They’re not energy companies – they’re fossil fuel companies

The largest 'energy' companies earn their multimillion-dollar profits from fossil fuels, while revenues from renewables are minimal or non-existent.
ExxonMobil reported record profits of $55.74 billion in 2022, up 142% from the previous year. Foto: REUTERS/Dado Ruvic.

If Marty McFly and Doc were to travel from the past to spring 2023, they’d think that the Delorean had gotten the date wrong; it’s just too hot for this time of year. But thermometers don’t lie. Spain and several Mediterranean countries registered heat in April that would be “almost impossiblewithout climate change, as an attribution study recently indicated. The same specialists found that the period of extreme temperatures endured by several South Asian regions was at least 30 times more likely the result of global warming. The situation is the same across the world.

At this point, it is worth pointing out who bears the highest responsibility for bringing the planet and climate into unknown territory for humanity. Although there are many human activities that impact global warming, there are two that are its greatest contributors: deforestation and, above all, the burning of fossil fuels

The companies that do business with coal, oil and gas are collectively referred to as “energy companies” – but that’s nothing more than a euphemism to sweeten the reality. And, as the economist and author of the IPCC Julia K. Steinberger wrote in Climática, “This is a crucial point to understand: fossil fuel companies are not energy companies. They are fossil fuel companies.”

Although many of these companies are, little by little, moving their business towards cleaner energy sources, like wind and solar, their history, their evolution, their profits, their successes – everything, in short – is inextricably linked to fossil fuels, primary culprits of the current climate chaos. Moreover, to this day, the majority of the multimillion-dollar benefits that these companies receive come from the extraction of hydrocarbons.

Energy companies, with record profits

The boom in fossil fuel prices experienced since the start of the war in Ukraine has filled the coffers of these companies and, in particular, those of their oil and gas businesses. The end of 2022 left record profits for almost all companies of the sector around the world, as will be shown below.

Beyond the numbers, almost all companies in the sector share a common denominator: they have renamed themselves “energy” companies because they have incorporated some degree of renewable sources. However, they continue to operate primarily as oil and gas companies. This is demonstrated in their financial reports, which also tend to hide or mix in revenue from renewables with revenue from other sources. 

Ultimately, as illustrated below, fossil fuels have been and continue to be at the core of billions of euros earned each year. As each company organizes its business in different ways, some figures are conservative. The profits derived from fossil fuels are likely higher than reported.

  • ExxonMobil. The American oil giant does not hide its cards – though in the 1970s the company did hide its precise knowledge of how global warming would affect the planet. In 2022, ExxonMobil announced historical earnings of $55.740 billion, 142% more than the previous year. Every dollar earned was generated by fossil fuels: $36.479 billion in exploration and exploitation of resources, $14.966 billion in “energy products” (oil refinement) and $3.543 billion in petrochemical products. This makes clear that all of Exxon’s profits for 2022 came from energy sources that have caused an increase of around 1.2ºC in the planet’s temperature since the pre-industrial era.
  • Shell. Last year the company reported revenue of $381.314 billion and record profits of $39.87 billion (an EBITDA of $84.289 billion and total revenue of $381.31 billion). Of this amount, exploration and exploitation of fossil fuel deposits is the largest contributor ($17.319 billion), followed by gas ($16.137 billion) and chemical  products ($4.719 billion). These alone account for more than 95% of the company’s revenue, a percentage that may in fact be higher as some components are not fully detailed. For example, Shell earned $1.745 billion for “renewable energy and energy solutions.”
  • Chevron. The second largest producer of petroleum in the United States also made record profits of $35.465 billion last year, 127% higher than in 2021. According to the company’s annual report, 100% of profits came from fossil fuels: $30.284 billion from the exploitation of fossil fuel deposits, and, especially, through gas extraction – and the rest from fossil fuel product refinement.
  • TotalEnergies. The French petroleum registered an adjusted net operating result of $38.475 billion (33.77 billion euros) in 2022, double that of the previous year. According to its operating report, almost all the company’s profits are concentrated in the production of fossil fuels and petrochemical refinement and production: $12.144 billion for “gas, renewables and power;” $17.479 billion for exploration and production (all fossil fuels); $7.302 billion for “refining and chemicals”; and $1.550 billion for “marketing and services.” The EBITDA (earnings before taxes and interest) from renewables operations was $565 million, a low figure when compared to the 71.578 billion euros of the total EBITDA.
  • Saudi Aramco. The income statement of the largest oil company on the planet holds no surprises: its business is completely fossil fuel-based. The company’s EBIT (earnings before interest and taxes) in 2022 was $306.512 billion. Of the total, $291.313 billion correspond to the exploration and exploitation of fossil fuels, and $21.145 billion from their refining and distribution. In regards to its net income, the Saudi company reported profits of $161 billion, up 46.5% from 2021, without specifying its lines of business. Aramco’s only “sustainable” initiative is the development of low-carbon intensity fuels. The company’s CEO, sultan Ahmed Al Jaber, will be the next president of the Climate Summit (COP28) which the United Arab Emirates will host at the end of the year.
  • Gazprom. The Russian state giant is another company that bases its business exclusively on fossil fuels, specifically gas and oil. The company has not published financial statements since the invasion of Ukraine. However, the Centre for Eastern Studies published a data series showing the impact of the European Union restrictions. The company produced 20% less gas in 2022 than in 2021. Even so, it would have made total profits of $37 billion in the first half of the year alone. In 2021, the Russian gas company earned $141.506 billion, of which $28.723 billion were attributed net earnings, 15 times higher than in the previous year.
  • BP. The British oil company, which popularized the concept of “carbon footprint” at the beginning of the century, has been the flagbearer of the energy transition. But its financial report tells another story. Of BP’s EBITDA of $60.747 billion, $21.03 billion are related to gas and other “low carbon businesses” (including solar, wind, hydrogen, marketing, and biofuels) and $26,171 billion to oil exploration. Another $13.659 billion are associated with other products, the majority of fossil fuel origin. Taking underlying profit into account, BP brought in $16.063 billion from gas and low carbon businesses, 20.224 billion from oil and $10.789 billion from Castrol-related products, petrochemicals and refinery products.
  • Equinor. The Norwegian state oil company Equinor reported revenue of $150.806 billion, some 65.9% more than in 2021. Of this total, the extraction of crude oil accounted for $58.524 billion, natural gas $65.232 billion, refined products were $11,093 billion, and liquefied natural gas $9.24 billion. Renewables alone (compared to other energy) reported revenue of $185 million. Therefore, Equinor had revenue from fossil fuels of at least $144.089 billion, more than 95% of the total. The remaining 5% correspond to areas such as transportation and “other sales,” which are mostly related to hydrocarbons. In terms of net operating income, the company reached $78.800 billion: $67.614 billion from the exploration and production of fossil fuels in Norway, $3.248 billion from international deposits, $4.022 billion from business in the United States, and $3.622 million from “marketing, transport and storage.” With regard to renewables, Equinor reports losses of $84 million. 
  • EDP. The Portuguese energy company is smaller, but its activity is worth reviewing since it is one of the few in which renewables have a real weight. The company generated 849 million euros of profits through the distribution of electricity and gas (it does not specify how much from each source). Its renewable subsidiary, EDPR, registered a profit of 671 million, mainly through hydroelectric, wind, and photovoltaic production.
  • Repsol. The company that emits the most greenhouse gases into the atmosphere in Spain obtained an adjusted net result of €6.661 million. In its earnings report, the company divides its businesses into exploration and production, industrial, commercial and renewables, and corporate and others. The first two sections refer exclusively to the company’s extractive and petrochemical activities, i.e. its fossil businesses. Adjusted net profit from exploration and production was 3.029 million, and industrial profit was 3.150 million. In other words, almost all of Repsol’s profits come from fossil fuels. The “commercial and renewables” business reported an adjusted net profit of 540 million.

This story is also available in Spanish with an analysis of Spanish fossil companies.

Translation by Anna Oakes.

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  1. […] Juan F. Samaniego and Eduardo Robaina, Climática. This story was originally published by Climática, and is republished here as part of Covering Climate Now, a global journalism collaboration […]

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