It’s profits season again. In 2022, big oil companies pocketed $134 billion as energy price rises pushed millions into poverty. Now, after the hottest year in human history, the extremists in the oil industry are frittering away their windfall in a $100-billion riot of cash handouts to shareholders and get-rich-quick fossil fuel schemes.
The supermajors have never been so flush with cash. It’s the perfect opportunity to invest in clean energy. Instead, they used their profit announcements this week to hand over money to shareholders and invest in more of the dirty fuels that are heating the planet and making millions poorer.
Shell announced that it paid its shareholders an extraordinary $23 billion in 2023, more than eight times what it spent on its so-called Renewables and Energy Solutions, while emissions from its oil and gas production grew 4 percent.
BP‘s payout to shareholders was 50% higher than their average payment, and at $12.7 billion would cover the cost of the UK’s climate disasters for the next seven years. TotalEnergies’ payment to shareholders would more than cover the €10 billion in damages caused by French storms in 2022 – storms made more likely by the very oil and gas Total sells.
In the US, behemoths ExxonMobil and Chevron gave their investors $58 billion. They also want to spend a combined $112 billion purchasing other oil and gas producers last year. Should the deals get US government approval, their combined emissions will balloon by more than 20 percent, emitting more carbon annually than Brazil, Australia, and Spain combined.
This is a brazen wealth transfer from energy consumers to oil and gas investors. The supermajors are not just rejecting the scientific consensus, they are escalating their assault against the 31 million displaced in 2022 by climate disasters, and against the millions they’ve pushed into energy poverty. Their greed is dragging us ever faster into a world of unbearable extremes that threaten our food, energy and healthcare systems, leaving electricity bills hostage to world events.
Despite pushing governments to spend billions on oil and gas imports to offset Europe’s reliance on Russian fossil fuels post-Ukraine, there has been little price respite for consumers. Some two million households in Britain face being cut off this winter. Electricity prices remain punishingly high.
We know what we need for achieve a safer, healthier, fairer future – emissions from oil and gas must be reduced to net-zero by 2050 and need to fall a daunting 42 percent this decade. To do this, we need to ramp up investment in green electricity, energy efficiency, while rapidly phasing out fossil fuels.
Instead, Shell decided last year was the perfect time to row back on its climate pledges, slashing some 200 green jobs and reneging on a plan to reduce its oil output. BP, which is under pressure from some investors to ditch its green spending plan, also watered down its own emissions pledges. BP’s emissions increased 3% in 2023, and they’re forecast to rise again by 5% this year.
By doubling down on oil and gas, the supermajors are denying us the indisputable economic benefits of clean energy spending. Investment in renewables creates more jobs than equivalent spending on fossil fuels, lowers energy bills, and provides infrastructure more resilient to market shocks.
Every dollar spent on oil and gas is a missed chance to invest in cleaner, cheaper energy sources. These companies could have taken advantage of cheaper-than-ever wind and solar power to make a genuine contribution to the climate fight.
They could have used their vast cash stockpiles to provide relief for families struggling to stay warm, by boosting investment in green tech such as batteries and solar panels, and reducing reliance on imports from petrostates. At the very least, they could have spent the money on cracking down on leaks of methane, the most potent greenhouse gas.
But they didn’t. Nor do they plan to. Despite countries agreeing at the end of 2023 to “transition away” from fossil fuels, the five majors are all planning to increase their oil and gas production.
Protest groups such as Extinction Rebellion and Just Stop Oil have been labelled “criminal” and “extremist” by politicians for calling for the end of the fossil fuel era. In the United States and elsewhere, some have even been investigated as terrorists.
While the science tells we need a rapid phaseout, oil companies and their shareholders are intent on profiting from their toxic oil and gas for decades to come. Scientists, environmental groups, and energy consumers who want a fair deal are not criminal extremists. Oil bosses are.
Mike DavisChief Executive Officer