- Occidental Petroleum is building a plant to capture 500,000 tons of carbon dioxide from the air as a way to meet climate goals and make money selling offsets.
According to Bloomberg’s article published on October 27, 2022, US oil giant Occidental Petroleum Corp. and Canadian startup Carbon Engineering Ltd. are preparing a site in the Permian basin in the US for a plant that will draw down 500,000 tons of carbon dioxide per year.
That’s according to Vicki Hollub, chief executive officer of Occidental. The ground-breaking ceremony for the direct air capture plant — slated to be 120 times larger than the world’s largest facility using similar technology — will happen on Nov. 29 and commercial operations are expected to begin at the end of 2024.
Hollub joined Bloomberg Green’s Zero podcast to discuss how Oxy (the company’s stock ticker and nickname) plans to reach net zero by 2050, including its goal of negating emissions from customers burning the oil and gas it extracts. Most of Oxy’s competitors in the US have climate targets that exclude customer emissions, which can make up more than 80% of the company’s total.
On the podcast, Hollub also discussed Oxy’s plans to focus more over time on carbon capture and sequestration versus exclusively fossil-fuel extraction. The company will be heavily relying on carbon-capture technology that traps emissions from industrial sources or from the air to be buried deep underground.
To fund its transition, Oxy is betting on revenue from offsets. Global corporations in the throes of establishing climate plans are seeking credible offsets to manage their carbon balance sheets, but there’s a more limited supply of carbon-removal offsets than there are for projects like forest protection and renewable energy that simply avoid emissions.
Oxy is also counting on the sale of “net-zero oil” that it plans to produce by injecting more CO2 into oil reservoirs than is emitted by the process of extracting and burning the oil. The process, called enhanced oil recovery, pushes out more oil from reservoirs than other techniques. For now, Oxy only uses CO2 from underground mines rather than the excess CO2 in the atmosphere or the emissions from industrial sources. But switching up those sources, if done right, could result in a climate gain rather than the climate harm being caused today.
