Oil companies profiting from a sick planet is obscene

Mark O'Connell at his very best in the weekend edition of The Irish Times.

No one should miss this article. How long more will the people of the world allow this to go on? Only one word to explain the profits they are making, obscene.

The calculus could not be more simple: if it’s bad for humanity, it’s good for the oil industry. This year, after the US and Israel started a war with Iran and caused one of the most serious supply disruptions in the history of the oil market, many of the world’s largest fossil fuel companies recorded massive increases in profits.

In August, the Guardian published a report detailing the huge windfalls enjoyed by major oil companies as a result of the conflict and the closure of the Strait of Hormuz. In the spring quarter of this year, the first full financial quarter after the war began, eight of the largest companies in the sector – among them BP, Shell, ExxonMobil, Chevron and the state-owned Saudi energy giant Aramco – almost doubled their combined profits compared with the same period last year. Throughout that quarter, these companies made some $93 billion in profit, or almost $700,000 (€620,000) every single minute.

Aramco recorded the largest increase in profits, a 34 per cent leap above the same period last year, despite the damage caused to its infrastructure by Iranian and Houthi missile strikes. According to the group Carbon Majors, which traces emissions to the organisations and states that produced the fuels, Aramco is allegedly responsible for more carbon emissions than any company in history.

Gigantic war profits

It’s worth recalling what else was happening in the world while such gigantic war profits were being raked in by these companies and their shareholders. There were successive extreme heatwaves across Europe, with temperature records broken in France, Germany, Italy, the Netherlands, Belgium, Spain and the United Kingdom, and some 36,000 excess deaths during the heatwaves.

Here in Ireland, it was the hottest summer in history; according to Met Éireann, July was the driest month ever recorded in the country. Meanwhile, continental Europe experienced a season of catastrophic wildfires. Across France and Spain, hundreds of thousands of people were evacuated from their homes – the largest such mass evacuations in peacetime since the second World War. And last month’s catastrophic flash flood in Nepal, which killed at least 1,400 people, was triggered by the collapse of a glacier – precisely the kind of extreme event we know to be increasingly common as a result of human-caused climate change.

That these oil companies and their shareholders are recording such healthy profits at a time when their product is so visibly sickening the planet is a moral obscenity. And as with many moral obscenities, it is the result of a business model proceeding precisely as intended by those who designed it. All of these companies have invested massive amounts of money over many decades in preventing the application of the kind of policies – at the level of individual governments and at the level of collective international action – that might have stopped or mitigated the consequences we are now forced to live with.

The Saudi government in particular, as one of the world’s top exporters of oil, has been relentless in undermining international efforts to transition to renewable energy. Here’s how Al Gore put it after last year’s UN Cop30 Climate Summit in Brazil: “Saudi Arabia appears to be determined to veto the effort to solve the climate crisis, only to protect their lavish income from selling the fossil fuels that are the principal cause of the climate crisis.”

According to a recent report by climate-focused investigative organisation DeSmog, the UK’s Reform Party has received £24 million (€28.15 million), about two thirds of its total funding, from donors with financial interests in the fossil fuel industry. The party, which essentially acts as the political wing of the oil industry in the UK, has committed to scrapping the government’s net zero policies. Its manifesto talks about this in terms of cutting the cost of living for consumers (“British households and business are being crushed by among the highest energy costs in the world – driven by bad ideological policy”), but the real aim seems to be to keep profits flowing into the coffers of the fossil fuel industry.

There is, surely, a gap in the electoral market here in Ireland. If I were an oil industry representative thinking about making a long-term play in Irish politics, I would be taking a good look at the meeting held in Westmeath last weekend by some of the organisers of the fuel protests that brought the country to a standstill earlier this year. The meeting was led by Christopher Duffy – a prominent figure in April’s fuel protests – who announced that the group would block roads again if their demands to abolish carbon tax and reduce excise and VAT on fuel were not granted. The abolition of carbon tax would certainly reduce the cost of doing business for hauliers and agricultural contractors like Duffy; it would also be of huge benefit to oil companies.

Environmental devastation

These business owners’ aims are entirely in sympathy with those of the fossil fuel industry. (Despite the populist framing of their outrage at the Government and the costs it is forcing ordinary Irish people to bear for transport, the protesters seem to have nothing to say about the recent announcement that public transport fares will be increased by an average of 15 per cent from next January.)

It is ultimately depressing that the protest movement currently threatening to bring the capital city to a standstill once more is not one demanding that the Government does more to reduce emissions, or to mitigate the effects of climate change – but one demanding that it does less.

The companies now raking in huge profits, after decades of preventing any attempt to move away from a fossil fuel-driven global economy, are directly responsible for incalculably vast environmental and economic devastation.

Just as consumers – and, yes, business owners such as the fuel protesters – are being forced to absorb the cost of fuel hikes resulting from the war with Iran, humanity as a whole is being forced to pay for those profits with its future.

In his final address to the recent UN General Assembly, the outgoing secretary general António Guterres reiterated a call he has been consistently making since the start of his tenure in 2017: that the oil companies must be made to pay – in the form of compensatory payments and windfall taxes – for the damage they have inflicted on this planet, its ecosystems and its inhabitants. “Those who polluted the most, and profited the most,” he said, “must do far more to repair the damage they caused. Polluters must pay.”

The US president, though he famously believes climate change to be “the greatest con-job ever perpetrated on the world”, takes, in his own way, no less dim a view of the massive profits the oil companies have been making as a result of the global chaos he himself unleashed this year. “They’re making too much money based on a shortage,” as he put it. “I don’t like it.”