European energy giants including BP, Shell, Total Energies, and Equinor are investing a much larger portion of their £74bn in combined profits back into fossil fuels than they are into renewables and low carbon energy projects, a new analysis from Channel 4 News has revealed.
Channel 4 News analysed the accounts of four of Europe’s largest oil and gas companies and found that collectively they invested the equivalent of five per cent of their combined £74bn pre-tax profits into green projects in the first half of this year.
The analysis revealed that BP invested £300m into renewables and low carbon projects in the first half of 2022 – which according to the analysis is equivalent to just 2.5 per cent of its £12.2bn profits.
The analysis found, by comparison, that BP invested £3.8bn in new oil and gas projects – more than 10 times its low carbon investments.
The findings also revealed that Shell invested the equivalent to 6.3 per cent of its £17.1bn profits into low carbon energy, while it invested more than three times more into oil and gas.
Channel 4 News highlighted that BP, Shell and Equinor only publish figures on renewable investment alongside what they class as ‘low carbon’ energy – which can include more contested, non-renewable energy technologies.
“What this shows is that their investment in renewables is a vanishingly small proportion of their overall investment, which is still very much focused on oil and gas,” said Tess Khan, of green energy campaign group uplift.
“In the UK we don’t have any control, no matter how much oil and gas we produce domestically, over the price that we pay for it. And ultimately, we are in an energy affordability crisis.”
Channel 4 News added that all four companies had told them they are increasing their investment into renewables.
BP told the broadcaster that it is planning low carbon investments of up to £5bn by 2030. Shell said it will invest £20-£25bn in UK energy in the next decade, with more than 75 per cent of it in low carbon energy.
TotalEnergies said 25 per cent of its investment will be in renewables up to 2025. Equinor said it is aiming for more than 50 per cent of its investment to be in renewables and low carbon by 2030.
In other energy news, new figures from the government and JODI Monthly Gas Statistics have shown that domestic gas production in the UK was 26 per cent higher in the first six months of this year, when compared to the same period last year.
The boost in domestic gas production has been driven by the UK’s decision to break all energy links with Russia, with a recent House of Commons briefing confirming that in June 2022 the UK imported no oil, gas, or coal from Russia.
Trade association Offshore Energies (OEUK) – formerly known as Oil and Gas UK (UKOG) – warned the surge in domestic energy production could only be sustained with continued investment into oil and gas reserves.
It suggested that the 3.5 billion cubic meters added to UK gas supplies from UK production in the first half of this year has been driven by a range of factors, including the start-up of new fields in the southern North Sea, including Harbour’s Tolmount field and IOG’s Saturn Banks project.
It added that there has also been much less planned shutdown activity due to the extent of work completed in 2021 and companies’ focus on maintaining plant uptime to maximise energy supply.
OEUK suggested the new figures could mean around half of the UK’s gas needs in recent months has been met with home-produced resources, increasing the availability of reliable domestic supplies and reducing the need to buy in gas from other countries through either pipelines or Liquified Natural Gas shipments.
OEUK has warned that the rapid reduction in UK supplies of gas would increase consumer costs further as it would decrease availability of international supplies and could therefore ramp up prices.
It added that the current energy supply crisis demonstrates the challenges countries face if oil and gas production declines more rapidly than demand, with renewable electricity generation and alternative domestic heating sources such as hydrogen not yet available at the scale needed.
“While we don’t know what winter will bring for the UK this year, we know that it is coming and, we must be prepared for the worst and hope for the best to support UK energy security,” said OEUK sustainability director Mike Tholen.
“UK gas producers have already ramped up domestic supplies by 26% in the first half of this year compared to the same period last year. The massive increase in our support for the UK’s gas needs can only be sustained by substantial ongoing investment from gas producer companies.
“If we are to continue our efforts to protect UK gas supplies, which remains the backbone of our energy mix for electricity, heating and industrial processes, we need politicians of all parties to support energy produced here in the UK with all the benefits that brings for taxes, energy security and jobs. It’s all the more important at a time when we can’t afford to tighten supplies even further, which is what will naturally happen if domestic production of gas isn’t maintained.”
However, green groups have maintained that a new ‘dash for gas’ development in the UK could prove counterproductive in the long term, as increased UK production is unlikely to have a significant impact on international gas prices and new projects risk becoming stranded assets as renewables and other clean technologies continue to come online and demand for gas starts to fall.