Global oil giants such as Exxon, Chevron, Shell and Saudi Aramco are ramping up investments in oil and gas production for record profits while cutting spending on green energy projects.
Companies are effectively refusing to comply with international climate agreements, causing carbon emissions to continue to rise, reports Babel.
It is noted that in 2022 the world leaders in oil production were Saudi Arabia, Russia, Iran, China and the USA.
Oil production is likely to increase in the coming years, despite global climate agreements. According to forecasts by the Stockholm Environment Institute, it will reach 35 billion barrels in 2025, which is 5 billion barrels more than needed to keep global warming at 1.5℃. In 2050, this indicator may reach 40 billion barrels, although according to international climate agreements it should fall to 7-15 billion barrels per year.
Red line: current forecast for global oil production. Blue: production needed to keep temperature rise at 1.5℃. CREA
Franziska Holz, an analyst from the German Institute for Economic Research, explained that oil prices rise along with the standard of living in different countries. Thus, in the countries of Southeast Asia and Africa, the level of well-being is increasing and more and more people are buying cars. In developed countries, especially in densely populated China and India, the demand for plastic, diesel fuel and gasoline is growing along with the "middle class".
The article emphasized that simultaneously with the increase in demand for oil, investments in green projects are falling. In particular, due to the increase in the cost of the production chain, as well as delays and disruptions in production. Thus, during 2020-2022, the price of polysilicon – the main element of solar panels – tripled. Due to the confrontation between the United States and China, in particular, the closing of American markets to Chinese manufacturers, SPPs in the United States have become three times more expensive.
In addition, due to the Russian-Ukrainian war, the costs of wind turbines increased, and their production at the three largest Western manufacturers became unprofitable. After all, both countries supplied the world market with a lot of steel, which is used to make turbines. Because of the war, supplies decreased, and the price, accordingly, increased.
It is noted that in 2022, the global oil and gas industry invested about $20 billion in renewable energy, which is only 2.5% of the total volume of their investments. To meet the goals of the Paris Agreement, companies would have to invest half of all capital expenditure.
The material emphasized that the great demand for oil allows Russia to receive large oil and gas profits despite the sanctions . In September 2023, its export revenues amounted to $18.8 billion, which is the highest monthly figure since July 2022. Although the sanctions hit Russian oil and gas revenues hard, they did not work very well. The Russians were helped by a shadow fleet of tankers and attractive low prices for Russian oil. Some traders simply ignored the price limit of $60 and sold Russian oil at $70 per barrel.
According to the estimates of the International Energy Agency, after 2030 the demand for oil will fall, and with it – oil and gas profits. Therefore, the strategy of oil companies may turn out to be short-sighted.
Earlier, EcoPolitic wrote, that the head of the European Climate Fund (ECF), Professor Laurance Tubiana, stated that through diplomacy and propaganda Russia is trying to harm the green transition of Europe and is sabotaging international climate negotiations.
As EcoPolitic previously reported, Europe's largest oil company Shell PLC secretly abandoned its climate plans regarding spending $100 million a year on carbon credits. Also, starting in 2024, it will cut hydrogen projects and 200 jobs in the low-carbon solutions department.
