Ross Clark Ross Clark

What BP’s soaring profits tell us about our dependence on oil

[Getty]

So much for those ‘stranded assets’ which former Bank of England governor Mark Carney and many others tried to warn us about. It wasn’t long ago that climate activists were urging the world to dump shares in oil companies, not just because we should want to punish them for climate change but because, they said, oil companies’ fortunes were on a downward trajectory as the world turned green. ‘The exposure of UK investors, including insurance companies, to these shifts is potentially huge,’ Carney said in 2015. ‘Once climate change becomes a defining issue for financial stability, it may already be too late.’

But that’s not how it looked in BP’s boardroom this morning as it announced profits of £7.1 billion ($8.2 billion) in the third quarter. Many of those who warned of ‘stranded assets’ are now bleating that BP and others are profiteering at the expense of the public. Joe Biden, no less, has accused oil companies of ‘war profiteering’. There have been renewed calls for more aggressive windfall taxes – on top of the one imposed by the government earlier this year. BP said it is on course to pay nearly £700 million in windfall taxes as a result of its latest figures. Just three years ago, a third of MPs demanded that their pension fund divested from oil because they saw it as too risky; now, many of those same MPs are looking to oil profits to bail out the public finances.

If the government does ratchet up its windfall tax, BP chief executive Bernard Looney has himself to blame. It was he who described the company earlier this year as a ‘cash machine’. A wiser remark would have been to say that BP was benefitting from exceptional conditions in world energy markets while reminding the world that in 2020, it made a $22 billion loss. That

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