If by some miracle you had a great 2022, you’re not alone. At least two of the world’s biggest oil corporations thoroughly rocked last year. In fact, for ExxonMobil and Chevron, 2022 wasn’t just a good year—it was the best one ever.
ExxonMobil posted record-eviscerating annual profits for 2022, with a $55.7 billion windfall revealed in the fossil fuel giant’s final quarterly report for the year on Tuesday. Previously, the company’s highest profit was $45 billion in 2008, making 2022’s net earnings nearly a 25% increase on the past record.
Chevron, too, netted its largest profit ever, as reported to investors last week. The oil company raked in $35.5 billion, eclipsing its previous 2011 record of $29.6 billion.
The massive earnings more than make up for losses incurred in 2020, at the beginning of the covid pandemic, and are no surprise. Both companies had record profitable quarters during 2022, and the annual budgets Exxon and Chevron released in December signaled peak cash flow. However, the dramatic magnitude of profit jump over previous years is alarming, considering that we need fossil fuel companies to be rapidly withering, not achieving new heights, if we’re to avoid the worst consequences of climate change.
So why are Exxon and Chevron doing as well as they are? In part, it’s because of global conflict. Sanctions against Russian fuel following the country’s invasion of Ukraine have made oil and natural gas extra-hot commodities. Even though the real available oil supply in the U.S. didn’t change much, OPEC and corporations responded to the uncertainty with sky-high prices, reflected in the high costs U.S. consumers were paying at the pump last year. To try to counteract that burden on drivers, the Biden Administration has been releasing record amounts of oil from the U.S. stockpile.
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Though now, after a drop, prices are creeping up once again. In November, President Biden accused Exxon, Chevron, and other fossil fuel firms of war profiteering, artificially inflating prices and benefitting from the global energy crisis brought on by the war in Ukraine. Biden threatened oil companies with windfall profit taxes in response. At the time, that seemed an unlikely solution because of a lack of congressional willpower, but perhaps that might change now that the scope of Exxon and Chevron’s winnings are on display.
Unfortunately, President Biden simultaneously encouraged fossil fuel companies to boost production—which is counterproductive for the climate and doesn’t actually address the outsized profits.
On top of record profits, Chevron posted record levels of U.S. oil and gas production according to their investor report—exemplifying that the price issue isn’t simply one of reduced supply. Exxon, too, noted increased production at the end of this past year compared with 2021 and the previous 2022 quarter—pumping out an average of 3.74 billion barrels of oil daily.
Both Exxon and Chevron have made big claims about reducing their “carbon intensity” and focusing on “low carbon solutions.” But each of these terms is little more than corporate word salad meant to distract from the fact that these companies continue to extract climate-altering fossil fuels.
On top of lining investors’ pockets, Chevron and Exxon have also outlined plans to continue spending their massive profits on further greenwashing efforts, and to further expand production of oil and gas in the new year. Meanwhile, in a 2021 report, the International Energy Agency said new fossil fuel development needed to stop yesterday, for the sake of keeping our planet a pleasant place for humans. At this rate, oil companies are on track for another banner year already. The rest of us? Not so much.
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