Spending on oil and gas dividends hits 15-year high

Returns from oil and gas companies in the form of dividends and share buybacks reached their highest level in 15 years in 2022, accounting for 39 percent of spending, according to the International Energy Agency.

Concerns about interest rates and long-term demand for fossil fuels caused debt repayments to eat up another 13 percent.

Many fossil fuel companies had an exceptionally profitable 2022, with the increase in energy prices pushing the net income of oil and gas producers to $4 trillion, more than double the average of recent years.

Despite this windfall, the oil and gas industry spent only 1 percent of its money on clean energy investments.

This may change in 2023, with policy incentives such as the Inflation Reduction Act in the US already encouraging investment in clean energy infrastructure.

And for the first time in at least 15 years, less than half of the available money was invested in new oil and gas reserves.

Ella Hollowood

Our other charts of the week

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Foreign direct investment in the semiconductor industry reached an all-time high last year, as governments offered companies massive incentives to build local manufacturing capacity.

According to fDi Markets, a greenfield investment database from FT, approximately $175 billion has been committed to cross-border investment across the industry since 2021, more than the combined total of the previous decade.

Microchips’ position at the center of the modern economy has made them increasingly fraught with geopolitical risks. Governments have imposed trade restrictions, banned chip-related products and offered companies investment grants in an effort to develop and protect their local semiconductor industries at the expense of rivals.

The world’s leading destination country for foreign investment in semiconductors between 2003 and 2020 was China, which attracted nearly $100 billion worth of projects, double that of the US in the same period. In contrast, since 2021, the US has attracted almost eight times as much as China.

Alex Irwin Hunt

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Japan is often in the spotlight for its declining birth rate, but South Korea’s aging population will pose an even greater economic burden by 2050, according to the UN’s World Population Prospects.

South Korea’s dependency ratio — the number of people aged 65 and older as a percentage of the labor force — is projected to triple to 75 percent over the next three decades.

Population aging is also a growing problem in Southern Europe. Italy is projected to have a dependency ratio of 72 percent by 2050, with a birth rate that was at a record low last year.

Government credit ratings are already affected by the aging of the population. In January, the S&P rating agency warned that if no action is taken, about half of the world’s largest economies will be relegated to junk status by 2060.

Amy Borrett

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According to UN data, major UN climate summits have more than doubled in the past five years. The last two conferences were the largest since COP21 in 2015, when the Paris Agreement was adopted.

Participation in this year’s event in Dubai will be closely watched following the controversial nomination of oil director Sultan al-Jaber as COP28 president.

More than 130 lawmakers from the US Congress and the European Parliament last month called on the UN to remove al-Jaber as president and warned of the fossil fuel industry’s undue influence on the conference.

Oliver Hawkins

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More than a quarter of Americans had to forego medical care because of the cost last year, according to a recent report questionnaire of the Federal Reserve.

After historic lows during the Covid-19 pandemic, 28 percent of Americans said they had skipped treatment by 2022 — the highest rate since 2014. Dental care was the most skipped treatment, followed by a doctor’s visit.

The US central bank said the trend may be related to the rising cost of living, as medical care is “an area where people can save money by cutting spending.” Many reported that their financial well-being had deteriorated in 2022.

The report also points to significant differences between the insured and the uninsured. Although 91 percent of American adults were insured by 2022, many still struggled with out-of-pocket expenses, leading to 26 percent of insured skipping care. The rate was higher for those without insurance, at 42 percent.

Sarah Andersen

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