Fossil Fuel Profits Skyrocket as World Leaders Set to Gather at COP28

Oil and gas companies have announced their third quarter profits, and they’re rocketing above $50 billion. After a slump in earnings in the second quarter, the fifteen industry players we’ve been tracking since last year are earning stratospheric profits again. These oil and gas majors are also doubling down on fossil fuel expansion and leaving investments in the energy transition in the dust. 

As a part of our series tracking Big Oil profits, here’s the latest snapshot of what 15 oil and gas companies operating in the U.S. earned for the third quarter of 2023:

Just weeks before the close of the quarter, Exxon announced a merger with Pioneer Natural Resources in a deal valued at nearly $60 billion. Soon after, Chevron announced that it would acquire Hess Corporation in a deal worth $53 billion. As a result, both Exxon and Chevron will increase their production and presence in the Permian basin straddling Texas and New Mexico, with Exxon more than doubling its Permian operations. Rumors are already stirring about ConocoPhillips and other oil and gas majors expanding their Permian Basin operations on the heels of Exxon and Chevron. 

Just days after Chevron’s acquisition of Hess, a Reuters exclusive reported that ConocoPhillips was considering an offer to acquire CrownRock LP, which owns about 86,000 net acres of the Permian basin in Texas. Diamondback Energy, Marathon Oil, and Continental Resources, were also considering bids to acquire CrownRock LP. This market consolidation by oil and gas majors is deeply unsettling. Brown University Professor Jeff Colgan writes that deals like the Exxon acquisition of Pioneer Natural Resources could undermine democracy itself by creating even more opportunities for Big Oil to engage in lobbying and climate misinformation campaigns against climate action and the renewable energy transition in the United States. 

At the same time, Big Oil spent billions to continue extracting fossil fuels, the latest finding by climate scientists paint an increasingly dire picture of our future on Earth. The United Nations Environment Programme (UNEP) has just released its 2023 Emissions Gap Report, which examines the gap between current and estimated greenhouse gas emissions and the reductions needed to achieve limit warming to 1.5 degrees Celsius, the goal of the Paris Climate Agreement. The report’s “Key Messages” explain that, 

A world with 3 degrees Celsius of warming would be nothing short of apocalyptic. Other analyses are equally concerning. In the United Nations Environment Programme’s (UNEP) 2023 Production Gap Report, analysts estimate that global production of fossil fuels is expected to more than double the acceptable amount to meet 1.5 degrees Celsius of warming by 2030. Industry investments in more production, the extremity of 2023’s climate-driven extremes, and the plethora of scientific studies finding us on the verge of dangerous climate tipping points continue to clarify one point: it is past time for a global reckoning on fossil fuels. The world is careening toward climate oblivion, and fossil fuel executives continue to rake in profit while world leaders stand by and watch it happen.

The upward trend of fossil fuel production is alarming in the lead up to the United Nations Framework Convention on Climate Change’s (UNFCCC) 28th Conference of the Parties (COP28) in the United Arab Emirates. These UN climate negotiations will spotlight the world’s ambition to phase out fossil fuels and feature the first “Global Stocktake,” a review of where the world stands on climate action. The European Union, a bloc of twenty seven countries, has approved its negotiations strategy for COP28 centering on a call to phase out “unabated fossil fuels.” Ten of these countries reportedly wanted a strategy that called for a complete phase out of fossil fuels. 

Nonetheless, the success of this call will depend on the willingness of major fossil fuel producing countries, like the United States, Saudi Arabia, Russia, and the United Arab Emirates (the host of this year’s negotiations). As the biggest producer of oil and gas in the world, the United States, in particular, has a key role to play in advancing plans to phase out fossil fuels.

That’s a major challenge as U.S. oil and gas companies continue to earn sky high profits while being propped up by billions of dollars in taxpayer subsidies. Meanwhile, oil and gas executives don’t believe the claims of our best available science and modeling stating that demand for oil and gas consumption will peak in 2030. 

The CEO of Pioneer Natural Resources said to the New York Times, “I personally disagree, the majors disagree, OPEC disagrees, everybody that produces oil and gas disagrees.” 

The energy transition is not about personal opinion, it’s about what is scientifically necessary and where the renewable energy transition should be at the turn of the decade. A lot of work is needed. In the U.S., we have the power to do a great deal today to start limiting production of fossil fuels, including:

• Finalize the Bureau of Land Management’s onshore oil and gas rule and begin phasing out fossil fuel leasing on federal lands
• Block permits for liquified natural gas (LNG) export projects like Calcasieu Pass 2 (CP2)
• End public financing of fossil fuels internationally
• Defend actions to limit Arctic fossil fuel development
• Stop the Dakota Access Pipeline
• Revoke permits for the Mountain Valley Pipeline and the Enbridge Line 3 and Line 5 pipelines
• Cancel scheduled offshore drilling lease sales
• Make companies pay for the true cost of developing the fossil fuel industry in our public waters

At this critical juncture, countries most responsible for continuing to feed global fossil fuel dependence must commit to ambitious plans to phase them out. At the same time, we need to responsibly expand renewable energy and electrify our economy. Failure to do so will come with environmental and economic consequences that we are not prepared to meet and that we must, to the greatest extent possible, avoid. 

Humanity’s survival depends on action.