This is largely a statement that would have been true at any point over the last century or so, but: the oil industry is killing it. Recent years have seen record-shattering profits, major projects and expansions like Willow in Alaska continue to garner permits and approvals, and major new oil and gas plays like those in Guyana, Mozambique, and elsewhere are expanding the field even further. At major energy events, oil executives take victory laps, almost bubbling about their continued dominance.
This week, it continued: ConocoPhillips announced its second quarter beat expectations, with $2.3 billion in earnings; Shell pulled in $6.3 billion, also beating projections with 25% more profit than the same period a year ago; BP earned $2.8 billion in Q2, also eclipsing its expected return; and you can bet when ExxonMobil’s earnings are announced on Friday, the numbers will not be small.
[Update: ExxonMobil reported Q2 earnings of $9.2 billion, again beating expectations and exceeding last year’s Q2 by 17 percent. CEO Darren Woods said the company produced more oil than at any point since Exxon and Mobil merged. That was in 1999.]
The question is, why are oil companies thriving? Why, in a world where essentially every reasonable country, politician, voting bloc, and certainly scientist has now long agreed on the need to stop burning fossil fuels, why has the world barely even attempted to slow the villains’ blob-like expansion?
The short answer is money, obviously — the products they sell are still worth a lot and still account for around 80 percent of global energy use, and the companies are more than willing to keep throwing their own cash around to help keep it that way. But why the level of deference still seen even in countries ostensibly trying to push themselves and the world toward net-zero, why the assumption that because [hand wave] capitalism, we have to treat them like upstanding members of society? Why is Shell treated like a morally equivalent entity to, say, Costco?
(A quick aside/example: Oil markets expert Dan Dicker recently joined MSNBC’s Chris Hayes to talk about Biden “broke OPEC” with some savvy oil trades, and casually threw in how Biden simultaneously wanted to “protect those oil companies to make sure that they remain profitable.” Why is this an equivalent priority?)
If we truly accepted the reality here, governments would be ushering these companies toward the door. The constant argument in their favor is “we’re not going to stop burning fossil fuels tomorrow.” Sure. But why does that mean they have the same capitalistic carte blanche as any other company or industry? We — people, societies — can make the rules!
The logical, politics-free answer would be that every government on earth would nationalize the industry with the explicit and statutory goal of ending it — set timelines not just for emissions and solar capacity, but also for limits on oil extraction and use. Literally schedule an end date for ExxonMobil and Chevron and the like; they had decades to pivot and chose the exact opposite path, salting the earth for anyone else’s idea of a transition to a cleaner world. Fuck ’em.
I recognize this is not a likely turn of events. Countries that do currently have nationalized oil industries use them quite vigorously to make money, and almost universally plan to expand that money-making operation (Colombia may qualify as an outlier here). It is more of a thought experiment than anything else: in a rational world, what would befall the oil industry?
There are signs, of course, that the more general climate picture is turning for the better. Solar power and battery storage are exploding in ways that are beating even some of the rosiest predictions, various states and other countries have begun to pass laws that effectively limit fossil fuel extraction and use, and legal challenges against Big Oil are scattered throughout the global courts at this point. Of course, the companies have their own tools to fight back, often absurd international loopholes like investor-state dispute settlements, where the Exxons of the world can sue governments for ruining their fossil fuel fun — and often win. One step forward, one step back — in the end, those profit numbers that roll in reliably every quarter don’t lie.
This is among the biggest sources of cognitive dissonance one can find in the world today: climate change is the existential threat of our time, says every reasonable politician, and the idea of doing the most impactful possible thing about it is not even on the radar. It’s not that the Overton window hasn’t shifted enough, it’s that the window isn’t even a part of the right building.