Fuel on the fire: why oil companies are profiting as the world gets dangerously hot
The scientific consensus is that burning fossil fuels drives the climate crisis, yet the world’s biggest oil companies are planning to increase production
As the world swelters in ever more dangerous heat, why are oil companies being allowed to turn up the gas instead of paying for the consequences of their greed?
That ought to be the question on everyone’s minds amid baking heat domes over much of the northern hemisphere, temperature records being smashed day after day, children dying in locked cars, hospitals filling with heatstroke victims and emergency services tackling wildfires.
There is no doubt that oil, gas and coal companies already bear a disproportionate share of the blame yet have a financial incentive to further disrupt the climate. These perverse incentives will continue unless their generous government subsidies are replaced with windfall taxes.
There is an overwhelming scientific consensus that the more fossil fuels are burned, the hotter the planet will get. The latest attribution study concludes that the “most severe and widespread heatwave to have ever affected this large a region of Europe” could not have happened without human-caused climate change.
Yet Big Oil is planning to make a bad situation worse, because more fuel burning means bigger bucks. A recent surge in profits, thanks to high oil prices driven by wars in the Middle East, including Iran, is going to be followed by a splurge in investment in new wells.
A new analysis shows petroleum companies are racing one another to extract more oil and gas from the ground. Shell, ExxonMobil, Chevron and seven other publicly listed firms aim, on average, to increase production by 14% between 2024 and 2030, according to the TPI Global Climate Transition Centre at the London School of Economics and Political Science (LSE).
More fuel is the last thing an already overheated world needs. It pushes the planet in the opposite direction from the goals set by the Paris climate agreement, to which many of these companies promised to align themselves. To limit global heating to between 1.5C and 2C by 2100, oil output needs to fall this decade. The current planned expansion is much worse than the International Energy Agency’s gloomy business-as-usual scenario, which envisages a 5.9% increase in oil and gas production this decade, leading to a catastrophic 2.9C global temperature increase by the end of the century.
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The IEA could not have put this more clearly: to align with the Paris agreement’s goal of keeping global heating well below 2C, there can be no new long-term oil and gas exploration or development projects.
So why do fossil fuel companies plan to pump more than ever? Because their executives are forced to operate in a different universe, where the ethical compass is set to maximising shareholder value rather than maintaining the habitability of the planet. To maintain this perverse situation, investors and supporters in the media have grabbed power and changed the global climate debate.
Six years ago, the petroleum business was on the defensive. Greta Thunberg and climate strikers were marching against fossil fuels on streets around the world. Opec bosses warned these protests were the “greatest threat” the industry had ever faced because oil executives were being challenged by their own children in their own homes. Momentum was growing for change. Numerous governments had set net zero decarbonisation targets. Financial institutions committed themselves to more ambitious environmental governance targets.
Add all of this up – higher oil prices, shifting boardroom priorities, state capture, political cover and an injection of cash to fill the streets with far-right anti-net zero campaigners rather than youth climate strikers – and you have all the ingredients for the petroleum industry to pump ever more fuel on to the global fire. A perfect storm for ever more extreme storms.
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With a new El Niño now confirmed – and forecast to be one of the most severe in decades – this is folly on a globally calamitous scale. The Amazon is bracing for more fire and drought, without having time to recover from the devastation of the last El Niño, which saw usually clear forest skies turn the smoky grey of an industrial town, led to the drying up of some of the world’s biggest rivers, and resulted in the mass deaths of dolphins and other animals.
The polar regions will see more melting of the snow and ice that normally reflects solar heat back into space. And other vital elements of Earth’s life-support system will approach dangerous tipping points. Catastrophic consequences are becoming ever more likely.
It never had to be this way and it does not have to be this way in the future. Values have to change. Incentives need to shift. Fossil fuels, which were for long so beneficial to humanity, have to be recognised as poisons. And petroleum companies must pay for backtracking on their promises and putting shareholder dividends ahead of planetary health and human wellbeing.
theguardian.com
