Record 2022 profits show the oil and gas industry remains strong as climate change worsens

The world’s oil and gas companies enjoyed record-breaking profits in 2022, as energy prices soared for consumers and climate change catastrophes dotted the globe.

The industry’s triumphant year wasn’t a surprise, with reports throughout last year highlighting an industry in an orgy of profit and prosperity. But it highlights how oil and gas companies are thriving even as climate change impacts accelerate and worsen, a reassertion of dominance that is leaving fingerprints everywhere. Oil production in many parts of the world is set to increase in the coming year: A handful of developing countries are in the midst or on the cusp of truly massive expansions of oil and gas extraction, international finance continues to flow to oil and gas companies at obscene levels even as promises to the contrary proliferate, and the industry continues to push the boundaries of public relations and propaganda in a constant effort to delay what is widely now considered an inevitable departure from fossil fuels.

The oil industry is a notoriously volatile one, and the energy shocks emanating outward from Russia’s invasion of Ukraine helped pave the way for 2022′s monumental windfall; more lean years could easily follow. But last year’s profits are just one indicator of the enduring strength of an industry that would, in a rational world intent on addressing climate change, be on its way out.

Expansion as the window closes

The global carbon budget refers to the amount of greenhouse gases humans can emit before the world will inevitably cross certain temperature thresholds, raising the risk of catastrophic and spiraling impacts. These deadlines are rapidly approaching.

Meanwhile, global use of oil and gas is not slowing — it’s increasing; no one of import seems to have gotten the memo.

From Guyana to Mozambique, the new gold rush

Off the coast of the small South American country of Guyana, an ocean of oil lies underneath the actual ocean. ExxonMobil is already drilling up 360,000 barrels of oil every day; other companies bring the total up to 400,000. And there is much, much more to come.

There is ample local resistance to these expansions, though there is little indication the opposition is making a dent. At the U.N. climate talks in November, one activist from Kenya said the Global North is treating Africa like a “petrol station.”

Muffett said the massive infrastructure build outs that will accompany the new production has a secondary purpose beyond the windfall of each new barrel of oil. “What the industry is really looking to do here is not only expand production, but just as importantly, and maybe more under the radar, is create a new dependence within the Global South on fossil gas, that didn’t previously exist, that is going to is going to lock in those markets for another generation.”

Dollars still flowing

Then there’s the money.

Oil companies are behemoths, but even they continue to need cash from the world’s major financial institutions in order to keep developing projects. In recent years, there have been hints that those institutions were finally thinking about turning off the spigot.

That number isn’t quite as substantial as it sounds. It doesn’t mean that five times the GDP of the United States is suddenly flowing to solar power plants, just that firms with a lot of zeros on their balance sheets have signed on to a globally popular concept without any notable enforcement mechanism behind it.

Meanwhile, they’re still funding oil companies.

The never-ending quest for more funding, more subsidies, more financial leeway will, eventually, have a breaking point, said Muffett, of CIEL, but the damage wrought in the meantime can be catastrophic. “Will it be enough to save the industry? No. But is it enough to sacrifice the climate on our present course? Absolutely.”

Say anything, do something else

“Can we just end the COP now? I mean, what’s the point?” asked Wiles, of the Center for Climate Integrity. “If the oil guys are running it, it’s just over, you’re not getting anything out of that. Forget it, done, over.”

“It’s outrageous,” Robert McChesney, a professor emeritus of communication at the University of Illinois and author of several books on the media, told Grid last summer. “I mean, I don’t know how else any credible journalism institution could regard it.”

HPM insisted at the time of the video’s release that Chevron “had no editorial oversight” over the content, but hundreds of emails obtained by Grid through a public records request — HPM is part of the University of Houston and thus subject to Texas public records laws — show a collaborative process where the oil giant had input into logos, taglines, interview subjects and even interview questions and the series outline. HPM has since said they would reform their sponsored content processes to avoid such blatant conflicts in the future.

“[The industry is] just very aggressive and very smart about the way they run disinformation campaigns,” said Wiles. “It’s all just a lie because they have no intention to be a part of the solution.”

A matter of pace

“If you look in the energy sector, renewables are now outcompeting not just new-build fossil fuels, but increasingly, new-build renewables are cheaper than existing fossil fuels,” Muffett said. “So that is good news.”

Even some of the more grandiose PR maneuvering might have some positive effect, if examined from the right angle, Muffett told Grid. That includes, perhaps surprisingly, the UAE’s appointment of the oil executive to run the U.N. climate talks.

“This is a public relations coup for the oil and gas sector,” he said. “But I think it comes with the consequence of maybe having played their hand too publicly. Because for anybody who’s not part of the oil and gas sector, when you look at it candidly, I think what it says is the UNFCCC” — the U.N. body that runs the climate talks — “has fallen to an absolute nadir. It is now so captured that the prospects of actually getting real action out of the UNFCCC are increasingly limited.” That could be why there is growing attention on investors and financial firms, and on the legal challenges to industry. “We go after the money. We go after accountability in the courts.”

The problem, though, is one of timing and pace: An oil and gas industry thriving as it did in 2022 is not one with a foot out the door, and every ton of CO2 and fraction of a degree of warming will cause that much more widespread misery and hardship. And the industry won’t stop until it is made to.

“It’s kind of like sharks. They’re not really thinking. It’s just like, where’s the seal? I gotta kill it,” Wiles said. “That’s what they do. That’s what these guys do. And that happens to be a thing that’s driving the Earth to potential catastrophic outcomes never even conceived of in human history.”