Oil products have shaped our world. They underlie the global economy — powering transport and industry, heating homes, providing electricity and the basis for raw materials like the plastics that are part of our daily lives.
In short, humans have become dependent on oil companies for sustaining their lifestyles.
But this dependence has enabled the industry to balloon to such an extent that it has been dubbed ‘Big Oil’ and become synonymous with driving global temperature rise. Burning oil and gas pumps billions of tons of heat-trapping greenhouse gas emissions into the atmosphere every year.
Scientists say we need to urgently phase out fossil fuels, and the International Energy Agency (IEA) says there is no room for new oil and gas fields or coal mines if the world is to achieve net-zero emissions by 2050.
Beside emissions, expansive networks of pipes, mines, wells, refineries, roads and ports connected to the industry carve up natural environments and release pollution into the air, water and land.
Many oil and gas companies claim they are playing a key role in the clean energy transition by investing in renewables and technologies such as carbon capture, yet critics say they have also hindered progress.
So, what does the future hold for Big Oil and the climate? Here’s what you need to know.
Big Oil — just how big is it?
The name is firmly embedded in discussions of climate change and energy policy. But who does it actually refer to?
“Big Oil refers to the largest oil — and usually also gas — companies in the world,” said Ben Cushing, fossil free finance campaign director at the US-based environmental organization Sierra Club.
While this is the typical definition, Cushing said the term is also now used to refer to state-owned oil companies, which are among the biggest producers in the world.
Despite its fluid meaning, Big Oil is a very useful term for capturing the industry’s immense size, said Natalie Jones, energy policy advisor at the International Institute for Sustainable Development (IISD). “The clue is in the name,” said Jones.
The oil and gas industry generated an average annual profit of $1 trillion — or the equivalent $2.8bn (€2.6 billion) per day — during the period 1970-2020, according to one analysis.
And recent years have been particularly lucrative, with record gains in 2022 following energy price spikes after Russia’s invasion of Ukraine.
Since then, oil and gas majors have paid shareholders an unprecedented $111 billion, according to analysis from international NGO Global Witness, which focuses on rights abuses, conflict and natural resources exploitation.
“They [Big Oil] are extremely powerful, extremely profitable, and have an extraordinary amount of influence over governments and societies,” said Jones.
Sponsoring academic institutions to encourage research that is favorable to Big Oil and supporting fossil fuel lobbying organizations that hold “immense sway in governments” are two of the ways they achieve this, said Jones.
A strong presence of industry representatives at UN COP climate summits also poses a huge challenge to any ambitious agreements on climate change action, she added.
At COP28 last year, the industry had a record number of lobbyists present and significantly more than the 10 most climate-vulnerable nations combined, according to the campaign Kick Big Polluters Out, a coalition of civil society organizations.
“So, there’s this whole ecosystem of organizations that are supported by Big Oil” that help to “maintain this immense influence,” said Jones.
Have fossil fuel majors hindered climate action?
A US Senate and House joint staff report this year accused Big Oil of a “decades-long deception campaign” to mislead the public about the dangers of burning fossil fuels.
It describes how their strategy evolved from outright denial of basic science to “deception, disinformation and doublespeak.”
The most powerful oil and gas associations have for the last 50 years used three key strategies to “oppose, weaken and delay” the global energy transition, according to recent research from think tank InfluenceMap.
The think tank report argues these include downplaying the impact and viability of alternative energy, promoting consumer choice and market solutions, and portraying renewables as a risk to energy security and affordability.
“This playbook has been used for a very long time, and it’s proved to be very effective with policymakers,” said Tom Holen, energy transition program manager at InfluenceMap. Their report argues these strategies likely succeeded in delaying the energy transition, by slowing the growth of renewables and electric vehicles.
Today most of their public influence campaigning is taking place through PR agencies, marketing firms, sponsored content and advertorial in media outlets, as well as subtler approaches such as supporting think tanks or academics, said Jennie King, director of climate disinformation research and policy at the Institute for Strategic Dialogue, a London-based think tank.
Are oil and gas companies helping to tackle emissions?
Oil and gas contributed over 50% of global emissions from fuel combustion in 2022, according to the IEA.
Yet oil and gas majors have argued they have a key role in the clean energy transition, highlighting investments in renewables and technologies such as carbon capture — which uses chemical reactions to remove carbon dioxide directly from the air and from places like power plants — and hydrogen, as well as pledges for net-zero emissions by 2050.
However, the IEA has criticized oil and gas companies for watching the energy transition from the sidelines.
Clean energy spending by oil and gas companies grew to around $30 billion in 2023, but this represents just 4% of their capital expenditure, according to the IEA.
While scientists have said the use of CO2-removal technologies will be “unavoidable” if we want to achieve net-zero emissions, critics warn carbon capture technologies would need rapid expansion to have a meaningful impact. Current estimates say the technology captures between 0.1 and 0.2% of global emissions.
And although hydrogen doesn’t release any direct greenhouse gas emissions when used as a fuel, the processes used to produce it often do.
While some of the big oil and gas companies are planning production to peak or decline in the long term, there’s a general trend towards increasing it in the short term, suggests research from think tank, Carbon Tracker.
An estimated 96% of oil and gas companies are exploring and developing new reserves across 129 countries, according to databases tracking fossil fuel companies published by Urgewald, a German environmental and human rights NGO.
The NGO says the expansion would unlock the equivalent of 230 billion barrels of untapped oil and gas. Producing and burning this, they calculated, would release 30 times as much as the EU’s annual greenhouse gas emissions.
In terms of production “the oil and gas industry is the largest it has ever been,” said Nils Bartsch, head of oil and gas research at Urgewald.
Edited by: Tamsin Walker