Shell’s Profits Surge Despite Climate Crisis: Plans to Increase Investment in Oil and Gas
Oil giant Shell has reported soaring profits of £11.6 billion ($14.8 billion) for the first half of this year, while new analysis reveals the company’s intention to ramp up its investment in oil and gas. This comes amidst a climate emergency and a week marked by devastating wildfires and scorching heatwaves across the Mediterranean, resulting in numerous deaths.
According to Global Witness’s analysis of data from Rystad, Shell’s investment in oil and gas projects for 2023 is projected to skyrocket to £11.3 billion, representing a 10% increase from the previous year. The company’s spending in these industries is expected to rise by another 7% next year, according to Rystad’s predictions.
In stark contrast to this intensifying climate crisis, Shell’s spending on renewable energy solutions pales in comparison. The company’s recently unveiled strategy estimates that it will allocate only between £1.6 billion and £3.1 billion to renewables and energy solutions in 2023.
However, there is a problem with Shell’s categorization of renewables and energy solutions as it includes both genuinely renewable energy projects, such as solar and wind power, and non-renewable initiatives like carbon capture that do little to combat climate breakdown.
Last month, Global Witness estimated that Shell’s decision to reduce its climate targets could result in an additional 29 million tonnes of carbon emissions per year, nearly equivalent to Denmark’s annual emissions. By 2030, Shell’s additional estimated emissions could reach levels comparable to Spain, one of Europe’s largest polluters, in just one year.
Jonathan Noronha-Gant, Senior Campaigner at Global Witness, criticized Shell’s actions, stating, While the planet burns, Shell is making billions in profits, paying massive dividends to its shareholders, and increasing its investment in oil and gas. This is a company that acknowledges the urgency of the climate crisis. And yet it has reversed its climate commitments and reinforced its reliance on harmful fossil fuel energy.
Fossil fuels are at the forefront of climate breakdown, fueling extreme heatwaves, wildfires, and droughts. Every home destroyed, every town evacuated, and every ecosystem lost to wildfires is a direct consequence of Shell’s business model, which prioritizes short-term profits over the safety and survival of our societies.
Millions of people in Europe and around the world are already suffering due to Big Oil’s inaction on climate change. If governments continue their affinity for fossil fuels, millions more will endure these consequences. Our generation faces a defining choice – whether to support a dying and destructive industry or pivot towards a greener, cleaner future.
Rystad, a leading energy data firm, has provided estimates for Shell’s oil and gas investment. Meanwhile, Shell forecasts that its spending on renewables and energy solutions for 2024-2025 will range from £3.1 billion to £3.9 billion, with potential dilutions of £0.6 billion to £1.6 billion, resulting in a net annual spend of approximately £2.3 billion. Detailed information can be found in Shell’s Capital Markets Day presentation for June 2023.
During its Capital Markets Day in June, Shell also made a notable U-turn on its commitment to reduce oil production by up to 2% annually until 2030.
