Oxy to shift into 'carbon management company'

Occidental Petroleum said Wednesday its plan to get to net-zero greenhouse gas emissions by mid-century would rely heavily on direct air capture and carbon storage sites.

In a detailed report, the Houston-based oil company said it would open its first commercial-scale carbon storage site and a facility to remove carbon dioxide directly from the atmosphere by 2025. By 2040 Occidental would have expanded those operations to the point it would only use manmade carbon dioxide in its oil operations.

CEO Vicki Hollub described Occidental as transforming into a "carbon management company," in an interview with the energy research firm IHS Markit.

"We are leveraging our expertise in carbon management and storage,” she said in a statement. “We will do this through innovation that reduces the impact of our and others’ operations in ways that benefit and expand our business.”

The plan follows on from an announcement last month that Occidental would not only get its own operations to net-zero emissions but the company's entire product line, including oil and petroleum-based fuels. They are the first and only major U.S. oil company to make such a pledge, though Conoco Phillips has announced plans to get its own operations to net zero.

In order to achieve that larger goal while still selling carbon-rich oil and natural gas, Occidental will need to find ways to remove carbon from the atmosphere on a large scale.

To that end, the company envisions an international carbon capture and storage operation, complete with carbon pipelines and new industries that utilize carbon dioxide to make various products - Occidental itself plans to use carbon to make chemicals.

"While we recognize the magnitude of our ambitions to achieve net-zero for our operations and products, we believe our pathway and capabilities can extend beyond our own corporate inventory," read a climate report released by Occidental Wednesday.

Occidental already has plans in place to build a direct air capture facility on a 100-acre site in the Permian Basin, with construction scheduled to begin in 2022. They are partnered with the California private equity firm Rusheen Capital Management and the Canadian technology firm Carbon Engineering. Carbon Engineering already operates a direct air capture facility in British Columbia as a pilot project.

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