Bloomberg Businessweek |Business| January 18, 2021 pp10-11 “Occidental Goes Green to Produce More Oil” “If wants to strip CO2 from the air, then use some to dislodge crude from underground rock” “The Bottom Line “With reliance on fossil fuels under assault, Occidental Petroleum is betting on tech that could help it get more than half of its revenue from carbon management within two decades”
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Summary of the article
For those working the Permian basin of Texas the green revolution is essentially an attack on their livelihood of extracting oil but now Occidental is proposing using carbon dioxide capture to extract oil while removing carbon dioxide from the environment making the process “carbon neutral.” They are planning on installing “the globe’s first large-scale direct air capture (DAC) plant [that] will remove carbon dioxide from the atmosphere and pump it underground, where it will remain for millions of years.” This is an expensive proposition that will need “support from tax credits and outside investors”. According to Vicki Hollub (CEO, Occidental) “’We are not afraid of the transition out of oil and gas, because we’re a part of that transition. I do believe that in 15 to 20 years, more of our income will be from carbon management that from oil and gas.”
Climate scientists know that “carbon capture” is essential in meeting climate goals and that it is costly. Unlike current systems that focus on “siphoning off concentrated streams” of carbon dioxide from industrial operations, Occidental’s plan “changes the model because it takes CO2 direct from the air, allowing the facility to be built anywhere.” Much like other alternative energy projects including solar panels and wind turbines engineers believe costs will fall incrementally as the process is optimized. Occidental will lease DAC technology from a Canadian startup Carbon Engineering-funded in part by Occidental, Chevron, Bill Gates and others. “The plant will be funded through 1PointFive, which is owned by the company’s venture arm, Oxy Low Carbon Ventures, and private equity from Rusheen Capital Management LLC.”
To achieve climate goals “the world will need to bury as much as 10 billion tons of CO2 underground annually by 2050.” That would account for about “a quarter of current global emissions” and be worth “$1.4 trillion” annually.