Branson: Behind the Mask (17 page)

To improve Virgin’s image through the War Room, Branson transferred Jean Oelwang, a Virgin marketing executive in Australia, to London to manage his charity, Virgin Unite. The symmetry between helping the poor and saving the planet was, in Branson’s opinion, natural. Oelwang explained that her purpose at the War Room was to ‘really drive business as a force for good in the world’. A similar role was assigned to Sean Cleary, a former South African diplomat who represented the white apartheid government between 1970 and 1980. Subsequently, Cleary represented the South African government in the regime’s wars against the liberation armies in Namibia and Angola.

Branson was good at recruiting idealists. Claire Tomkins,
an engineer specialising in clean-energy technology, accepted his offer ‘at a moment in time when we all believed we would get an agreement in Copenhagen’, she said. ‘It was a supercharged atmosphere.’ But Tomkins was under no illusion about Branson’s motives: ‘Richard was looking for interesting deals out of the War Room. He was looking for money.’ Shah and Bradford were partners in his quest. ‘Many environmentalists’, Bradford believed, ‘are myopic. They act out of a false paradigm that earning money from innovation is a conflict of interest with the environment. They put their faith in bad solutions. They suffer from a perception gap about getting a good return on environmental energy-saving measures. You can make millions and simultaneously help the climate.’

Branson tasked the new team to provide a tub-thumping speech for him to deliver in Copenhagen. He wanted a theme that deflected attention from the aviation industry’s culpability. Jigar Shah suggested shipping. The industry admitted producing 250,000 tons of carbon every year, or about 3 per cent of annual emissions. ‘The shipping industry has no incentive to improve,’ Shah told Branson.

The International Maritime Organization, Shah discovered, had meticulously collected data showing the carbon footprint of 60,000 individual ships. In Shah’s plan, to be explained by Branson in his speech, the IMO’s data would be published on the War Room’s website. ‘We’ll put ships of the same weight side by side,’ continued Shah, ‘and show which ship is emitting more carbon than another ship of the same weight.’ By comparing every ship’s carbon emissions, charterers would be encouraged to reject the contaminators. ‘We’ll send a shock wave through the industry.’ This new territory, Branson agreed, would grab the delegates’ attention. It was so simple. ‘This is exciting and sexy,’ added Shah. ‘We’ll be catalysts, creating an irreversible momentum. We will prove that capitalism can solve
climate change.’ Artlessly, he added, ‘This is the easiest one to pull off.’

In full flight, Branson stepped on to the podium at the Copenhagen headquarters of Maersk, one of the world’s biggest shipping groups. ‘The shipping industry’, he said, enjoying the possibility of denouncing his hosts, ‘is just as big a polluter as the airline industry, if not more. But they’ve managed to keep under the radar and have done almost nothing about their carbon footprint.’ Shipping, he said, should be subject to a global tax on emissions. Thanks to the War Room’s database, charterers could force the industry to change. With a smile acknowledging the applause, he stepped down to accept congratulations from the delegates.

One man in the audience was outraged. Peter Hinchliffe, the IMO’s secretary general, condemned Branson’s speech as ‘dismissive and aggressive’. Hinchliffe had previously accused Peter Boyd of misinterpreting the IMO’s data, but he had been ignored. As Branson mingled with the audience in the auditorium, he was introduced to Hinchliffe.

‘You’re completely wrong in everything you said,’ Hinchliffe told him. ‘You’re not giving the true picture. You can’t compare ships as if they were all Boeing aircraft. Even if two ships are the same weight, you can’t compare a tanker and a container ship. Every ship is a different trade and type, and has different safety requirements. So the energy consumption varies.’ Branson fell silent. ‘And we’re already doing a lot,’ added Hinchliffe, listing the industry’s initiatives.

‘I didn’t know anything about that,’ stuttered Branson, who Hinchliffe believed ‘seemed quite shocked’.

‘And why are you attacking us?’ continued Hinchliffe. ‘Shipping emits 3 per cent of the world’s carbon and carries 90 per cent of the world’s trade. Planes emit 4 per cent and carry only 10 per cent. You’re not telling the true story.’

Branson shuffled away, promising to ‘look at everything’.

Travis Bradford was not surprised by the exchange he had witnessed. ‘Branson’s very good at raising awareness,’ he said, ‘even when he doesn’t understand what we are saying.’

The exchange delighted Jigar Shah. ‘We’re completely disrupting the shipping industry,’ he chortled. ‘They’re completely pissed off.’

To Hinchliffe’s disappointment, Branson did not live up to his assurance. ‘It’s become impossible to work with the Carbon War Room,’ he reported to his members. ‘Branson pulled a stunt, got good publicity, but they’ve got no influence.’ On reflection, he asked rhetorically, ‘And why is Branson lecturing shipping, considering all the energy his planes use?’ He was baffled when Branson subsequently wrote, ‘We have gathered a tremendous amount of support for our vision of a low-carbon shipping industry.’

The contradiction was highlighted by questions to Branson during the conference. One year earlier, Branson had supported a global tax on aircraft to reduce carbon and had criticised those who resisted his campaign. But in Copenhagen he somersaulted. Like all airlines, that year Virgin Atlantic was fighting for survival. A global tax on emissions, he told the delegates, was ‘unrealistic’. Airlines, he said, should be exempt, otherwise they would be ‘taxed out of existence’. He even joined those demanding that carbon trading be removed from the agenda.

The inconsistencies reflected Branson’s fixation with the price of oil. About one-third of an airline’s costs is jet fuel, and after the oil price spiked at $147 a barrel in July 2008, Branson feared that the world’s economy was doomed. His airlines and his lifestyle were threatened. Searching for culprits, he placed the blame on a cartel of oil traders who were secretly rigging the prices. He had no evidence of a conspiracy, but at the time Branson was preoccupied by price-fixing. Virgin had just confessed to
manipulating the Passenger Fuel Surcharge, so his conflation of oil prices, renewable fuels and cartels was understandable. In his reliance on Will Whitehorn, Virgin’s media supremo, for facts, he was unaware of the unique circumstances causing the oil-price spike: namely, thanks to America’s new environmental laws there was a shortage of special oil products, which coincided with China’s high demand for those same goods in anticipation of the 2008 Olympics. By relying on the peak-oil illusionists, Whitehorn also apparently omitted to tell him that every official inquiry in Washington had failed to discover hard evidence that the oil market was artificially fixed.

After the Olympics, oil prices fell below $100 a barrel, and in September 2008 Branson did an about-turn. Visiting Lisbon, he explained that the economic crash had changed his philosophy. ‘I think a real collapse of oil prices is possible at this time,’ he said with relief. ‘Maybe back down to $56 a barrel.’ One month later, he somersaulted again. Cheap oil was anathema to environmentalists convinced that governments should be compelled to embrace renewable energy. Virgin’s task force on fuel prices, chaired by Whitehorn, predicted that a ‘peak in cheap, easily available oil production is likely to be hit by 2013’. Branson fell into line. He joined the chorus predicting oil prices of $200 a barrel by 2010, and even announced the creation of Virgin Oil – his plan to build a £1 billion refinery to supply aviation fuel. This was pure fantasy. Faced with a surplus of refining capacity in Europe, the major oil producers were selling or closing their plants. Investing in a new refinery was far beyond Branson’s finances.

On the same day in September 2009 that Branson urged business leaders from over fifty countries meeting in London that recovery from recession ‘must be environmentally sustainable, moving away from the excesses of the Industrial Revolution to a new future based on protecting and valuing our natural resources’, he flew on his Falcon to New York to attend that
year’s Clinton Global Initiative. (At least three scheduled flights departed every hour from Heathrow to New York.) He was met by staff from the War Room.

Their idealism was evaporating. The financial crisis had destroyed the evangelism espoused by Claire Tomkins and other campaigners. ‘Everyone is in shock,’ Tomkins declared. ‘What can we do next? Whatever, it will be a long slog.’ Looking at Branson’s team, she decided, ‘It’s the end of euphoria. There are too many defeats and negative rhetoric against climate change. We can’t run any campaigns. It’s too hard to raise money. At the beginning we’d been told that they would be raising tens of millions of dollars, but that hasn’t happened. It was the inflection point.’ The War Room was to be shrunk. Its income from the trustees had fallen from $5.5 million to $1.1 million and its losses stood at $2.5 million. She and others decided it was time to leave. By then, Travis Bradford had also left. ‘Nothing new was launched,’ he said about an organisation struggling to survive. ‘They were looking for the next big thing to grab attention and build momentum.’ Four years later, the War Room had still failed to find a new ‘big thing’.

In 2010, oil prices did not hit $200. Branson postponed the ‘apocalypse’. In another report, he now predicted that the oil crunch would occur in 2015. His warning of a world without oil was endorsed by Sir David King, the British government’s former chief scientist. King pronounced in 2010 that the world’s oil reserves had been exaggerated by 33 per cent and that by 2014 demand would exceed supply, causing shortages and price spikes. To support the doomsayers who claimed peak oil was just four years away, Branson published the
Virgin
Review
of
the
Environment.
The ‘proof’ was provided to him by experts including Jeremy Leggett, a manufacturer of solar panels who predicted an oil crunch within five years. Helped by Virgin publicists to appear on BBC TV’s
Newsnight,
Leggett argued on
Branson’s behalf that the only alternative to oil’s gradual disappearance was renewable energies and, particularly, solar panels – produced by himself.

To promote the accelerated use of renewables, in December 2010 Branson jetted to the World Climate Summit in Cancún. Unusually emotional, he told his audience that oil prices would soon hit $200 and never fall. The world’s reliance on oil, he continued, would cause the American unemployment rate to rise to 15 per cent. ‘The next five years will see us face another crunch – the oil crunch. Our supplies of oil and natural gas are being rapidly depleted.’ Governments and business, he urged, needed to switch rapidly from oil to renewable energy. ‘Just do it,’ he pleaded. ‘For God’s sake. Get off your arses and get on with it.’ If governments failed to do more, he predicted, the world would suffer an ‘unbelievably painful’ economic slump. ‘We’re going to have the mother of all recessions if we don’t sort out our energy policy fast.’ To his audience, he was a crusader. Encouraged by their response, Branson added an attack on the world’s shipping companies as ‘culprits’ for emitting ‘one billion tons of carbon dioxide every year’. He won applause by demanding that shipping be instantly taxed to encourage them to cut their emissions by 25 per cent over the following twenty years. Pertinently, he forgot Hinchliffe’s reprimands and side-stepped the IMO’s statistics stating that emissions were a quarter of his assertion, while taxes on air travel were not even mentioned.

Beyond the media and supportive audiences, Branson was struggling. He and Whitehorn had set themselves up as leaders of the environmental campaign in Britain but their forecasts were unconvincing. ‘Because we’ve been believers that the possibility of peak oil is real,’ Whitehorn said, ‘we’ve been investing in diversifying our businesses. That’s why we’ve become one of the UK’s largest long-distance train operators.’ In reality, Virgin Trains started in 1992, long before Branson’s interest in the
environment. ‘We’ve also been investing’, continued Whitehorn, ‘in new aircraft types, which are more efficient, and we’re looking at issues such as carbon composites.’ The choice of materials used to manufacture planes was beyond Virgin Atlantic’s influence. The small British airline had no option other than to lease aircraft offered by the two principal manufacturers. Whitehorn’s opinions, he discovered, were disregarded in Whitehall. The Department of Energy, he complained, ‘ignores not just our conclusions but our very existence’. Both Branson and Whitehorn wrongly assumed that Virgin’s admission of participation in the cartel to fix the fuel surcharge had been forgotten.

Rebuffed by civil servants, Branson once more appealed directly to the prime minister. He urged David Cameron to prevent oil traders from speculating and, through price-fixing, being ‘allowed to make large sums at the expense of us all’. Prices, he said, were artificially increased by 30 per cent. ‘I think there should be strict rules set as to how much trading can be done in the oil market,’ he wrote. ‘Billions of dollars is being traded on oil futures which is falsely pushing up the price of oil.’ He provided no evidence to support his allegations. On the contrary, the proof gathered in America showed that the oil market was too diverse to manipulate, except for brief moments in unusual circumstances.

The disconnect between Branson’s convictions and reality could be explained by his lifestyle. Cocooned on Necker, travelling on his private jet among like-minded billionaires, he was isolated from the wider debate. His predictions of an apocalypse were contradicted by the facts: the West’s demand for oil was falling; new supplies had been found in Brazil, Kazakhstan and Iraq; and with new technology additional oil was being extracted from existing wells. ‘Peak demand’ for oil was more likely than a peak in supplies. Rising oil prices were caused not by shortages or speculation by traders but by OPEC, the cartel of the
world’s major oil producers, who daily limited the amount of oil produced to protect the high prices. Oil’s politics and technology were a foreign language to Branson. Simplicity was his credo: the inevitable end of oil would be followed by the era of renewable fuels.