The world’s largest fossil fuel companies are thriving across the world, enjoying a new wave of investments in oil, while the world is facing a full-blown climate crisis. From Shell to Exxon to Chevron, all big players had record profits last year, which shows the industry is still going strong, contradicting countries' "green" rhetoric.
Let’s start off with Shell. The company reported profits of almost $40 billion last year. This is double 2021’s total and the highest in its 115-year history -- a truly momentous record shareholders can be pleased with. T
Over 40% of Shell’s earnings came from its gas business unit. Fossil fuel companies such as Shell are turning strongly to gas in recent years as a transition fuel from coal -- the worst fossil fuel in terms of greenhouse gas emissions. For Shell’s CEO Wael Sawan, the 2022 results show the company’s capacity to deliver energy in a “volatile world.”
This has triggered the anger of some politicians, unions, and campaigners in the UK, where the company has its headquarters, claiming to be outraged by the profits amid the soaring energy prices.
Responding to the profit announcement, Greenpeace targeted Shell’s headquarters. They set up a mock petrol station price board outside the HQ in London, displaying the annual profits in pounds. The campaigners are asking Shell to take responsibility for its historic role in the climate crisis and pay for the environmental damage of its actions.
“Shell is profiteering from climate destruction and immense human suffering. While Shell counts their record-breaking billions, people across the globe count the damage from the record-breaking droughts, heatwaves and floods this oil giant is fuelling. This is the stark reality of climate injustice,” Greenpeace Elena Polisano said in a statement.
Exxon also reached a full-year record profit despite a bad last quarter. The company earned nearly $59 billion in profit in 2022, up from $23 billion in 2021 and well above the previous record of $45 billion it reported in 2008. If you do the math, Exxon made more than $6 million in profit every hour last year and over $100,000 per minute.
CEO Darren Woods said the company “clearly benefited from a favorable market” due to the high prices of energy amid the Ukraine war, claiming the company’s US refineries had their greatest output ever, and that it had its highest global refinery production since 2012. “We leaned in when others leaned out,” he said in a statement.
Last but not least, there’s Chevron, with a record full-year profit of $36.5 billion. This is more than double the $15.6 billion the company reported in 2021 and 36% more than its record from 2011. Investments in operations increased over 75% from 2021, and the annual US production rose to the equivalent of 1.2 million barrels of oil per day.
We just can’t have more fossil fuels
Almost 60% of the planet’s known reserves of oil and gas have to stay on the ground in order to give the world a 50% chance of limiting global warming below 1.5 degrees Celsius (2.7 Fahrenheit), according to a 2021 study. This means global oil and gas consumption would have to decline by about 3% every year through 2050 to meet that target.
However, our use of oil and gas is not slowing down. In fact, it’s increasing. Global oil supply rose by 4.7 million barrels per day last year, according to the International Energy Agency. The increase is expected to continue this year, mainly from China. BP’s latest annual energy outlook expects the use of 93 million barrels of oil per day in 2035. That’s a lot of oil.
Then comes gas. A report last year predicted that natural gas will keep on growing for decades and peak in 2037. We just don’t have that much time to address the climate crisis. The industry from Exxon to Chevron to Shell has ambitious plans to expand, especially in a group of countries from the Global South, where oil and gas are still booming.
Governments, campaigners, and even the United Nations have asked for higher taxation on fossil fuel companies. The EU and the UK have taken the first steps, imposing windfall taxes on companies’ profits and using the money to help people with their rising energy bills. But this alone doesn’t do the trick, we also need a more ambitious transition to renewables.