The two-fold injustice at the heart of fossil fuel profits

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As Britons eye the gargantuan profits hauled in by fossil fuel and energy giants so far this year, many minds are no doubt turning to the two different injustices at play - our power bills, and the climate crisis.

On Thursday (27 July), British Gas owner Centrica revealed earnings at its retail supplier business soared by nearly 900% - to £969 million in the six months to 30 June. Meanwhile Shell announced its profits had fallen, but it still raked in £3.9 billion over the last quarter.

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These are record profits for British Gas over first half of this year - largely due to a controversial move to raise the UK's energy price cap, which allowed suppliers to recoup some of the money they lost while customers bills’ were limited to £2,500 a year under the Energy Price Guarantee.

It seems to be just a handful of people who are really benefitting. Shell has announced shareholder pay-outs of £9.7 billion pounds in the first half of 2023 - but an analysis by think tank Common Wealth found its UK-based CEO has seen his pay rise 53% between 2021 and 2022 - from £6.3 million to £9.7 million. 

From struggling to pay winter energy bills to dodging summer wildfires, there are multiple levels of inequality at play as fossil fuel giants profit (Image: NationalWorld/Adobe Stock/Getty)From struggling to pay winter energy bills to dodging summer wildfires, there are multiple levels of inequality at play as fossil fuel giants profit (Image: NationalWorld/Adobe Stock/Getty)
From struggling to pay winter energy bills to dodging summer wildfires, there are multiple levels of inequality at play as fossil fuel giants profit (Image: NationalWorld/Adobe Stock/Getty) | NationalWorld/Adobe Stock/Getty

Back home, Centrica boss Chris O'Shea is collecting a £815,000 salary each year - plus annual bonuses - plus money from shares. One annual bonus last year was worth £1.4 million, while a long-term scored him an extra £2.3 million.

Meanwhile, millions of Brits are struggling to pay their bills, as the world is gripped by a cost of living crisis. Higher energy bills in winter as households fight to keep out the cold - which trickle through into these companies' pockets - play a huge part in that.

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It's unlikely that paying the power bills will be much of a concern to Shell and Centrica's CEOs.

Power bills aside, there is a second tier of inequality to be found within the pages of Shell's profit report. The Common Wealth analysis suggested that despite a fresh green rhetoric, the energy giant is doubling down on fossil fuels as the climate crisis intensifies.

Shell’s investment in “Renewable and Energy Solutions” paled compared to its investment in fossil fuels - and even what it pays out to its shareholders. In the year's second quarter, the company spent 5.6 times as much on fossil fuels than it invested into its “Renewable and Energy Solutions Division”.

By Shell's own definition, this “renewable” division includes “the marketing and trading and optimalisation of power and pipeline gas” - as well as clean energy.

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July is on the verge of becoming the hottest month in world history. Europe, North America, and large parts of Asia have been gripped by deadly back-to-back heatwaves this month - with landscapes ravaged by wildfires.

The heatwaves would have been virtually impossible without manmade climate change, scientists have said, and that level of climate change would have been virtually impossible without the emissions we create by burning fossil fuels.

Disproportionately, many of the the world's poorest countries are those most at risk - Pakistan to catastrophic floods, Vanuatu to sea level rise, Northern African nations to extreme heat. Countries which contribute comparatively fewer emissions in general.

Even in the UK, the people most at risk of getting sick and dying as our summer temperatures creep ever upwards are the elderly, the homeless, people living with serious medical conditions.

But once again, it's not the CEOs of Shell and Centrica who have to worry about being victims of a climate in crisis.

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