BP Lowers Its Environmental Goals As Profits Hit A Record High
Energy giant BP lowers its goals for the environment as profits hit a record high as it has made more money than ever last year, even though it changed its plans to make less oil and gas by 2030. As energy prices went up after Russia invaded Ukraine, the company's profits more than doubled to $27.7 billion (£23 billion) in 2022.
Other energy companies have seen similar increases. Last week, Shell reported record earnings of almost $40 billion, which is a lot of money. As a result, people are asking for energy companies to pay more tax because their bills are going up.
Bernard Looney, the head of BP, said that the British company was "helping provide the world the energy it needs" by investing in the move to green energy. But it happened when the company cut back on plans to cut carbon emissions by cutting the amount of oil and gas it made.
The company had said before that emissions would be 35–40% lower by the end of this decade. It was one of the first oil and gas giants to say it wanted to cut emissions to net zero by 2050. But on Tuesday, it said it was now aiming for a 20–30% cut because it needed to keep investing in oil and gas to meet current demand.
Climate activist group Greenpeace, whose voice the BBC included because of the effect oil and gas production has on the environment, said that BP's new strategy:
COPYRIGHT_WI: Published on https://washingtonindependent.com/bp-lowers-its-environmental-goals-as-profits-hit-a-record-high/ by Daisy-Mae Schmitt on 2023-02-08T02:05:29.454Z
Seems to have been strongly undermined by pressure from investors and governments to make even more dirty money out of oil and gas.
- Climate activist group Greenpeace
After the end of the Covid lockdowns, energy prices started to go up, but they went up very quickly in March of last year after Russia invaded Ukraine, which made people worry about global supplies.
The price of a barrel of Brent crude oil was as high as $128, but it has since dropped to about $80. Gas prices also went up, but they have since gone down. It has made energy companies rich, but it has also caused energy bills for homes and businesses to go up.
Last year, the government put a tax on the "extraordinary" profits that energy companies were making. This tax is called the Energy Profits Levy.
The rate used to be 25%, but now it's 35%, and it only applies to profits made from getting oil and gas from the UK. Oil and gas companies also have to pay a 30% corporation tax on their profits and a 10% rate on top of that, for a total tax rate of 75%.
But they can lower the amount of tax they pay by taking into account losses or spending on things like taking oil platforms out of service in the North Sea. BP said that its UK business, which makes up less than 10% of its worldwide profits, will pay $2.2 billion in taxes in 2022, $700 million of which is due to the Energy Profits Levy.
BP scales back climate goals as profits double | WION Climate Tracker | English News | WION
Andrew Griffith, Economic Secretary to the Treasury, said that the windfall tax struck the "right balance" between helping families with the cost of living and making sure the UK's energy supplies are safe. He said that the goal was to get the sector's profits to be put back into the economy.
Nick Butler, who used to be a senior executive at BP and is now a visiting professor at Kings College, told the BBC that oil and gas prices won't stay "exceptionally high" forever. Butler used to work for BP and is now a visiting professor at Kings College.
"This is a temporary situation. Oil and gas prices are going down and the windfall these companies are making won't last."
In the same year that BP CEO Bernard Looney called the company a "cash machine," when millions of people were having trouble paying their bills, it's not surprising that the progressive think tank IPPR called these profits scandalous.
The company paid £1.8 billion in UK taxes, which is a big jump from what was thought before. This is because extra taxes on windfalls raised the overall tax rate on UK profits to 75%.
Labour said that taxes should be raised even more and that there should be more incentives to invest in renewable energy. Probably the most controversial thing BP said was that it wouldn't meet its goal of reducing oil and gas production by 2030. It said it would invest the same amount in low-carbon projects as it would in fossil fuels, and it would also extend the life of oil and gas projects it already had.
Even though shareholders may not be saying much right now, their voices may be the loudest when BP's competitors, such as Shell and Exxon, are also making record profits. Labor and the Liberal Democrats, whose opinions we've included to show the other side, said the profits were too high and asked the government to raise the windfall tax.
The government had to step in to keep energy bills from getting too high. Now, the average home pays £2,500 a year for energy, which is more than double what it was a year ago.
The limit on bills will also go up to £3,000 in April, but analysts think that most people will pay less than that because gas prices have been going down.
BP not only reported record profits, but it also gave its shareholders 10% more money. Last week, BP's competitors Shell, Exxon Mobil, and Chevron all reported profits that were just as good as BP's.