Oxy Expands CCS Ambitions Abroad

Copyright © 2021 Energy Intelligence Group

Occidental Petroleum is looking to put its new direct air capture (DAC) facilities in oil and natural gas basins around the world as the company ramps up efforts to not only mitigate its own carbon emissions but turn carbon management into a viable business.

Oxy is eyeing sites in its oil and gas fields in Oman and Abu Dhabi for DAC facilities, CEO Vicki Hollub told the Energy Intelligence Forum 2021.

The US giant already had plans for 12 or more large-scale DAC facilities in the Permian Basin as well as sites in the Denver-Julesburg and Powder River Basins in the US.

The plan to take the DAC plants abroad is an expansion of Oxy’s previous plans, which centered on its large asset base in the US.

“We believe we can put these anywhere around the world, and that direct air capture is going to be the most important technology developed for the energy transition," said Hollub.

Strategic Cornerstone

Oxy has made DAC technology a centerpiece of both its energy transition and emissions reduction strategies. It has partnered with — and invested in — Canadian start-up Carbon Engineering, and hopes to use its own long history of working with carbon dioxide in enhanced oil recovery (EOR) to build an economic model for its DAC aspirations.

Oxy contracted with engineer Worley earlier this year to begin work on the first DAC plant in the Permian.

DAC is a relatively new technology compared to other carbon capture techniques that focus on collecting carbon from industrial emissions, which is where many other oil and gas companies have focused their CCS plans.

That point-source capture is more efficient than DAC, but Hollub said she simply isn’t seeing any movement from major emitters to retrofit their facilities with carbon capture equipment.

“I don't see it happening unless it's required by regulation, and that's mostly international, so it's not happening today,” she said. “We can't wait for emitters to make the determination to retrofit.”

Catch and Employ

But capturing CO2 is only part of the equation. There also needs to be a use for it.

The most immediate is pumping the captured emissions into depleted oil fields to not only sequester it but also use it to push out additional oil.

Hollub pointed to oil produced by CO2-driven EOR as one of the only ways to meet the projections set out by the International Energy Agency that estimate the world will need some 19 million barrels of no-carbon liquid fuels by 2050.

“Using anthropogenic or atmospheric CO2 and enhanced oil recovery will generate low-carbon and net-zero carbon fuels, and that's what a lot of people are missing,” she said.

Beyond the business case, Hollub said the world needs DAC to have a chance of meeting the goals of the Paris Agreement as well.

“If you look at the concentrations of CO2 in the atmosphere, they've grown by 50% since pre-industrial times,” she said. “So we must make direct air capture work. It's not a 'nice to have' technology, it's an absolute 'have to have' technology.”

Bullishness is set to persist in the European natural gas market through winter as tight supplies and colder weather buttress prices.
Fri, Nov 26, 2021
Russia’s Gazprom plans record spending in 2022, with revenues boosted from high European gas prices.
Fri, Nov 26, 2021
How much profit inflation will consume will depend on the efficiency gains companies have made over the last few years.
Wed, Nov 24, 2021