Big Oil rakes in record profit haul of nearly $200 billion, fueling calls for higher taxes
Deer graze inside the gates of the Exxon Mobil Joliet refinery on the Des Plaines River. Exxon Mobil’s 2022 haul of $56 billion marked a historic high for the Western oil industry.
Chicago Tribune | Tribune News Service | Getty Images
The West’s five largest oil companies raked in combined profits of nearly $200 billion in 2022, intensifying calls for governments to impose tougher windfall taxes.
French oil giant TotalEnergies on Wednesday reported full-year profit of $36.2 billion, doubling last year’s total, as fossil fuel prices soared following Russia’s full-scale invasion of Ukraine.
The results see TotalEnergies join supermajors Exxon Mobil, Chevron, BP and Shell in recording a massive upswing in annual profits, after Exxon’s 2022 haul of $56 billion marked a historic high for the Western oil industry.
Altogether, the five Big Oil companies reported combined profits of $196.3 billion last year, more than the economic output of most countries.
Flush with cash, the energy giants have used their bumper earnings to reward shareholders with higher dividends and share buybacks.
“You may have noticed that Big Oil just reported record profits,” U.S. President Joe Biden said in his State of the Union address on Tuesday. “Last year, they made $200 billion in the midst of a global energy crisis. It’s outrageous.”
Biden said U.S. oil majors invested “too little of that profit” to ramp up domestic production to help keep gas prices down. “Instead, they used those record profits to buy back their own stock, rewarding their CEOs and shareholders.”
Biden proposed quadrupling the tax on corporate stock buybacks to incentivize long-term investments, insisting the supermajors would still make a “considerable” profit.
Activists from Greenpeace set up a mock-petrol station price board displaying the Shell’s net profit for 2022 as they demonstrate outside the company’s headquarters in London on Feb. 2, 2023.
Daniel Leal | Afp | Getty Images
Agnès Callamard, secretary general of human rights group Amnesty International, described Big Oil’s vast profits as “patently unjustifiable” and “an unmitigated disaster.”
“The billions of dollars of profits being made by these oil corporations must be adequately taxed so that governments can address effectively the rising cost of living for most vulnerable populations and better protect human rights in the face of multiple global crises,” Callamard said in a statement.
Big Oil executives have sought to defend their rising profits amid a barrage of criticism from campaigners, typically highlighting the importance of energy security in the transition to renewables and suggesting higher taxes could deter investment.
“Ultimately, taxes are a matter for governments to decide on. We, of course, engage and provide perspectives and the key perspective that we try to provide is a context around the fact that companies like ourselves that need to invest multiple billion dollars to support the energy transition require a secure and stable investment climate,” Shell CEO Wael Sawan said Thursday.
His comments came shortly after Shell reported its highest-ever annual profit of nearly $40 billion, comfortably surpassing its previous record of $28.4 billion in 2008.
“For example, windfall taxes or price caps simply erode confidence in that investment stability and so I do worry about some of the moves being made,” Sawan said. “I think there is a different approach that needs to be had which is to really draw investment capital at a time when we need to be able to embed energy security into the broader energy system here in Europe.”
The CEO of Saudi Aramco, the world’s largest energy company, has previously warned about the dangers of pressuring oil companies through higher taxes.
Asked by CNBC’s Hadley Gamble last month if a windfall tax on oil profits was a bad idea, Saudi Aramco’s Amin Nasser replied, “I would say, it’s not helpful for them [in order] to have additional investment. They need to invest in the sector, they need to grow the business, in alternatives and in conventional energy, and they need to be helped.”
Nasser said the transition to renewable technologies required significant investment, and this is likely to take a hit if companies face increased taxation.
Nonetheless, the advocacy group Global Witness says people have every right to be outraged by the extraordinary profits of Big Oil and called for an increased windfall tax.
“Given that we’re entering a global recession and that most of us know people who are struggling, we must all call out profiteering like this,” Alice Harrison, fossil fuels campaign leader at Global Witness, told CNBC via email.
“An increased windfall tax to help those struggling to pay their bills, along with a significant boost in renewable energy and home insulation, would end the fossil fuel era that is harming both people and the planet so severely,” Harrison said.
‘People can see the injustice’
“People can see the injustice of paying eye-watering energy costs while big oil and gas firms rake in billions,” said Sana Yusuf, climate campaigner at Friends of the Earth.
“Fairly taxing their excess profits could help to fund a nationwide programme of insulation and a renewable energy drive, which would lower bills, keep homes warmer and reduce harmful carbon emissions,” Yusuf said.
BP CEO Bernard Looney on Tuesday sought to defend the company from criticism after reporting record 2022 profits of $27.7 billion, saying the British energy major was “leaning in” to its strategy to provide the world with the energy it needs.BP, which was one of the first energy giants to announce an ambition to cut emissions to net zero by 2050, had pledged emissions would be 35% to 40% lower by the end of the decade.
It said Tuesday, however, that it was now targeting a 20% to 30% cut, saying it needed to keep investing in oil and gas to meet demand.
“We’re leaning into our strategy today,” BP’s Looney said. “We’re announcing up to $8 billion more investment into the energy transition this decade and up to $8 billion more into oil and gas in support of energy security and energy affordability this decade.”
Activist investor group Follow This was sharply critical of the move.
“If the bulk of your investments remain tied to fossil fuels, and you even plan to increase those investments, you cannot maintain to be Paris-aligned, because you will not achieve large-scale emissions reductions by 2030,” said Mark van Baal, founder of Follow This.
— CNBC’s Natasha Turak contributed to this report.
Enbridge, a Canadian energy company, just announced it’s moving forward with an 815-megawatt (MW) solar project called Sequoia in Texas. When it’s done, it’ll be one of the largest solar farms in North America. The project’s price tag is a hefty $1.1 billion.
Enbridge’s Sequoia, around 150 miles west of Dallas, has already landed long-term power purchase agreements (PPAs) with AT&T and Toyota, ensuring most of its output is sold for years to come. This deal was highlighted in Enbridge’s third-quarter report on Friday.
Sequoia will be built in two phases, with power expected to start flowing in 2025 and 2026. Enbridge says it’s taken steps to reduce risks by securing equipment and procurement contracts in advance. Permits and purchase orders are also locked down.
Toyota’s PPA with Enbridge’s Texas solar project is part of Toyota’s broader push toward sustainability, as the automaker aims to achieve net zero by 2035 and match 45% of its purchased power with renewable electricity by 2026 as it still clings to its “diverse powertrain strategy.”
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Environment
NIO’s EV sales top 20,000 for the sixth straight month as new low-cost SUV shows promise
With its new electric SUV rolling out, NIO’s (NIO) sales topped the 20,000 mark again in Oct, its sixth straight month hitting the milestone.
NIO sold 20,976 vehicles last month, up 30.5% from October 2023. The NIO brand sold 16,657 vehicles, while its new “family-oriented smart vehicle brand,” Onvo, contributed 4,319 in its first full sales month.
After launching its new mid-size Onvo L60 electric SUV in September, NIO said production and deliveries are steadily ramping up.
At the end of October, NIO’s Onvo had 166 Centers and Spaces throughout 60 cities. Onvo plans to continue expanding its network to drive future growth.
NIO’s new electric SUV starts at around $21,200 (149,900) and is a direct rival to Tesla’s Model Y. The base $21K model is if you rent the battery. Even with the battery included, Onvo L60 prices still start at under $30,000 (206,900 yuan), with a CLTC range of up to 341 miles (555 km). That’s still less than the Model Y.
Tesla’s Model Y RWD starts at around $35,000 (249,900 yuan) with 344 mi (554 km) CLTC range in China.
NIO’s new Onvo brand drives higher Oct sales
NIO has often compared its new electric SUV to the Model Y, claiming it’s superior in many ways. The L60 has better consumption at 12.1 kWh/100km compared to the Model Y at 12.5 kWh/100km).
With a longer wheelbase (2,950 mm vs 2,890 mm), NIO’s electric SUV also provides slightly more interior space.
Despite the L60’s success so far, NIO believes its second Onvo model will be an even bigger hit. It could be a potential game-changer.
“If you think the L60 is good, then this new model is a much more competitive product,” NIO’s CEO William Li told CnEVPost after launching the L60. Onvo will launch a new EV every year. Following the L60, Onvo will launch a new mid-to-large-size electric SUV next year.
NIO’s leader claims the new model will be revolutionary. According to Li, it will offer even more surprises than the L60. Deliveries are planned to begin in Q3 2025.
| NIO Onvo L60 vs Tesla Model Y trims | Range (CLTC) |
Starting Price |
| NIO Onvo L60 (Battery rental) | 555 km (341 mi) 730 km (454 mi) |
149,900 yuan ($21,200) |
| NIO Onvo L60 (60 kWh) | 555 km (341 mi) | 206,900 yuan ($29,300) |
| NIO Onvo L60 (85 kWh) | 730 km (454 mi) | 235,900 yuan ($33,400) |
| NIO Onvo L60 (150 kWh) | +1,000 km (+621 mi) | TBD |
| Tesla Model Y RWD | 554 km (344 mi) | 249,900 yuan ($34,600) |
| Tesla Model Y AWD Long Range | 688 km (427 mi) | 290,900 yuan ($40,300) |
| Tesla Model Y AWD Performance | 615 km (382 mi) | 354,900 yuan ($49,100) |
Local reports suggest a six-or seven-seat electric SUV could hit the market even sooner. With rumors of a launch around Q1 2025, deliveries could happen as soon as May 2025.
According to sources close to the matter, the L60 is just a “stepping stone” with even more exciting EVs on the way. The source claimed the new six-seat option will start at around $42,100 (300,000 yuan).
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