Occidental Petroleum Corp. of the United States and Carbon Engineering Ltd. of Canada are preparing a site in the Permian basin of the United States for a plant that will capture 500,000 tons of carbon dioxide per year.
According to Vicki Hollub, Occidental’s chief executive officer. The groundbreaking ceremony for the direct air capture plant, which will be 120 times larger than the world’s largest facility using similar technology, will take place on Nov. 29, with commercial operations set to begin by the end of 2024.
Hollub appeared on Bloomberg Green’s Zero podcast to discuss how Oxy (the company’s stock ticker and nickname) intends to achieve net zero emissions by 2050, including eliminating emissions from customers who burn the oil and gas it extracts. In the United States, most of Oxy’s competitors have climate targets that exclude customer emissions, which can account for more than 80% of the company’s total.
Hollub also discussed Oxy’s plans to focus more on carbon capture and sequestration over time, rather than solely on fossil-fuel extraction, on the podcast. The company will rely heavily on carbon-capture technology, which traps emissions from industrial sources or the atmosphere and burys them deep underground.
Oxy is banking on offset revenue to fund its transition. Global corporations in the process of developing climate plans are looking for credible offsets to manage their carbon balance sheets, but the supply of carbon-removal offsets is more limited than it is for projects like forest protection and renewable energy that simply avoid emissions.
Oxy is also banking on the sale of “net-zero oil,” which it plans to produce by injecting more CO2 into oil reservoirs than is emitted during the extraction and combustion processes. The process, known as enhanced oil recovery, extracts more oil from reservoirs than other methods. For the time being, Oxy only uses CO2 from underground mines rather than excess CO2 in the atmosphere or industrial emissions. However, if done correctly, switching up those sources could result in a climate gain rather than the current climate harm.
This is a condensed version of Zero’s interview with Hollub. You can listen to the entire conversation below or read the transcript here.
Akshat Rathi: When did you first consider that becoming a company that injects more carbon dioxide than it extracts fossil fuels was the best way to participate in the energy transition?
Vicki Hollub: We reviewed our oil and gas assets in 2011. We realized we didn’t have enough CO2 to fully develop our oil reservoirs. Using anthropogenic [man-made] CO2 sources was one way to continue generating incremental oil production. As a result, it became clear that we can not only generate net-zero oil by removing CO2 from the atmosphere or industrial sites, but also help the world.
Akshat Rathi: When will the first shipment of net-zero oil via carbon capture arrive?
Vicki Hollub says That I can’t tell you right now. Rather than doing enhanced oil recovery, there is currently more interest in simply sequestering CO2. Corporations require CO2 offsets because they strive for net-zero emissions. As a result, we make the best decisions for technological advancement. Finally, I believe that storing COO2 in a saline reservoir is a waste of a valuable resource. We should avoid doing it on a large scale. It is passing up an opportunity to produce zero-emission oil.
Mr. Akshat Rathi: However, burning oil pollutes the air. While net-zero oil may imply that you’ve solved the climate problem, what about particulate matter pollution?
Vicki Hollub: Particulate matter pollution must be addressed, but I believe it is a lower source of health problems in my opinion.
Akshat Rathi: If we don’t address the overall climate, it will become a bigger problem for health in the long run. However, outdoor air pollution kills 4.5 million people each year.
Vicki Hollub: The majority of it comes from coal.
It’s also oil, Akshat Rathi. A young child died in London, and the cause of death was determined by an inquest to be air pollution from cars.
Returning to carbon capture. If Oxy achieves net-zero status by 2050, how much revenue will come from extracting carbon and how much from injecting carbon?
Vicki Hollub says If our plans come to fruition, we’d like our revenue from carbon capture to equal that of oil and gas. We believe that using CO2 for enhanced oil recovery and producing net-zero barrels is the way forward. The last company standing should produce the final barrel of oil using CO2 enhanced oil recovery.
This episode’s full transcript can be found here. Check out more Zero episodes and subscribe on Apple, Spotify, Google, or Stitcher to receive new episodes every Thursday.
