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.

On Tuesday morning, oil giant ExxonMobil announced it made almost $56 billion last year — larger than the gross domestic product of more than 100 nations. Add in Chevron’s 2022 profits, reported last Friday, and the oil industry’s haul eclipses the annual economic output of countries like Guatemala, Tanzania, Bulgaria or Luxembourg. Start tossing Shell, BP, Total and other oil majors on the pile, and your imaginary country would break into the ranks of some of the world’s richest.

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.

“They’re the most powerful industry in the world,” said Richard Wiles, president of the Center for Climate Integrity, an advocacy organization. “Climate change policy hasn’t affected them in any way, in any place, anywhere, in any meaningful way.”

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.

2021 study found that almost 60 percent of the planet’s known reserves of oil and gas need to remain in the ground in order to give the world just a 50 percent chance of holding global warming below 1.5 degrees Celsius (2.7 degrees Fahrenheit), which would help stave off some of the more catastrophic climate change impacts. The study also found that global oil and gas consumption would need to decline by about 3 percent every year through 2050 in order to meet that target, which was the more ambitious goal internationally agreed upon in the Paris Agreement. The Global Carbon Project has calculated that the world has less than nine years on its current emissions trajectory before 1.5 degrees becomes inevitable.

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

The world’s oil supply grew by 4.7 million barrels per day in 2022, according to the International Energy Agency. The rate of growth will slow somewhat in 2023, but the supply will still increase by a predicted 1 million barrels per day. Demand is set to rise globally by 1.9 million barrels per day, to an all-time high of almost 102 million barrels of oil per day. Half of the increase will come from China, which saw a decline in oil demand in 2022, by a modest 3 percent, with a sharp rebound expected this year. Oil giant BP’s latest annual energy outlook trimmed its projection for global oil consumption in 2035, but it still sees the use of 93 million barrels per day, compared with around 100 million today — not even close to the 3 percent per year drop needed.

The consulting firm McKinsey predicted in 2021 that natural gas use will continue to grow for years, only peaking in 2037. That’s well past that nine-year deadline and decades beyond when overall oil and gas use needs to be shrinking, rather than growing, in order to even sniff at climate targets. The war in Ukraine has changed the numbers somewhat, with the IEA now saying growth in gas consumption will be muted through 2025. But it will still grow by 140 billion cubic meters, or around the annual output of the seventh biggest gas producer, Australia.

And the oil majors are not resting on their laurels. Reports suggest that virtually the entire industry has plans to expand in the coming years. Exxon, Chevron and the rest have their sights set in particular on a number of countries in the Global South, where another round of oil and gas booms are getting underway.

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.

With new discoveries popping up seemingly all the time in the region, the industry has huge plans for the Guyana offshore play. In total, there are well over 11 billion barrels of recoverable oil, according to the Guyanese government. ExxonMobil says it will be producing one million barrels every day in Guyana by 2030, which experts warn will put the country at high risk of environmental catastrophe. With 30 wells already producing, a consortium led by ExxonMobil that also includes Hess and the Chinese company CNOOC aims to eventually have an additional 63 offshore wells online.

“The regulatory environments are easier, the public opposition is harder to organize — although in every country where this is happening, people in those countries are fighting back against the development both in the courts and in the streets,” said Carroll Muffett, president and CEO of the nonprofit Center for International Environmental Law.


The argument in favor of countries like Guyana going whole hog on unearthing oil and gas reserves is economic development — only, the deals the government has made seem like boons for the industry instead. The International Monetary Fund, the World Bank and other outside observers have criticized the “one-sided” nature of the deal between the Exxon-led consortium and the government; last year, Guyana pulled in about $1 billion from that deal. While the country’s GDP is rising rapidly thanks to its newfound oil wealth, that income is still well below what the industry standard would dictate. There are no apparent plans to try and renegotiate.

Guyana is not alone in facing such a rush to massive oil and gas expansion. Also in South America, having failed in a decade-old attempt to pull in payments to not drill for oil, Ecuador is now expanding that drilling further into the Amazon rainforest. A report released during the United Nations climate talks in November showed that over 200 oil and gas companies are currently exploring new projects across Africa. While traditional hydrocarbon powerhouses like Nigeria continue to expand, newer rushes in countries like Namibia, the Democratic Republic of the Congo and Mozambique are also growing rapidly.

“The projected emissions of two of the biggest gas projects in northern Mozambique are equivalent to seven years of France’s emissions,” said Anabela Lemos, a Mozambican climate activist. “If all this planned fossil fuel investment in Africa goes ahead, we have no chance to stop the climate crisis.”

Recent discoveries have placed Lemos’s home third among African countries in terms of total natural gas reserves, with over 100 trillion cubic feet. Along with oil majors like France’s Total, the U.S. Export-Import bank is among those sending billions in loans to build up liquefied natural gas infrastructure there.

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.”

“We must fight against the neocolonial scramble for African fossil fuels,” Greenpeace Africa head of communication Mbong Akiy Fokwa Tsafack told Grid. “Restricting the operations of oil and gas companies means protecting the ecosystems that many of us call home and which many more of us depend on.”

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.

Most notably, the Glasgow Financial Alliance for Net Zero (GFANZ), a consortium of hundreds of banks and other financial firms across dozens of countries, took shape in early 2021. At the U.N. talks in Scotland later that year, the group announced that “over $130 trillion of private capital is committed to transforming the economy for net zero.”

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.

report from Reclaim Finance and other groups released this month found that 56 of the members of the Net-Zero Banking Alliance, a GFANZ subgroup, have provided almost $300 billion to fossil fuel companies just since joining the group two years ago. As of September 2022, 58 of the biggest members of another subgroup, the Net-Zero Asset Managers initiative, still held more than $800 billion in fossil fuel company stocks and bonds.

Another new analysis released by several environmental groups this month show that between 2016 and 2022, around 93 percent of the trillions in energy funding from 60 of the world’s biggest banks went to fossil fuels, while only 7 percent went to renewables. The two largest funders, JPMorgan Chase and Citi, spent just 2 percent of more than $180 billion in energy funding on renewable energy over that period. Notably, those banks are members of the Net-Zero Banking Alliance.

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.”

There is clearly some pressure for the financial industry to adjust this trend. For example, shareholders of six major Wall Street firms recently pressed JPMorgan Chase, Bank of America and others to phase out their fossil fuel funding. The New York City comptroller also joined major pension funds in calling for American and Canadian banks to disclose greenhouse gas emissions targets for 2030 and lay out concrete plans for achieving them.

But so far, at least, that pressure is not producing the needed results. The world will need close to $100 trillion in climate-friendly investment by 2030 to meet global targets, according to the World Bank — money that, it is crucial to note, will be repaid and then some by avoided impacts, new jobs and industries, and more. But that economic message has yet to proliferate, especially across political divides, and there are only so many dollars to go around.

Say anything, do something else

All this money and momentum driving oil and gas development is accompanied by an ever-changing landscape of public relations and propaganda. The industry has long abandoned outright climate change denial, instead focusing on centering itself as “part of the solution.” Visit ExxonMobil’s corporate website and “climate solutions” and “sustainability” are both menu options right at the top. Chevron says it is “advancing a lower carbon future.”

But mix in the enormous flows of money with the industry’s clear expansion plans, and it’s hard to imagine these promises meaning much of anything. A yearlong investigation by the House Oversight Committee — an avenue of inquiry now shelved by new GOP leadership — revealed a host of internal communications and plans that lay bare the industry’s promises for the greenwashing they are. Chevron plans to “continue to invest” in fossil fuels as competitors retreat; BP executives claim the company has no obligation to cut greenhouse gas emissions if it would cut into bottom lines; internal guidance at Shell instructed employees, “Please do not give the impression that Shell is willing to reduce carbon dioxide emissions to levels that do not make business sense.”

“For years, oil and gas companies have lied and deceived to maintain a broken energy system. As families and businesses struggle to afford energy and basic goods, these companies are making profits,” said Vanessa Nakate, a UNICEF Goodwill Ambassador from Uganda and founder of the Rise Up Climate Movement. “It is hard to wrap your head around the scale of this injustice.”

This month, a study looking back at Exxon’s history of climate denial found that the company’s scientists made eerily accurate predictions of future warming dating to the 1970s — as good or better than academic and government scientists managed. The company then spent the subsequent decades publicly casting doubt on climate science. That campaign unquestionably played a role in bringing the world to its current dire state — and bringing the company to its 2022 windfall.

Even in the face of that study and the House Oversight evidence, the oil industry continues to make grand claims about its march toward a zero-carbon future and has managed to worm its way deep into the international climate effort. After an Egypt-led round of U.N. climate talks in 2022 was at least somewhat marred by the oversized presence of oil and gas lobbyists, the United Arab Emirates has taken over as host for 2023. The Middle Eastern petrostate promptly appointed Sultan Al Jaber, CEO of the Abu Dhabi National Oil Company, to run the conference known as COP28, sparking widespread criticism.

“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.”

In the U.S., industry front groups are working a new battlefield in the propaganda wars, spreading the notion that natural gas — made primarily of methane, a greenhouse gas significantly better at warming the planet than carbon dioxide — should qualify as “green energy.” A bill with that language recently passed in Ohio has connections to the state’s largest bribery scheme ever and may have been only a warning shot in that battle.

The companies themselves are also continuing to spread their PR wings. Chevron runs a website called Permian Proud, ostensibly a news source to “showcase the local residents and organizations” in the Permian Basin in west Texas and New Mexico — an area sitting atop one of the largest proven oil reserves on the planet. (Currently leading the “industry” subsection: “Petroleum Hall of Fame announces its 2023 inductees.”) The company funds a similar publication based in California called the Richmond Standard, in a city where a Chevron refinery is the biggest employer; both are outlets that look like any other reasonably unbiased source of local news to an average reader.

Chevron in particular has also done its best to spread its industry-first message through more reputable sources. Last year Houston’s NPR and PBS affiliate Houston Public Media (HPM) came under fire when it released a video — the first of 10 in a series, since canceled without further episodes released — ostensibly about the “energy transition” but filled with soft-focus sunset-drenched images of oil rigs, featuring interviews with oil executives and industry-friendly talking points. The series was sponsored by Chevron, and was clearly labeled as such, but was sent out alongside the public media outlet’s other content as if it were regular programming on a topic of substantial public interest.

“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

The recap of all this is not pretty: The globe’s most powerful industry is making more money than ever, expanding like a slime mold into every corner of the globe it deems profitable, pulling in billions or trillions in financing from banks and funds that have promised to stop that flow of dollars, and working harder than ever to spread false messages about its plans — all while the world burns.

But it is still possible to find some bright spots within the rapidly spreading metaphorical oil slick. A new analysis from Bloomberg NEF contrasted with the GFANZ data, showing that the world spent a record $1.1 trillion on the “low-carbon energy transition” in 2022, an amount that, for the first time, matched fossil fuel investments for the year. The International Energy Agency says that global renewable energy capacity will grow by 2,400 gigawatts between now and 2027, an amount equal to China’s entire power supply today. The U.S., still the world’s second-biggest emitter of greenhouse gases after China, passed its most ambitious climate-related legislation ever last year in the Inflation Reduction Act, featuring $370 billion in clean energy and efficiency funding.

“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.”

There are also now a raft of legal cases against oil companies aiming to hold them accountable for the increasing damage climate change is unleashing. These will likely drag on for some years, but so far the industry counterarguments have failed at several levels of U.S. courts. Wiles, whose organization supports the efforts to hold oil companies accountable, said that he expects the legal efforts to succeed eventually, through one avenue or another.

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.”