Source: Capital and Main
Excerpt:
The oil company CEO was practically giddy, she was so excited about its record earnings. On a call with shareholders and analysts on March 31, Occidental Petroleum’s Vicki Hollub bragged that the century-old oil giant was hitting new production records at its drilling sites in the Rockies, helping it build “the strongest foundation for free cash flow generation in Oxy’s history.”
The boasting highlighted an incredible run for the industry: Five of the biggest — U.S. giants ExxonMobil, Chevron, Shell, and TotalEnergies, plus British giant BP — more than doubled their profits in 2022, with a cumulative profit of $200 billion, much of that in cash or cash equivalents. To illustrate the resurgence of the sector, Chevron and Exxon together are sitting on $48 billion in such assets, compared to $10 billion in early 2021.
The surge in oil and gas profits is made possible in part by generous financing from banks, which provided $673 billion to the fossil fuel industry last year, according to the annual Banking on Climate Chaos report, authored by nonprofits including the Rainforest Action Network and the Sierra Club. Overall, the share of bank finance going to renewable energy rather than fossil fuels has hardly changed in the last six years.
Banks lending to oil and gas companies insist that it’s necessary given global energy needs. And while there is a growing divide within the banking world over whether to continue financing fossil-fuel projects, only one major global bank — France’s state-owned La Banque Postale — has committed to halt financing oil and gas companies by 2030. Recently, HSBC, the seventh largest bank in the world, announced that it will no longer finance new oil and gas projects, though it will continue to finance existing projects. And a number of more climate-conscious “green” banks such as Germany’s GLS Bank quit the Net-Zero Banking Alliance in protest over its decision not to impose stronger restrictions on fossil-fuel financing.
Read more: Banks Continue to Put Billions Into Oil and Gas — Is It a Smart Investment?
