra special guest. His name is John Browne, perhaps better known as Lord Browne or Sir John Browne. He is the former CEO of B.P. and the author of numerous fascinating books. He is incredibly forthright and straightforward. Without any hesitation, he discusses all sorts of really fascinating things from engineering to his personal life, to B.P. and the impact of hydrocarbons on the environment. If you’re interested in what it’s like to run a company, what it’s like to lead a double life, what it’s like to be at the vanguard of engineering, then you’re going to find this to be an absolutely fascinating conversation.
So with no further ado, my interview of Sir John Browne.
VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
RITHOLTZ: My special guest today is the right honorable Lord Browne of Madingley, better known as John Browne. He was the CEO of British Petroleum from 1995 to 2007. He is also the former president of the Royal Academy of Engineering.
Since 2001 he has been a Member of the House of Lords. He is the author of five books, most recently, “Male, Think, Imagine: Engineering the Future of Civilization.”
John Browne, welcome to Bloomberg.
EDMUND JOHN PHILIP BROWNE, BARON BROWNE OF MADINGLEY: Very good to be here.
RITHOLTZ: So you have a fascinating background and — and quite an interesting career, but I have to go back to your education. You — you earned a degree in Physics at Cambridge, and then you get a M.S degree in Business at Stanford. What was it like going from the U.K. to California? That must have been a little bit of a culture shock.
BROWNE: It was very different. I — I found the whole — it was 10 years after I graduated from Cambridge I went to Stanford. And I went to Stanford because everybody said, “Don’t go to Harvard. It’s just a pale shadow of what Cambridge actually is founded by someone who graduated from Cambridge so go somewhere …
RITHOLTZ: Five hundred years ago, right.
BROWNE: … they have a very short — I have long memories I should say, yeah.
So I went to Stanford and, of course, I found a — a completely different set of people — a very great set of people, entrepreneurs even then, this was in the late ’70, early 80’s, and they were fascinating. And the teaching was interesting, the leading edge thinking was interesting and the quality of people. Both the students and faculty was something you couldn’t see elsewhere, I don’t think.
RITHOLTZ: So I want to — I want to cross Harvard off my list. Second tier school Cambridge and Stanford, that’s where we’re going to send the kids.
So you — you graduate, you literally joined B.P. as an apprentice while at university and you remained with the firm your entire career. That — that’s fairly unusual these days. Tell us about having a career with a single company.
BROWNE: Well, in those days it wasn’t that unusual, I have to say. I joined — I technically joined B.P. in 1966, the day I went up to Cambridge University. They helped pay for my studies, which was very important. In fact, I paid for myself entirely from the age of 18 for everything I did by winning a couple of scholarships to Cambridge, one which was involving the — a cross-disciplinary approach. If you were a scientist you had to rush a thesis on something to do with arts. And I wrote a thesis about Iran where I had lived, the Safavid architecture of Isfahan. So I won a lot of money and that kept me going through university.
But I joined — and about every year I thought I’d leave and so I, you know, be offered jobs. And somehow B.P. offered me a better job. And every time I was thinking of going, I had a bigger and bigger challenge. So I — I went to Alaska in 1969 because I had asked to go to the United States. Alaska was not quite what I had in mind, but I found myself …
BROWNE: … working 200 miles north of the Arctic Circle, near Point Barrow, on the testing oil wells which turned out to be the Prudhoe Bay oil field, one of the greatest oil fields ever discovered in North America.
So that’s what I did, enough from the field work and graduated one day, my — I was about to leave, my boss came in and said, “Would you like to come to New York with me?” I said, “When do we pack?’
BROWNE: And off I went to New York and lived here for four years, and life carried on from there.
RITHOLTZ: Our weather in New York is not great, but it’s certainly better than — than the Arctic Circle. You — you mentioned the work you did in Iran. I’m reminded of — of some of your travels in your book “Beyond Business” where you describe, meaning, some of the world’s — let’s call them most colorful despots, Colonel Gaddafi in Libya, Vladimir Putin at his country DACA, Venezuelan leader Hugo Chavez, as well as the communist despots in Kazakhstan and secret meetings with Russian oligarchs.
The obvious question is why this motley crew, but I think we all know the answer, they seem to be where the oil is.
BROWNE: Correct. I mean, it’s — I think someone said once that God had played a joke on people, put the oil in places where people didn’t want to go. We can’t find oil under London. That will be a very good thing. We — we’d never be allowed to produce it or — or New York. You can’t find oil in California, and it’s very difficult to develop and produce.
RITHOLTZ: There’s plenty of oil in the North Sea, so you have access …
BROWNE: That’s true.
RITHOLTZ: … not too far from London.
BROWNE: But not — but not enough. It was a very important discovery, the North Sea, both in the U.K. and Norway, and it’s still producing quite a lot of oil and gas. But there’s more oil and gas outside of those areas. And — and in those days, of course, the Permian — the Permian Basin was a place which was declining. I went there for field training when it was sort of on decline and you were taught how to save one cent because that made all the difference to the profitability of a well. So it really taught you the basics of activity. Now, of course, it’s a tremendous place where everybody wants to invest and growing like gangbusters.
RITHOLTZ: And that’s strictly because of the new technology …
RITHOLTZ: … of fracking and the ability to take what was previously not productive fields and turn them to giant windfall.
BROWNE: So it — it was a way of releasing what geology put in place, what history put in place that couldn’t flow naturally, so this is so-called hydraulic fracking — hydraulic fracturing, a technique which I might say was invented by one of the companies in the B.P. group in 1948 by Amoco, the Standard Oil of Indiana, which is part of B.P.
BROWNE: And so it’s a — it’s a very — a very — the lightly used activity until suddenly the Permian appeared and when it was — became a very heavily used and quite controversial technique.
RITHOLTZ: So one of the things you mentioned in — in — I believe it was “Beyond Business,” Vladimir Putin was one of the few people you said you were determined to say goodbye to before leaving B.P. Why is that?
BROWNE: Well, I think I had — whether this is the Stockholm syndrome working, I’m not sure, but I had spent so much time with him. Recall that we’re pulled together a big deal in Russia called TNK-BP …
BROWNE: … and we were the biggest foreign investments in Russia and also the fastest-growing oil and gas company in Russia. We applied modern management, contemporary technology to some very good assets that were declining under the Soviet Union’s rule.
So I met him at least once a quarter, and we had a standard agenda, which I went through to tell him how well we were doing. And he would always say, “You must do more.” And then we would have a discussion about who owned it. And I did a deal, a very important deal which said that B.P. and 50 percent and the Russian partners and 50 percent. Mr. Putin always said that’ll never work, it’ll blow up and really should be 51-49, and I and Mr. Putin want 51. And so, Mr. President, I want the other way around, so that’s why we’re 50-50. And actually it worked remarkably well now …
RITHOLTZ: Now, a number of people, over the years, have complained that it’s very challenging to do business in Russia that the rule of law is not the same as it is in Europe or the United States, that you can’t rely on contracts, that there is a black market as well as an underground that makes business challenging there. You guys seem to have done pretty well there. What — why — first of all, how accurate are those descriptions? And second, why was B.P. able to succeed where lots of other companies were unable?
BROWNE: So I think the description is accurate, but it changes over time, you know, so — because Russia doesn’t stand still either …
BROWNE: … so it gets better and worse depending. So I — I think the most important thing about this sort of business that B.P. is in or any other company like that is you had to be sure you’re wanted and you’re doing something that the country really wants you to do. And so that’s what kept B.P. in the position that it could do business the way it wanted to do it because Putin said, “I see I need a foreign investor. I need to demonstrate to the world that these people are doing good things. I’m growing, I’m modernizing.” And B.P. did all those things. And as a result, we were able to — with scale — with the big scale that we had and with our partners who were pretty good and very good. We were able to navigate a path which kept us in — on the straight narrow. And that’s really what we did.
RITHOLTZ: Do you still have a good relationship with Putin or has everybody’s interest move on — moved on?
BROWNE: They were moved on. I mean, I haven’t seen Mr. Putin since I left B.P.
RITHOLTZ: And what — what — he was — by that point in time, he was president of Russia, right?
BROWNE: Yes, he was. Yes, I remember he — I first met him when he came to London — let’s see, I think in late ’99 when Yeltsin was the president. And we were all looking at Mr. Putin saying this is a young and refreshing person who talks about the rule of law and getting things done, and we thought this was terrific. And actually his first term that’s exactly what he did.
RITHOLTZ: Quite, quite interesting. I wanted to bring up something you had said in an interview not too long ago. Along the — those lines, you mentioned you would like to see more scientists and engineers in top corporate and political positions. Explain your thinking behind that.
BROWNE: I would like to see them in these positions because they’re trained in a way of thinking that is different from being trained in economics, let’s say our political science or journalism. It’s very different. It’s a — it’s a very different way of looking at facts and building theories and testing them and very practical, too. Engineers after all have to get things done and they were — and they have to get them done and they have to work without — beyond the shadow of debt. I mean, you don’t want to walk across a bridge, which has a 50 percent probability of standing up. It’s not a good idea.
RITHOLTZ: As opposed to the forecast of the average economist, may or may not …
RITHOLTZ: … be remotely correct.
BROWNE: You — you can’t do that. So it’s a different way of thinking. It’s a practical way of doing things and it’s actually a very truthful approach. I think most scientists and engineers are taught that, in the end, you have to say that — you have to talk about the truth, you have to be fact-based and you can’t spin anything or add a layer of complexity to it so people can’t quite understand it. In the end, because advance is about challenge and it’s about challenge and testing, which is based on facts and truth.
RITHOLTZ: So perhaps that explains why there are so few scientists and engineers as politicians.
BROWNE: It’s possible, it’s possible.
RITHOLTZ: Without the spin, it becomes very much a challenge to get elected if you’re telling the truth and telling people what they don’t want to hear.
BROWNE: From time to time, I suppose that’s called a technocratic politician. And sometimes they work, sometimes they don’t. You know, for example, Italy has had a series of when they really get into a trouble, they have a technocratic prime minister, and Monti, for example, Mario Monti worked pretty well, sort of sorted out a lot of stuff, very unpopular though because he kept talking about the truth.
RITHOLTZ: And I have to start with a quote of yours early in the book, “Engineering is wrapped all around us like a protective and life-sustaining blanket.” Explain.
BROWNE: Which is what I firmly believe, let me say. So I like to start a little bit back from there. Everything you look at in the way that progress and civilization — progress of civilization of humanity is based on engineering, whether that’s the Flynn (ph) tax, you know, you hold a massively beautiful object in your hand, it was very important to begin to think about how you carve up an animal and how you change the way you survive through to looking at something which opens the imagination like the James Webb Telescope but the Goddard Space Center. This is amazing thing. We’re going to fire it into space a million miles away from us the so-called Second Lagrangian Point, and it’s going to sit there unfold like a piece of origami …
BROWNE: … 140 folds, and then it’s going to look towards the beginning of time.
Now that’s incredible. It just fires the imagination to think you could actually look towards the beginning of time. And you might actually see some planets on the way, you know, and that might actually tell you something about life. So I think I find that very exciting. That’s about civilization. It’s wrapping our mind, it’s giving our mind a blanket which allows it to think securely and imagine, which is what human beings do.
So I think engineering is the — is the golden thread through everything. It protects us, of course, it does. It protects us from disease. You know, we all get healthier. We live longer. It protects us from poverty. You know, we have — the world is getting richer, less people living in — in — in extreme poverty. And actually it protects us from violence as well.
When I was writing this book, what — what I found fascinating was the world has actually become less violent the more advanced the weaponry has become. And so that’s a protective blanket. It’s the engineering has allowed everyone to say, Okay, I get it. If we start doing something, someone would do something to us.
It’s not necessarily mutual assured destruction, no, it’s not …
RITHOLTZ: But it’s a deterrent for sure?
BROWNE: It’s mutual assured disturbance.
BROWNE: You know, big, big disturbance. And that’s what keeps us in equilibrium. And — and engineering does all of that. And remember, it really is something about safety because I contend that engineering — engineers have saved far more lives than all the physicians in the world.
RITHOLTZ: Because of the ability to …
BROWNE: Public health, engineering molecules, engineering drugs. Go to a hospital, look at the kit, look at the equipment, MRIs, CAT scans, you know, what’s in an intensive care ward? Robotic surgery, you know, which is …
BROWNE: … don’t damage the nerves, you — you know, that — that …
RITHOLTZ: Much more precise than the human hand.
BROWNE: Much more precise. The knives that cut the flesh that immediately can detect whether they’re close to a cancerous cell, so all of this is amazing stuff.
And I love when I spoke to Robert Langer at MIT. He’s a great inventor. He’s called the “Edison of Medicine” is his …
RITHOLTZ: Is this the da Vinci machine?
BROWNE: No, he is the one that thinks of blood as a — a great chemical engineering experience and tries to get — get drugs to the place they should go rather than throughout the whole body, so rather than chemotherapy going through the whole body, if you’re using the blood stream to get something to an exact place. And I — I thought his phrase was wonderful. He said, “You know, my ambition is just to — is to reduce suffering,” and that’s what engineering allows me to do.
RITHOLTZ: That — that’s quite fascinating. Your — throughout the book you — you referenced the reduction of things like not only war and crime, but the increased longevity reminded me a lot of Steven Pinker’s book, “The Better Angels of Our Nature,” or is it the other way around, Better Nature of Our Angels — “Better Angels of Our Nature,” which talks about what the media doesn’t, which is wherever you look, whether it’s literacy or childhood hunger or just come up with a list of markers of human progress, we’ve done really well over the past thousand years, certainly 500.
BROWNE: I agree. I mean, I took a very broad sweep and took also some things where, today, I would say to say that they’re really good is controversial in many sectors of society, for example, oil and gas; for example, facial recognition; for example, the social media and the issues to do with privacy. There are many good aspects to all this. There are also some bad ones, but it — it raises the more general point that all engineering has great intended consequences that must do great …
BROWNE: … but also unintended consequences. And the question is how do you balance this hope, and that’s been happening since people first made a piece of kit for anything for sailing.
So it — the — the balance is — is partly about rules and regulations, you know, don’t use it for this. Partly about education, you know, it’s not right that the engineer should say, “Let’s do it because I can do it.” I should stop for a moment and say, “Should I do it? Should I do it?” And in corporations, that’s, of course, the role of boards and leaders.
But it’s also about engineering itself. I think, you know, in — in my area, energy, I don’t believe anyone purposefully decided to create an unstable climate by pumping CO2 into the atmosphere through burning hydrocarbons. What they wanted to do is to give people light, heat and mobility.
RITHOLTZ: Better than burning well oil as you mentioned in the book.
BROWNE: Well oil or — or wood or cutting down forests, but also giving people a very different modern way. So — but we’ve created a problem and I’ve been on this point for almost a quarter century now saying, you know, it’s the oil and gas industries that’s created this problem and we need to fix it. And the way to fix it is not to stop engineering, is to apply more engineering to solving the problem.
And actually, in this area, I would say that we have already all the engineering processes to stop pumping as — the CO2 into the atmosphere and actually even to clean up some of the CO2. The problem is that the process is the engineered products are too expensive until they all rolled out in massive scale because …
RITHOLTZ: Is — isn’t that a chicken and egg problem? Meaning …
BROWNE: This is where policy comes in.
RITHOLTZ: So in other words, policy has to push these …
RITHOLTZ: … these new engineered products to the point where they become more economical.
BROWNE: Exactly. So you can’t say, oh, well, we have to invent all that. You don’t have to invent, we need to apply and this is where engineering is very good because as you apply more and more, so the unit cost comes down. We know that for sure. So — but you need a — a policy lever.
My — my — when I look at all the policy levers, I said the biggest policy lever you need is a price on carbon. Carbon taxes, you probably need other things as well, but it’s got to be priced high enough so that people can actually do something to get it out of the system.
RITHOLTZ: Quite interesting. I very much like the way you structured the book via the chapters. The titles are Progress, Makes, Think, Connect, Build, Energize which we’re just discussing, Move, Defend, Survive, Imagine. That — that was really quite interesting.
One of the things that really didn’t get a lot of pages was modern food and agriculture, which is really how we’re going to support 8 billion people and keep them fed. What is it about agriculture that seems to be so different from the other technologies you discussed because clearly there’s been tremendous progress in terms of yield per acre and how much a single farmer can produce?
BROWNE: So in choosing what to write about, I only write about things that I’ve been involved in and — because otherwise I — I can’t actually write. I’m not — I’m not someone writing a survey, so I’m writing about things I’ve been involved in one way or another, you know, whether it’s being on the board of Intel or Daimler-Benz or whether it’s being on the board of the Crick Institute, the biomedical research facility. It’s all these sorts of things.
So I — I — I said I’ve actually got to have some connectivity here. I used to be Norman Foster, the great architect’s chairman at one stage when he was thinking of taking his company public. So I’ve been involved in and out with all the things that I’ve been talking about, and I’ve never actually done anything in food production or agriculture. And so I said there are plenty of people who will talk about that.
Let me talk rather selectively because I get — as the author I get to choose …
BROWNE: … and I chose the things that I felt comfortable to talk about because I’ve had some hands-on experience. I have actually met the people I’ve been involved, and so it allowed me to speak from the first person.
RITHOLTZ: Quite, quite interesting. I want to talk a little bit about a book you wrote in 2014, “The Glass Closet,” and that’s only five years ago, but it seems like so much has changed in — in half — half a decade. In the book you point out coming out of the closet is good business. Explain what you meant by that.
BROWNE: I — what I meant was that when people can be themselves in the place of work, they bring their whole selves to the work, and they can feel included rather than separate and apart. One of the things that I think every CEO knows in their heart and they know statistically is that if you can build teams where people really feel included, they actually go and work to the purpose of the firm.
When people see people being excluded, it creates a lot of grit in the system. People don’t actually give their whole selves. They say, “Well, I could be excluded, too.” So inclusion is — and part of inclusion is being yourself and coming out.
I would say that that’s not a piece of advice for everybody because you have to be situation-sensitive. So coming out in Uganda …
RITHOLTZ: Probably not a good idea.
BROWNE: … not I think be a good idea or …
BROWNE: … Saudi Arabia, you know, because it’s against the law or it’s against norms with tremendous punishments, sometimes death. So you have to be sensible about this.
But in — in the society of the United States, the United Kingdom, most of Europe, then it’s something that absolutely people can choose to do. And when they do it, almost certainly it produces a better result, I’m staying in the closet.
RITHOLTZ: So 2014 is when the book came out. In the United States, this was not the top of the agenda for then President Barack Obama. In fact, he was not the most progressive person in terms of his views on — on marriage equality. And I think it was then Vice President Joe Biden who sort of accidentally forced the issue and Obama stepped up. And the forecast of roiling society turned out to be completely wrong.
It was very quickly accepted and wrecked (ph). It’s only five years ago, but it just seems like a given. What was the experience like in the U.K.? I know you worked on some legislation similar to the U.S. Marriage Equality Act.
BROWNE: It — it was the same. And remember this book was published in 2014.
BROWNE: It was actually written in 2012 and 2013, so that was quite a bit of time ago. But I think things have changed dramatically. So in the U.K., I sat through big debates in the House of Lords about marriage equality. I heard bigotry coming out loud and clear, you know, that gay people really make great decorators and entertainers. And my best friend is a gay person, but I have them as a token pet. You know, I mean, the list went on and on and on.
But actually when it came to the vote, I think at that time it was the single largest turnout of lords in the house to vote. And it was overwhelmingly supported. I remember going through the lobby with some of the most important Catholics in England. And someone said to me, one of them said — looked at me, a friend of mine said, “I’m going to burn in hell for this, but we’re going to get this done.”
And I thought that was a wonderful statement to say this is the right thing for the nation, and it really was. And I think it was a tremendous achievement that changed attitudes a — a long way. It loosened people up a bit. And — and the Brits do need loosening up occasionally.
RITHOLTZ: Just a touch. So — so here’s the interesting thing in the United States. Despite the legislation and despite a somewhat accepting society, not a lot of chief executives are either gay or, if they are gay, out of the closet. Probably the best known CEO is going to be Tim Cook of …
RITHOLTZ: … of Apple, a giant company. Venture capitalist Peter Thiel came out on — on — sort of dragged out of the closet. I don’t think he was treated fairly by some of the media. The CEO of Lloyds of London in the U.K. not too long ago.
BROWNE: He — he stepped down.
RITHOLTZ: What does it mean that there are some high profile people who are LGBT as leaders of company? How — how significant is this?
BROWNE: Well, look, I — I think I want to go back to what happened when I was a student. When I was a student, it was — if you were gay and you actually had a sexual encounter with a man, you’d go to prison.
BROWNE: In ’67, it was illegal.
RITHOLTZ: In the U.K.?
BROWNE: Now the law challenged — the law …
RITHOLTZ: I mean, it was — by the way, lots of laws like that on the books …
RITHOLTZ: … in the United States.
BROWNE: So the law changed and …
RITHOLTZ: When — when did that change?
BROWNE: Actually in ’67. It was 10 years after the so-called Wolfenden report was put before the House. It took 10 years to persuade people to change the law. And when the law changed, nothing happened.
RITHOLTZ: No, no, no difference.
BROWNE: No, because behavior lags the law hugely, hugely. And I think …
RITHOLTZ: Is that backwards? Behavior lags the law or the law lags actual behavior?
BROWNE: Or both. So you changed the law, the behavior that was established with the law still stays in place, and it takes ages for it to change, in my view. I think law is important necessary but not …
BROWNE: … sufficient obviously. So I — I think people still — there’s a generation gap. I think there’s also some other issues to do with boards of directors probably quite conservative. Don’t want to have too many — what you might call floating variables around …
BROWNE: … either you want to — you want to reduce your problem as it were to have a CEO that, you know, is just — has no peripheral activity that might possibly get in the way of the company.
RITHOLTZ: Does that help explain while — why today there’s still a very short list of CEOs who were out?
BROWNE: I — I think it’s A, it could be one reason. We don’t know what the real reasons are. I think that might be one reason. Another one might be people self-selecting out possibly, saying I sure just didn’t want the profile. Some — there may be some basic hidden discrimination, but very possible. But — you’re right, I mean, there’s a handful of CEOs who are openly gay in the S&P 500. Variably, I think about maybe four or so.
RITHOLTZ: Something like that, right.
BROWNE: But, you know, statistically, we should have 25 to 50, so something is wrong here, either 20 — 21 to 46 …
BROWNE: … CEOs are in the closet or something else is happening.
RITHOLTZ: So …
BROWNE: And — and — and that’s worrying for the simple reason that it’s so important to have role models out there. Otherwise, you don’t encourage people. You can’t say to people, well, you know, just come out it’ll be great, it’ll be good for your career. And they say, “Well, that’s very interesting, John, but show me where the CEOs are. Show me where they are.” And so that’s why this is a very important point.
RITHOLTZ: So the question I have to ask you is while you were CEO of B.P. not being public about your sexuality, how did that affect the way you went about your job?
BROWNE: Not — it — it’s certainly affected it. I think what it did is it — it — it — it — it allowed me to focus only on my job with the exclusion of myself, basically, my private life and developing who I really was. And I did that partly because my thought process got stranded. I — when I worked this book, I — the story which always sticks with me as I went to the Aylesbury Festival to be interviewed about the Glass Closet.
In the Q&A, a young man got up in the audience and said, “I am in the same business as you for your competitor, Reed Shell (ph),” you know. And he said, “Here’s the thing, John. We all knew you were gay before you came out …
… but the only thing was none of us were brave enough to come and tell you that.” And I thought to myself, “That explains everything.”
So I heard — because I was a child of the 60’s, because my mother was a survivor of the Holocaust and she reminded me never tell anyone a secret because they’ll surely use it against you, and never become a member — an identifiable vocal member for minority because when the going gets tough, the majority always hurt the minority. So armed with those points I said to myself, “I’m going to stay in the closet forever.” And so that’s what I did.
I ran a double life, you know, when I was young. It was kind of fun. You know, you could — but — but as a — as I got more and more well-known became more and more dangerous, and I had to go deeper and deeper into secrets. So — and then eventually I got outed but for all the reasons I explained in the book. And it caused me — I said what it did to is it made me make some really bad judgments that I couldn’t even believe I’ve done myself about, you know, how to keep a little secret.
I had a relationship with an escort who I actually thought was a relationship. He was the guy who sold the story to the press, you know, sold it for money. I lied in a — in a witness statement not in a — fortunately not in court about how I’d met this guy because I couldn’t bring myself to explain what it was. These things I don’t do, but the circumstances were such that they created some really bad judgments in — in my mind. And I think I learned a lot about why it’s so important therefore to be truthful and to be yourself because the moment you get into a situation where you are dissembling, everything starts going wrong.
And that, I think, is a very — that’s one of the reasons why it’s so important — whenever you possibly can — to come out. You know, if — if you’re going to be hurt, if it’s unsafe, don’t do it. But — but think about it hard.
RITHOLTZ: The — “The Glass Closet” was quite a brave book especially considering that was 2014, which is only five years ago, but it might as well have been — it might as well have been a lifetime ago. Any regrets about the book or you find it’s freeing and you were happy you …
BROWNE: Not at all.
RITHOLTZ: … put it out?
BROWNE: I think a lot of people still want the book. They talk to me about the book. It’s a topic which comes up again and again. Actually, when I’m signing my other books, we had this — I — I was signing the last book at the Harvard bookstore …
RITHOLTZ: That second tier school, is that right?
BROWNE: Second tier school. And a couple of guys came up and I signed the books of them and then they rather sheepishly pulled out a very dog-eared copy …
BROWNE: … of “The Glass Closet” and said, we’ve lent the story (ph) when I said, “How dare you?” you know …
But they said, “Could you sign it please because this is why we got married?” And, you know, that’s — that’s pretty good.
RITHOLTZ: Quite, quite lovely.
BROWNE: I think — if I may, I think one of the things to note why I think this book is so important is that things aren’t always going forward, they also go backwards. And you look at some of the regular — the — the behavior in Europe against gay people, it’s beginning to switch with these right-wing parties coming in power. There’s a lot of re-enactment of discrimination. And I think people need to be reminded that that’s a place we don’t want to go to.
RITHOLTZ: So when you were a CEO at B.P., an ad campaign was launched “Beyond Petroleum.” Tell us a little bit about the thinking there and — and how it was received. What did Beyond Petroleum mean for an oil company?
BROWNE: So it’s worth going back a little bit before 2000. But by 1997, the B.P. — my executive team and I — we had concluded that climate change was a real threat, and we had to do something about it. So I stood up at Stanford University, at the Frost auditorium, and gave the speech about climate change. And I said, “Climate change is happening. We are responsible for this and we need to do something about it.” And I laid out an action plan rather than just wringing my hands and saying it’s a terrible problem. I said, “We’re going to do the following things,” you know, trade carbon internally, invest in renewables, invest in alternative fuels, a variety — and measure what we were doing and seal our pool of methane, so we weren’t leaking it because it’s a bad greenhouse gas.
BROWNE: So we did all that. It didn’t go down well with the industry. I would say that’s a British understatement.
They — the American Petroleum Institute said that I had left the church — whatever that meant. I have …
RITHOLTZ: The church of..
BROWNE: … the church of the API, I think, the church of the petroleum industry.
RITHOLTZ: Okay. Well …
BROWNE: And …
RITHOLTZ: … the question is was it the church of the petroleum industry or the church of global warming denialism, which …
BROWNE: I think it was that, where the oil industry was in large part. So — but — but then what had happened was we realized that we — we got such a huge support internally. It changed the way B.P. thought about itself, how it recruited, could get very different people coming in. And actually, we realized that we were thinking beyond petroleum, what was going to happen beyond petroleum?
So we decided that that was going to be our strapline, thinking about beyond petroleum. And it was kind of neat because B.P., Beyond Petroleum …
BROWNE: … sort of worked together. And besides, we had to rebrand. By that time, I had undertaken a whole variety of massive deals, you know, merging with Amoco, with ARCO, with Castrol, with VEBA. These were very big deals and it changed dramatically B.P. And we needed a new identity because, you know, everyone came from somewhere else. So …
RITHOLTZ: I remember the — the Amoco deal was just giant.
BROWNE: It was the largest, I think, financial — industrial financial transaction ever at the time. Nowadays because (ph) the numbers are …
BROWNE: … telephone directories, it’s — it’s peanuts.
BROWNE: But it was big and, of course, very complex because a lot of people, a lot of activities and operations and so forth. So we concluded that we might as well say what we were thinking, which is we were thinking beyond petroleum.
Now I — I think that we were — I think the error I made is I think it was too early and we — we took one step too far. We couldn’t actually keep everyone out in the outside world with us. In the inside world, we kept everyone together, couldn’t quite get it to jail.
RITHOLTZ: Within the company everybody was on the same page.
BROWNE: Absolutely. Well — well, mostly. When you say everybody inside an organization, 80-20 is the rule.
RITHOLTZ: Right, Okay. That’s everybody.
BROWNE: That’s — that’s — that’s, by far, everybody. It’s slightly better than politics, I think, but it’s not 100 percent …
BROWNE: … sure by any means. It’s about 80-20. And what was interesting was the quality of people who joined the company suddenly changed, and we got people coming to us rather than going to Palo Alto. Yeah, yeah, it was.
RITHOLTZ: So a competitive advantage by embracing …
BROWNE: We got — we got some extraordinary people, and — and these extraordinary people are now in pretty important positions either in B.P. or elsewhere.
RITHOLTZ: So — so BP …
BROWNE: But I think it was a bit too early.
RITHOLTZ: That makes sense. Is it still too early?
RITHOLTZ: B.P. is — is selling off some of its alternative energy businesses.
BROWNE: Well, they’re reinvesting so they’re changing the portfolio, and I don’t know in detail what they’re doing. But they’re one of several oil companies that are investing in start-ups in alternative energy or energy efficiency. They’re investing in solar and wind, and they’re investing in alternative fuels, things made of biological matter rather than mineral oil from the ground. So they’re doing that. A lot of people are doing this. I think the oil industry has to focus on the technologies that really move the needle, and they’re beginning to think how we can — how they can do that.
One of the big technologies, of course, is the removal of carbon. If — if you think about it, if we could make hydrocarbons free of carbon, we’re left with hydrogen, and it’s a tremendous fuel.
RITHOLTZ: Only powers the entire universe.
RITHOLTZ: Other than that, it’s …
BROWNE: It’s pretty good really.
BROWNE: It’s got a proven track record …
BROWNE: … as they say. So we — we need to do that. By burning hydrocarbons you release CO2 so can you capture it and do something with it? That’s called carbon capture, and you either store it, so carbon capture on storage or carbon capture and use, you can use it.
Now there needs to be a lot of work in this era. We know the engineering can work and we know it can be done, but it needs policy instruments to make it worthwhile for corporations to do so that if you put a price on carbon by taxing it, the more tax you avoid, the better off you are. So if you can store it then all is good, and you can then begin to make carbon-free hydrocarbons.
Now, why on earth could you …
RITHOLTZ: Carbon-free hydrocarbons.
BROWNE: Why on earth would you want to do this? The answer is it’s very difficult to replace the hydrocarbons. We can’t do it with renewable energy. We can’t do it with alternative energy from sugar cane. It — it would destroy and have other unintended consequences.
And, you know, while renewables — and I’ve been a great proponent to renewables, when I left B.P. I ran a private equity fund, the world’s largest renewable energy private equity fund, $3.5 million, why can’t we do it with renewables? The answer is because after all this work that’s been going on so far, renewables, at best, provides four percent of the energy in the world — four percent. It’s going to take a long time for it to replace all the hydrocarbons.
Hydrocarbons are coal, oil and natural gas. Coal will be the first to go probably.
RITHOLTZ: Practically gone already, right?
BROWNE: Not in the world.
RITHOLTZ: Well, in the U.S.
BROWNE: In the U.S. but in India …
RITHOLTZ: Fading fast.
BROWNE: … in India, for example, it’s expanding.
RITHOLTZ: And — and China also …
BROWNE: So in China …
RITHOLTZ: … they’re using a lot.
BROWNE: China’s a bit, it’s moving — using a tremendous amount. I think it’s — it — it shrank and then grew a bit. But certainly in Europe, it’s — it’s going out of the system, although Poland is still providing a lot of coal. And by unintended — the unintended consequences of German energy policy called Energiewende, actually, increased the amount of coal Germany used for what was the policy designed to reduce CO2. They eliminated too many choices too quickly and relied too heavily on renewables.
RITHOLTZ: Germany uses a lot of …
BROWNE: Brown coal.
RITHOLTZ: … wind and a lot of solar …
BROWNE: And brown coal.
RITHOLTZ: And — and is there such a thing as clean coal or is that an oxymoron?
BROWNE: Clean — clean coal is coal with carbon capture in storage. You can’t clean it any other way.
BROWNE: Coal burning has other problems. It produces a variety of very bad mineral …
RITHOLTZ: Sulfur …
BROWNE: … emissions …
RITHOLTZ: … sure.
BROWNE: … as well as of particulate matter, a soot which can — if it’s — which can cause lung disease.
RITHOLTZ: So …
BROWNE: So — so it’s not — it’s not very appealing really.
RITHOLTZ: So let’s talk about the engineering that you referenced earlier. I’m under the impression that a lot of these technologies are still a major breakthrough away from going from 44 percent to 40 percent, but — but you also suggested that a lot of engineering solutions already exist.
RITHOLTZ: So let’s talk about that. What — what engineering solutions exist today to reduce carbon emissions and help …
BROWNE: So …
RITHOLTZ: … to prevent climate change?
BROWNE: … so we — we know a lot about the improvement in renewables, so the cost is coming down and the power is going up. Now, we know that for wind, we know that for solar. And actually in solar there’s probably one more very big scientific breakthrough, which could make it even more interesting. It probably won’t reduce the cost so much, but it will make each solar panel three or four times more powerful …
RITHOLTZ: Right. We’re …
BROWNE: … so we don’t use more space.
BROWNE: You know, so if you’ve had a roof of them, you could produce much more electricity. Now …
RITHOLTZ: You — you have the same issue with battery storage also, needs another …
BROWNE: The battery …
RITHOLTZ: … breakthrough.
BROWNE: … batteries — yes, we could do a lot with existing batteries. It’s not ideal, but it would give us a good start. So lithium ion batteries clearly can be used and are used at the moment on industrial scales to store electricity. But electricity can be stored in different ways as well through making the energy by using actually a pump water up a hill and then letting the water come down …
RITHOLTZ: I’ve seen these robotic …
BROWNE: … with using bricks up and down.
RITHOLTZ: Yes, the kinetic robotic …
BROWNE: Yes, that’s it.
RITHOLTZ: … creating towers of large cement blocks.
BROWNE: It has the potential energy and they make it …
BROWNE: … kinetic energy.
BROWNE: So there’s a …
RITHOLTZ: Is that a viable storage solution?
BROWNE: People are experimenting with it and then some sensible people have invested in them, and so I think it might — you know, let’s see if it works. There are plenty of these technologies. So — but the main point, I think, is if we really push them out today, we’re not dealing, in most cases, with breakthrough discoveries, we are looking at engineering improvements.
RITHOLTZ: Incremental gains.
BROWNE: Incremental engineering improvement, which usually come only with application. So the more you do, the better you become and something, and the cost comes down both on the manufactured base and on the implementation. So that — but that’s a rule of — that’s a rule of engineering. I mean, I think it applies to virtually everything except for custom built nuclear power plants, which somehow seem to get more expensive the more you do …
BROWNE: … rather than less. Although small scale nuclear probably is the breakthrough that we all are looking for.
RITHOLTZ: Small scale, and I keep reading about Thorium reactors, which the science isn’t quite there but …
BROWNE: It’s not quite there.
RITHOLTZ: … but you don’t end up with all of that highly radioactive waste, which certainly seems attractive.
BROWNE: It — it does. I think I would not put all my bets there. I — what I would — what I — what I do think is important is, you know, what’s good for the navy is probably good for all of this. So small scale reactors built in a factory, as opposed to build on site, and come on the back of a truck and bolted together in a place where an old nuclear power plant was is probably a much cheaper way of going and building one from scratch.
RITHOLTZ: So like aircraft carriers and submarines, that size we’re talking about?
BROWNE: It could be a bit bigger but, you know, not — not — I mean, that not big …
RITHOLTZ: Not all likelihood.
BROWNE: … some of those. But — but the — the idea is roughly the same. So 100 megawatts probably is the size.
RITHOLTZ: And — and one of the things you mentioned when — both in the book and when you discussed climate change is you said you would love to be known as an engineer and a scientist. Explain your thinking there.
BROWNE: Well, I would still — I really love to be known as an engineer — period. I mean, I — I do think engineers are — are the people who look both ways in life. They look to the fruits of discovery from what happens in the lab, and they look at it and say, “Yes, we need to do something with it,” and they look to the market, on the other hand, and to call us and say, “This is how we make it work for humanity.”
And, you know, I don’t want to use one of the myriad apparent quotes from Edison, but I think he said something similar about discoveries with no markets are not worth having but — or he may not have said it. But — but — but I do think that’s why engineering is so important. It’s Janus-faced. It looks two ways and — it looks two ways in one person and creates something great for humanity. And I think that’s a really good thing to do.
RITHOLTZ: We have been speaking with John Browne, former CEO of British Petroleum and author of the new book, “Make, Think, Imagine: Engineering the Future of Civilization.” I feel odd calling you John because you are a member of the House of Lords and — and you’ve been knighted, and you have all of these British titles. I’m just a commoner here in the states, so I guess I’ll have to get used to calling you John.
There are a couple of questions I didn’t get to.
BROWNE: Can we just, if I may.
RITHOLTZ: Go ahead.
BROWNE: My dear late father always said to me, he said, “You know, whatever happens to you in the future, you were born John and you’ll always be John.” And he reminded me that he was a military man and worked for the government. He said people have very complicated titles, but actually they’re exactly the same as anybody else and never forget it.
He also told me, “So when you get to a party,” he said, you know, in Britain they all dress up with decorations, medals and things like that. He said, “Go find the person who’s wearing none of that. Chances are he’s probably the prime minister.”
BROWNE: So …
RITHOLTZ: That’s very funny.
BROWNE: … I remember that very well.
RITHOLTZ: So we didn’t get to talk about a book of yours that I thought was interesting, “Seven Elements That Changed the World,” and you discussed iron and carbon and gold, silver, uranium, titanium and silicon. I shared with you earlier this week’s “Business Week” about what they call the greatest organizational chart ever, the periodical table, and it’s really quite a work. Every element in the Table of Elements has — has a story about that.
But I have to ask about “Seven Elements.” That — that is a very sciency — material science sort of book. Tell us about what motivated that.
BROWNE: I — I wanted to write a book about the elements that I’ve been involved in and — and make it as interesting as I could, almost adventures in elements, if you will, and talk about, you know, how they appear for the good and for the bad in the world and tell stories about them, but I’ve been involved with the Kennecott Copper Corporation, which was a big gold and silver mining operation, obviously, with carbon, with silicon, with Intel. So again, it was very much a hands-on experience, and I just want to make it exciting. And I was writing, I think, for a general audience who — who never really thought about these things and thought that, you know, what are elements.
I was — I read a — a wonderful book which, which is very different and I would never dream of this by getting anywhere close to Primo Levi’s book on the periodic table.
RITHOLTZ: What — what was that — was the title …
BROWNE: It was called the Periodic Table, and it’s a Primo Levi’s ruminations on life generally.
RITHOLTZ: So some of these are pretty obvious. Iron had a huge impact on — on warfare a few thousand years ago. Carbon, obviously, anything with energy, gold, uranium, silicon. I have to ask about titanium, why did you focus on titanium?
BROWNE: It was the wildcard. I’ve been involved in the mining of titanium, not least in Richardson’s Bay in South Africa. And it — it’s one of these things, which is everywhere and nobody realizes it’s everywhere.
RITHOLTZ: Cell phones use a ton …
RITHOLTZ: … of titanium.
BROWNE: Toothpaste, white shirts, paint, it’s everywhere because it’s highly reflective and it creates that whiteness that we all like and love having, you know, white rooms and white floors and white clothes. It’s — it’s strange, it’s very much a 20th — 21st century thing.
RITHOLTZ: And — and why silver, since you have gold, what — what made you include silver as well?
BROWNE: Because silver has a — gold actually, you know, in the end, is something you mine and then you put it back into a vault. A little bit of it is used for teeth and for jewelry.
RITHOLTZ: Or at least it used to be used for teeth, I don’t know if they’re still doing that.
BROWNE: Not a lot, I guess. It’s not ceramics and things like that. But silver, of course, was used for many other things because it’s a reactive element and it was used for photography. And I used silver and photography as the — the point of connection there and the image, and how we’re so used to that now. Of course, silver — silver halide is no longer used …
BROWNE: … in photography. Well, it is, by very few people, producing beautiful results, let me say, but it’s now all digital. But silver has different rules.
RITHOLTZ: Quite, quite fascinating. There are two other things I — I have to get to which — which are fascinating. So you were still CEO — well, let me say it this way, you weren’t — we’re not CEO when the Deep Water Horizon explosion took place in the Gulf of Mexico, but you were CEO during the Texas City Refinery explosion. That had to be a very trying experience. What — what was that period like?
BROWNE: Well, it was — trying is an understatement. This was a — a — a terrible industrial accident, a tragedy where 15 people lost their lives and many hundreds were injured in different degrees, some small, some bigger.
And I remember so well what — what happened. And I was called and someone said, as they always do in an emergency, we think something is happening is not quite right. You know, and actually that’s when people observed 911 they weren’t quite sure what was going on.
BROWNE: You’re never quite sure at the beginning. And I — they — they rang me and said there’s been an explosion and I started coming down. They said, “Hold on.” So I got down, I got to Texas City to find — and I went round and there were 14 bodies recovered at the time. And I’ve never seen people so stunned. The — the workforce — I went around and inspected the whole workforce. And as we were doing that, we recovered the 15th body. And that — that, I think, demonstrated that whatever this was this was a human tragedy.
BROWNE: And those are the people we needed to worry about, their friends, their relatives. And then what happened? So at the press conference, I remember being advised by everybody to say nothing and I said, “How can you possibly do that?”
BROWNE: So I said we’re responsible and we’ll take care of this., but right now we need to worry about the people who’ve been killed and the people who have been hurt. And so we worked diligently through this and we solved it and what — where money could make a difference, we did. We sold it very quickly. We — we paid people appropriately, I believe, the terrible tragedy they’re involved in. And it was our fault, you know.
And so we — we learned to listen. And I think the lesson I learned was, you know, however you look at a — a company, you should always look at its weakest link. You can’t say it’s about right, it’s not about right when it comes to safety. And it was very clear that we hadn’t integrated this part of the company properly…
RITHOLTZ: Was — was this refinery …
BROWNE: … part of an Amoco deal, but it could have been anywhere. And it wasn’t integrated and it — and it actually had equipment in it that took too much skill to operate. You know, we should have had — and that was the problem — too much skill and the person operating it probably didn’t have enough skill, but that was really an unrealistic standard to apply. There need to be more modern equipment and we should’ve known better.
RITHOLTZ: Quite …
BROWNE: So I think that was the — the point, and it changed dramatically the way we thought about safety but really did. We prided ourselves about safety, keeping people safe. But what we haven’t really deeply got was the fact that all equipment becomes unsafe and must be looked at all times to make sure it get — stays safe, and that’s what we learned. And I think it’s what everybody now learns, it’s — it’s the big lesson of how you keep processes safe as well as people safe.
RITHOLTZ: Quite interesting. So I have to ask one last question before I get to my favorite questions, which is you’re an engineer, you’re of a large embracer of science and scientific methods. Today there seems to be a deep distrust of science, whether it’s anti-vaxxers or climate change denialists, there are even some flat earthers out there, which I’m astonished at. What are we to make of this rejection of science, which has given us all the benefits of — of the modern world?
BROWNE: People don’t trust experts, they trust people like themselves. And if there are people around who have a big loud voice, then trust goes in the wrong direction. We — we need to do more. It’s a — it’s a banal statement, but it’s true. We need to do more in education. We’ve got to get people always thinking that they need to test the facts, they need to test and go and search for the best answer. And then I think we’ll get some better appreciation of why science and engineering is so important.
So education is very important. I think we should publicize more — much more about, you know, how — how — how does engineering actually work, how does science actually create something, how do we know something is safe. Why — why is that the FDA there? You know, it was a great invention, right, the poison squad, all that sort of thing in the olden days, tremendous to create trust. So we need to re-instill with people the purpose of these organizations, the purpose of standards.
I think it’s — requires a very big effort to do that. We’ve taken it for granted. And as a result, people have ignored it.
RITHOLTZ: So the profits of the book go to the John Browne Charitable Trust. Tell us what the trust focuses on and …
BROWNE: So …
RITHOLTZ: … and the areas you’re emphasizing.
BROWNE: … so the trust started its life a long time ago in honor of my mother to educate women at Cambridge who’d come from a broken human rights background, displaced people from former Yugoslavia, for example, Hungarians who were not settled properly, the list went on.
But now it does education broadly. It tries to do the things nobody else will do. I mean, I’m — I’m not going to compete with governments and with …
BROWNE: … the MacArthur Foundation and with, you know, the — the gates and people like that. But I can do things I can fill gaps, which we do, and then it supports the arts as well.
So that’s what it’s doing. It’s building up its strength. I wanted to be around for a long time. It’ll probably — it’s got to outlive me. Of course, it does. And as a result, I’ve got some quite young trustees, which I much approve of. But it’s — it’s — it’s doing things that other people don’t do, and that’s, I think, very important.
RITHOLTZ: Quite interesting. So I know I only have you for a few minutes before you have to move on to your next event. Let me ask you some of our favorite questions we ask all our guests. We’ll start with an easy one. Tell us the first car you owned, year, make and model.
BROWNE: So the first car I owned was a Fiat 600. It was — I bought it in 1966 when I was 18. I think, by that time, it was already six years old and it kind of blew up when — on a trip to London the engine block crashed. So it was a great car, it was very cheap, and it was a great thrill at 18 to have your own car.
RITHOLTZ: Tell us who your early mentors are, who helped shape your career.
BROWNE: So in B.P. it was the late and great Dr. Frank Rickwood, a Australian geologist. He joined B.P. having been the head of the — Dean of Geological Sciences at the University of New South Wales. He’s Australian. And he clearly was a — a great influence and, you know, rigor, how do you do things rigorously, how do you actually understand to apply what you — the science and engineering to actual business problems. He was a great mentor.
I think Andy Grove, who was active on the board of Intel when I was there, also a great mentor. I learned a lot from him on how do you actually really do strategy, how do you think about competitors and what you do to survive, you know? Only the paranoid survive, and Andy taught me absolutely that that was true.
RITHOLTZ: So let’s — since you mentioned Grover’s book, let’s talk about books. What are — what are some of your favorite books? What books had a big influence on you?
BROWNE: So I have — I have so many. I — I think I …
RITHOLTZ: By the way, this is the question people tell me keep asking people up books. I get great recommendations from your guests.
BROWNE: So I — so, over the summer, I read a lot of books and — and two really stand out. The first is an English translation of a French book by Eric Vuillard called “The Order of the Day.” It’s a short book, and it starts on 20th of February 1933, when national socialism invited in the heads of all the German big companies to offer them assistance in return for support. And the story develops from there. It’s hair-raising and it’s very short and brilliantly written — brilliantly written. I can’t recommend it highly enough.
RITHOLTZ: Orders of the Day.
BROWNE: Secondly — by Eric Vuillard, V-U-I-L-L-A-R-D. It won the Prix Goncourt in French in 2017 and, in France, it’s recently been translated. I — I would expect it’s a very well written book. I would expect the French to be quite impenetrable unless you’re a very good French reader.
The other book I’ve — I — I have a friend of mine in Venice where I — I live part-time, Italy, called Donna Leon. She’s — she’s a mystery writer, a detective story writer. And she’s written the same — she’s written about the same detective, Commissario Brunetti and his family, I think, for 25 or 30 years, one book a year. Interestingly, they never age, but everybody else does around them.
She recently wrote a book which became, in my view, not — no longer a detective story but a novel called, “Unto Us a Son is Given.” Remarkable book, remarkable, worth, I think, reading for the simple reason that it’s about human frailty and about why loneliness really does get to people who cannot have a family and the consequences of that. It’s a extraordinary book actually, quite extraordinary.
RITHOLTZ: And — and this is a big issue both in the U.K. and the U.S., the rise of loneliness, which some studies have found to be the equivalent of smoking a pack of cigarette a day.
BROWNE: Exactly. And it also leads to very bad judgments because there’s nobody to bounce it off. And you can always hire people to give you advice, but the moment you hire someone, you’ve hired them, and the advice is not necessarily what you want.
RITHOLTZ: Tell us about a time you failed and what you learned from the experience.
BROWNE: So certainly the biggest failure inside my professional life with B.P. was the Texas City tragedy. I think it taught me a lot about making sure that you — you — you — you don’t take things for granted and you don’t get carried away with necessarily what people are saying. You check, you double check when it comes to things which are existential. And I — I think that was, in my mind, a very big failure — very big failure.
I think the second big failure was the errors of judgment I made with — before I was outed, both in the way in which I told a lie in a — in a witness statement, and the mere fact that I — I — in order to hide away but fell hard on escort (ph) and thought it was a relationship, possibly be. So I — I think those things were very big failures of judgment, error, and I’ve learned a lot from them. I can think of plenty of others, but they’re smaller.
RITHOLTZ: What do you do for fun when you’re not reading or writing books?
BROWNE: So I — I still have traveled for the whole of my life, you know. I was born outside the U.K. I have spent my teenage years traveling. I think I was one of the first jet set kids because I was transported back to the U.K. from Iran and Singapore to go to school. So I still like going to places I haven’t been to. I’ve been — they’re diminishing number. But I also live in Venice, Italy, where I adore it. I find it’s a — it’s such an unlikely place. It’s a floating city, very sensitive, very extraordinary.
People say killed by tourists, I don’t agree. The tourists, they come in and they leave. And in the morning and the evening, Venice (issuers). And — and who — who are we to say that people can’t see what we enjoy. We can’t do that.
RITHOLTZ: Very much threatened by climate change.
BROWNE: Very much threatened by climate change. There’s a big barrage being built and very complex piece of engineering. It should hopefully be ready next year or the year after.
So I enjoy those sorts of things. I enjoy making sure my — you know, keeping fit. And I enjoy — but most of all, I enjoy the arts so I’ve been — you know, I’ve been the Deputy Chairman of the British Museum, Chairman of the Tate Galleries, and I am Chairman of the Courtauld Institute of Art. I adore those activities. I adore the theater. I’m Chairman of the theater group called the Donmar Warehouse Theater.
And I adore the opera. I always go to festivals like the Salzburg Festival set-up by, you know — not set -up but — but made, of course, the headlines when Karajan was alive. I saw some fantastic productions ever in my life on this — particular this summer.
So — and I enjoy people. I — I have always think — my late mother always said to me, it’s very important to talk to people and the best way to talk to people is invite them for dinner. And she said, “And here’s what you do. Number one, it’s most important to have the right people — interesting people and a mix. Number two, have a great table. And by that, make it look beautiful. Number three, have great wine. And number four, maybe have some food.” She said in that order, you can have a great time.
RITHOLTZ: That — that sounds like some — some good advice. Speaking of advice, if a recent college grad came to you and said they were considering a career in the energy industry, what sort of advice might you give them?
BROWNE: I would say go into the energy industry because there are so many challenges still to be solved. We have to replace energy. Over the lifetime of a new graduate, you know, the energy mix will change dramatically. So it’s a — energy is, of course, the most important motor of civilization. Without energy, nothing can be done.
I know people look at their iPhone and say, gosh, it’s working in here. Actually, it’s working in the cloud and the cloud is tons and tons of hardware using a vast amount of electricity. And so remember that’s what we need and that’s a very important part of civilization.
RITHOLTZ: And — and our final question, what is it that you know about the world of energy today that you wish you knew 50 years ago when you were first starting out?
BROWNE: The environmental impact. I wish I knew more about the environmental impact when I started. I — I could see a bit of it. I — I kept wondering why, you know, when I — when I was working in Alaska, you could — you flew in by helicopter and — or plane, and you could see tracing off the — on the permafrost when it melted in the summer. And that was because people had just dragged equipment across the permafrost without protecting it. And, in some cases, actually dynamited, you know, bits of it and so they’ve made big ponds. I always wonder why people did that.
And I remember also learning a lot when we know the Trans-Alaska Pipeline System was not built for both environmental and native rights. And it was only passed eventually with a lot of compromise in these areas — correct compromise with Spiro T. Agnew casting the vote in the Senate. I remember that very well because we were waiting around in Anchorage, Alaska, the North Slope and in New York waiting for approval to — into our business.
And at one point, there was almost no money to pass …
BROWNE: … that is quite interesting.
RITHOLTZ: Quite, quite fascinating. Thank you so much, John, for being so generous with your time.
We have been speaking with Sir John Browne, former CEO of British Petroleum and author most recently of “Make, Think, Imagine: Engineering the Future of Civilization.” If you enjoyed this conversation, well, be sure to look up an inch or down an inch on Apple iTunes and you could see any of the previous — let’s call it 260 or so — such conversations we’ve had over the past five years.
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I would be remiss if I did not thank the crack staff who helps put together these podcasts each week. My Audio Engineer this week is Nicholas Falco. My Producer is Michael Boyle. Our Project Manager is Atika Valbrun. My Head of Research is Michael Batnick.
I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.