Throughout 2023, the hottest year in recorded history, fossil fuel giants doubled down on their planet-heating business models.
The moves flew in the face of oil and gas companies’ promises to tamp down
their emissions and prioritize cleaner forms of energy. It is evidence they are “unfit to have a role in the energy transition”, said Collin Rees, the US program manager at Oil Change International.
Oil majors have over the past several years announced seemingly ambitious climate plans. BP promised to cut its fossil fuel investments by 35 to 40%. Shell pledged to reach net-zero carbon emissions by 2050. Exxon, meanwhile, said it would slash its emissions and gas burning and touted its investments in algae as a potential carbon-free fuel. Chevron announced an “aspiration” to reach net-zero upstream emissions by 2050. And dozens of oil companies signed onto an initiative to cut their methane emissions.
But in 2023, firms took actions that stood in sharp contrast to those plans.
“Companies have gotten more brazen about their plans to keep polluting,” said Rees. “They took the mask off.”
In October, ExxonMobil agreed to buy the shale group Pioneer Natural Resources, and Chevron announced plans to acquire the Texas oil company Hess – two of the country’s largest oil and gas deals in decades.
Both mergers are being investigated by federal regulators for potentially impeding competition. And both amounted to Exxon and Chevron placing vast bets on a continued future for fossil fuel production in the US, despite scientific consensus that coal, oil and gas must be phased out to avert the worst consequences of the climate crisis.
Fossil fuel companies reneged on their previous climate promises earlier in the year, too. BP scaled back its emissions-slashing goal from 35% by the decade’s end to a 20 to 30% cut, while ExxonMobil quietly walked back funding in algae-based biofuels and Shell announced that it would not increase its investments in renewable energy in 2023.
A major reason for the change in tack was a shifting market, experts say. As fossil fuels were becoming less profitable years ago, companies announced plans to diversify their business models. But gas prices surged after Russia invaded Ukraine in 2022 and fossil fuel companies saw record profits.
The US as a whole extracted more oil and gas than ever before in 2023. And globally, fossil fuel companies invested twice as much in oil and gas as they should, if they wanted to avert catastrophic levels of heating, the global energy watchdog International Energy Agency found last month.
“They have left no doubt that their pledges were deployed for cynical political purposes, only to be ditched when they no longer suited the industry’s strategic position,” Dan Cohn, global energy transition researcher at the Institute for Energy Economics and Financial Analysis, told the Guardian in July.
after newsletter promotion
Rees said he hopes the industry’s behavior in 2023 dispenses with the idea that small tweaks to energy policy can deliver necessary climate action.
“Hopefully this makes clear that it’s not enough to tinker around the edges with some small regulations, because left up to their own devices, this is how the industry acts,” he said.
There may now “finally” be room for larger conversations about how to “manage the decline of the industry” in ways that don’t leave the industry in charge of its own fate, he said.
“That potentially includes things like cutting off finance flows to the sector and also taking public control of the companies,” he said. “I think the industry fully owning this villain role can hopefully allow our champions to step up and recognize what’s needed.”
