Occidental Petroleum’s direct air capture (DAC) lowers the carbon intensity of oil, CEO Vicki Hollub has said, competing with sustainable aviation fuel (SAF).
Hollub, talking at the Energy Intelligence Forum, said the company would use DAC to capture CO2 to drive enhanced oil recovery (EOR).
That “provides a net zero or net negative barrel of oil”, she said. The technology can see more CO2 injected into the reservoir “than the incremental barrel of oil produced from that CO2 will emit when used. It’s a math equation.”
These barrels should be particularly valuable to those in the maritime or aviation sectors, Hollub said. Companies operating in those areas, she said, would be willing to pay a premium for Oxy’s barrels.
“Direct air capture shouldn’t be compared to point source carbon capture, what it should be compared to is [SAF],” the CEO said. SAF has more emissions than Oxy’s net zero oil, she continued. “The world needs both, our concern about [SAF] is that we cannot scale that up fast enough.”
Oxy is working on a first DAC plant, Stratos, with 500,000 tonnes per year of capacity. This is due online in mid-2025. The company agreed a deal to cement its control of a part-owned company, Carbon Engineering, in August for $1.1 billion.
Hollub was pilloried by the energy industry in 2019 when Oxy set out the plan to acquire Anadarko Petroleum. Now, though, this sentiment has shifted.
The CEO said that in the second quarter of 2020, when the pandemic took hold, “it was the Anadarko assets that carried us through. With Oxy as a standalone, it would have been tougher for us.”
The Anadarko deal saw Oxy shift its focus to the domestic US market, trimming its international exposure. Hollub said this move had been taken in order to mitigate risk. “Our low-carbon ventures business needed a lot more stability and certainty in our oil and gas upstream.”