Oil and gas giants making record profits during Ukraine war ‘given unprecedented access to EU leaders’
Oil and gas giants have enjoyed “unprecedented” access to European leaders while raking in record profits since the start of Russia’s war in Ukraine, campaigners have warned.
Lobbying watchdogs allege in a new report that fossil fuel firms have successfully used this “privileged access” and capitalised on divisions among member states in order to “delay and minimise any genuine political intervention” to keep soaring energy costs in check.
Energy giants have also “used the crisis to their own advantage by forcing” the European Union into more infrastructure investments, locking consumers into “a spiral of skyrocketing energy prices, fossil fuel addiction and climate disaster”, the groups claim.
Four European fossil fuel majors – Shell, TotalEnergies, Eni and Repsol – have enjoyed a total of 113 meetings with EU’s executive body this year, according to the report by the Corporate Europe Observatory, France’s l’Observatoire des Multinationales and Italy’s Recommon.
At the same time, those same firms have seen record profits – totalling €78bn – in the first nine months of the year, equating to €395 for every single European household, campaigners said.
The European Commission has announced a “windfall tax” on the profits of oil and gas firms to help consumers shoulder the cost of soaring prices, in what it has labelled a “solidarity contribution” of 33 per cent of their taxable surplus profits from the fiscal year 2022 – a sum it said could raise €140bn.
But the watchdogs warned that “the devil is in the detail”, adding that member states have been given a lot of flexibility in how to apply the rules and what will form the basis for taxation, making it hard to assess how much the move will yield.
They pointed to French finance ministry figures suggesting the French version could only yield around €200m, and domestic resistance to Italy’s windfall tax, as they claimed: “It is hard to see this as anything else than a purely symbolic measure, designed to end the public debate on the taxation of super-profits.”
Oil and gas prices have soared as Vladimir Putin’s war in Ukraine exacerbated Covid supply issues, sparking fears of shortages in Europe this winter as the taps are turned off in Moscow.
However, boosted by mild temperatures and gas storage tanks topping 90 per cent capacity, prices dropped to their lowest since mid-June this week, with Dutch TTF gas futures – the benchmark European contract – briefly falling as low as €93.35 per megawatt-hour (MWh).
Part of the EU’s plan to reduce reliance on Russian fossil fuels saw the bloc create a new regulation setting mandatory minimum level of gas in storage facilities to 80 per cent by 1 November – with operators and member states urged to strive for 85 per cent.
Commission president Ursula Von der Leyen has met with fossil fuel chief executives while formulating the EU’s energy response to the Ukraine crisis, with minutes showing she was advised on which measures were “feasible” and warned that “fiddling with market mechanisms would have “unintended consequences”.
During that same meeting in March, the Commission agreed to set up its Energy Platform Industry Advisory Group comprised exclusively of Europe’s major gas companies, whose mandate is to effectively co-manage the EU’s move away from Russian gas, according to the Corporate Europe Observatory.
The advisory group, which had its first meeting on Wednesday, “will provide industry representatives top-level, regular access to the Commission on the development of” the EU’s plan to end its dependence on Russian gas, including “how and where the EU will source new gas”, the campaigners said.
The membership of the group, which operates under “an obligation of professional secrecy”, includes “virtually every significant oil and gas corporation in Europe” but not a single public interest, consumer or environmental group, according to the lobbying watchdog.
The report concludes: “The crisis that followed the Russian invasion of Ukraine should have been an occasion for a radical change of approach”, such as taking back public control over the energy sector, asserting the basic right to energy over corporate profits, and developing decentralised, renewables-based energy systems throughout Europe.
“Instead, the EU has only reduced its dependence on Russian gas by increasing its overall dependence on gas and the gas industry altogether, locking us in a spiral of high energy prices, corporate profiteering, fossil fuel addiction, and climate disaster.”
The European Commission has been approached for comment.
