CHICAGO (Reuters) - Occidental Petroleum Corp plans to shift toward a carbon-neutral production model, it chief executive said on Thursday, but new U.S. laws are needed to support technologies designed to fight global warming.
Occidental, which recently purchased oil producer Anadarko Petroleum in $38 billion deal, is advancing its use of technologies to capture carbon, and prevent the element from escaping into the atmosphere.
To make this a reality on a large scale, though, legislative change is needed, Occidental CEO Vicki Hollub told nearly 200 investors, government leaders and carbon sequestration companies at an Oil and Gas Climate Initiative investments conference in Chicago.
While Congress has adopted tax credits for sequestration products, new laws are needed to support development of carbon sequestration infrastructure, she said.
She urged attendees to call on Congress to support legislation to facilitate the permitting and development of carbon capture sequestration projects and carbon dioxide pipelines.
Such a bill could give gives carbon sequestration technology a funding boost similar to what solar, wind and other technologies have already received.
Carbon sequestration technology works by trapping carbon in caverns or porous spaces underground.
Occidental injects 2.6 billion cubic feet per day of CO2 in the Permian Basin of Texas and New Mexico to aid in extraction of crude oil, according to the company’s website. The excess CO2 is recovered and reinjected until it largely becomes trapped underground.
Oxy will expand its efforts to capture carbon, use it in oil extraction and other processes, and store it, offsetting emissions from oil production and use, she said.
“There’s no way to cap global warming without significant sequestration and use of CO2,” she said. “That is part of our strategy. It’s got to happen in a big way.”.
Expanding carbon capture, use and sequestration will ultimately make the company’s global oil output carbon neutral, and not just in shale formations, Hollub said.
She said the company previously had a timeline for becoming carbon neutral, but is still adjusting the plans to reflect its Anadarko purchase. She said the industry’s move to carbon neutrality will take decades.
Skeptics have questioned carbon capture and sequestration but said it is needed to bring oil production to zero emissions, Hollub added.
“As much as some people want oil and gas to go away in the next couple of decades, it cannot,” she said. “What we can do is make sure all companies have access to these technologies.”
Reporting by Jessica Resnick-Ault; Editing by Tom Brown