BP\n \n (BP), Chevron\n \n (CVX), ExxonMobil, Shell and Total\n \n (TOT)Energies raked in a record $199.3 billion in profits in 2022, benefiting from the surge in oil and gas prices that followed Russia’s invasion of Ukraine. TotalEnergies capped off the historic series of earnings Wednesday when it reported annual profit of $36.2 billion, more than double the previous year’s earnings. This extraordinary increase in profits has been replicated across the other Western energy giants, and shareholders have been rewarded with enormous windfalls. But the flood of cash has not delivered a commensurate boom in renewable energy investments, despite clear evidence that the world needs to move much faster with efforts to address the climate crisis. The record-setting results mark a dramatic turnaround for a sector that suffered brutal losses and slashed shareholder payouts in 2020, when pandemic lockdowns sharply reduced demand for energy and oil prices collapsed. The reversal of fortunes has been almost entirely due to oil and gas prices roaring back as economies reopened and then going into overdrive following Russia’s invasion of Ukraine last February. The scale of the gains by oil companies is generating fresh scrutiny of their investments in renewable energy and of the prices they charge their customers. It has also led governments in Europe to impose windfall taxes to raise the money needed to help households struggling with high energy bills. But the additional tax charges — which ExxonMobil, for its part, is challenging in court — and investments in new sources of energy pale in comparison with the sum the world’s five biggest private sector oil and gas companies handed to shareholders: the bounty exceeded $100 billion for 2022. “It’s been a spectacular year for shareholder distributions,” said Tom Ellacott, senior vice president for corporate research at Wood Mackenzie, an energy consultancy. Shareholders have also gained from big increases in share prices over the past year, ranging from TotalEnergies’ 11% rise at the bottom end to Exxon’s 39% surge at the top. Ellacott expects dividends to remain high this year but said oil prices would probably have to increase from the current level to sustain the volume of share buybacks seen in 2022. Several companies have, however, already announced plans to spend tens of billions of dollars buying back their own shares, including Chevron. The company, the Dow’s best-performing stock last year, announced last month that it would buy $75 billion worth of its own shares. The decision prompted a rebuke from the Biden administration. “For a company that claimed not too long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders sure is an odd way to show it,” said White House spokesperson Abdullah Hasan. More for oil and gas In comparison with rewards for shareholders, companies spent a fraction on renewable energy investments, even as they dialed up spending on oil and gas as demand recovered and European governments scrambled to replace Russian supplies. Globally, capital spending on oil and gas, excluding exploration for new deposits, was around $470 billion in 2022, according to Wood Mackenzie. That’s still below its pre-pandemic level, but it could go even higher this year, the consultancy said. Major oil companies are pouring billions into developing oil and gas resources, despite a warning from the International Energy Agency in 2021 that investing in new fossil fuel supplies must stop immediately if the world is to meet the Paris climate agreement goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels. “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,” Mark van Baal, the founder of activist shareholder group Follow This, said in a statement. Just three years ago, BP unveiled a plan to slash oil and gas production by 40% from 2019 levels by 2030. On Tuesday, it backed away from that target, saying 2030 output would now be around 25% lower. It is also now aiming to cut carbon emissions from its oil and gas production by 20%-30% by 2030, down from the previous goal of 35%-40%. “It’s clearer than ever after the past three years that the world wants and needs energy that is secure and affordable, as well as lower-carbon,” BP CEO Bernard Looney said in a statement. “We need continuing near-term investment into today’s energy system — which depends on oil and gas — to meet today’s demands and to make sure the transition is an orderly one.” BP still plans to be a net-zero emissions business by 2050. It invested around 30% of its $16.3 billion capital spending budget into “transition” businesses in 2022. The bulk of that went towards the $3 billion acquisition of Archaea Energy, a US company that derives natural gas from organic waste materials. Shell, meanwhile, directed 14% of its total capital spend, or about $3.5 billion, towards its Renewables and Energy Solutions business, which includes electricity generation, hydrogen production, carbon capture and storage, and the trading of carbon credits. The company said the total amount spent on “low- or zero-carbon businesses,” including on operations, was much higher at about $21 billion, or a third of total expenditure. Shell CEO Wael Sawan told journalists last week that the world needed to move faster on renewables, requiring changes to government policy, uptake by customers and continued investments by companies like Shell. He said he believed Shell, which is also targeting net-zero emissions by 2050, was “finding the right balance in our capital allocation.” — Allison Morrow contributed reporting.