The chief executive of Occidental Petroleum believes American oil and gas producers must get serious about emissions reduction and carbon capture or it faces the threat of stringent government regulations.
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Speaking to the Texas Independent Oil Producers and Royalty Owners Association, Vicki Hollub said the momentum for emissions reduction is growing rapidly.
Occidental has already set a goal to be “net zero” in terms of emissions by 2050, and Hollub said other producers need to get out in front of environmental regulators to ensure crushing limitations are not put in place.
“If we can get ahead on some of the regulations, some of the practices … we give the president some options,” she said. “We have President Biden's support (of carbon capture use and sequestration); we have the Pope supporting it … there’s a lot of support for carbon capture use and sequestration.”
Occidental’s plans for carbon capture are not just intended to for the company to be good environmental stewards; the plans call for the use of carbon dioxide emissions in the drilling of horizontal wells in the Permian basin, located in the US states of Texas and New Mexico.
Occidental already has agreements in place to take the carbon dioxide from two ethanol plants in Texas and one cement plant in Colorado, pump it to the Permian and put to use in its operations.
Hollub said Occidental is in the process of building a direct air carbon capture facility in the Permian which would dwarf any existing facility of its type.
The Occidental project would capture 1 million tonnes of carbon dioxide per year, while the current largest facility captures only 4,000 tonnes.
Companies from other industries, including United Airlines, have invested in the project.
“The way we’ll build more of these in the US and other countries is to help other industries do this as well,” Hollub explained. “(The airline industry) will have the opportunity to buy offsets from us to get to a net zero. The maritime industry is the same way; it will be difficult for them to lower their (emissions) without the purchasing of offsets.”
The Occidental chief executive said projects like the company’s Permian basin carbon capture facility must succeed in order for the industry to benefit.
The use of new technologies created with the help of tax credits, she said, would likely be more effective than a carbon tax. For this approach to succeed, however, Hollub said the entire industry must be on board.
“A carbon tax would be bad for TIPRO members, it would be bad for a lot of the industry and it would be bad for consumers,” she said. “It’s going to take us pushing in the right direction to get the right regulation in place that focused more on technology that enables us to afford it and stay away from things that are punitive, things that are wasted dollars.
“We need carbon management, not a carbon tax.”