Occidental Is Eyeing California’s Clean Fuels Market to Fund Texas Carbon Removal Plant

by Nicholas Kusnetz (Inside Climate News) The oil company plans to remove carbon from the atmosphere and pump it into the ground to extract oil in the Permian Basin. Some climate activists fear the new technology is a cover for continuing to sell oil. --

Occidental Petroleum is seeking to sell credits in California’s transportation carbon market to help finance the construction of what would be the world’s largest industrial carbon dioxide removal plant.

The operation would effectively invert what Occidental has done for a century, by taking carbon out of the air and sending it underground, even if on a relatively small scale.

But there’s a twist. Occidental has said it plans to use some or most of the carbon dioxide it captures from the Texas plant to squeeze more petroleum out of the ground, by pumping it into aging oil fields. As a result, the California carbon market, which is meant to help lower the climate emissions of transportation in the state, could supply tens of millions of dollars to help extract more oil, thereby contributing more emissions.

Occidental’s plans raise one of environmental advocates’ biggest concerns about carbon removal technologies: that they will be used by oil companies to delay the far more urgent task of rapidly transitioning away from fossil fuels. By allowing companies to sell credits for captured carbon dioxide used to produce oil, some advocates warn, California’s program is poised to do just that.

Still, the largest existing direct air capture plant, built by the Swiss start-up Climeworks, which has not partnered with oil companies, removes only 4,000 tons of carbon dioxide per year. Even if Occidental can realize its direct air capture ambitions to eventually remove 1 million tons annually at its Texas plant, the benefit would be miniscule on a planetary scale.

The question now is whether the technology can be pursued in such a way that it doesn’t distract or detract from the urgent task of phasing out fossil fuels. And many advocates warn there’s little hope of achieving that goal if the emerging direct air capture industry is built by oil companies.

Jeremy Martin, director of fuels policy at the Union of Concerned Scientists, said he thinks the state should “adjust” how it treats enhanced oil recovery. Like many environmental advocates who support carbon removal technologies, Martin said their promise is in helping address emissions from certain sectors, like aviation and heavy industry, that are extremely difficult or expensive to reduce.

“But I think it’s also really important not to lose sight of the fact that using these technologies to maximize emissions reduction as we’re transitioning off of petroleum, that’s what makes sense to us, that’s what our analysis supports,” Martin said. “It does not support using these technologies as an alternative to ramping down petroleum.”

In March, the Environmental Justice Advisory Committee for California’s Air Resources Board, which administers the LCFS, submitted draft comments recommending that enhanced oil recovery projects be barred from the system, warning that allowing them increases emissions and extends the life of “highly polluting facilities.”

The plant would be powered with a combination of renewable energy, generated specifically for its operation, and natural gas. Carbon Engineering’s designs include equipment to capture the emissions from burning the natural gas as part of the plant’s operations. READ MORE