Occidental ‘doing more than Tesla’ to reduce carbon emissions
U.S. oil company Occidental Petroleum claims that it is doing more than American electric vehicle and clean energy company Tesla to reduce greenhouse gas emissions.
Vicki Hollub, Occidental chief executive, was quoted by the Financial Times as saying that the amount of CO2 the company pumped back underground in the oil extraction process exceeded the electric-car maker’s contribution towards decarbonizing the atmosphere through switching people away from combustion engines.
The statement reflects Occidental’s attempt to build up its carbon management business in response to investor demands over climate change.
“What we’re sequestering today takes essentially about 4 million cars off the road on an annual basis. It does more than what Tesla’s doing right now — although we need Tesla to continue what they’re doing. It’s going to take everything”, Hollub stated.
The media outlet did point out that Occidental CEO’s claims do not take into account the volume of carbon the company — which is one of America’s biggest fossil-fuel producers — pumps into the atmosphere from its operations and the burning of its oil.
And while it does inject about 20 million tonnes of CO2 back into the ground annually, it does so to make the extraction of more oil easier.
Occidental produced about 1 million barrels of oil equivalent a day in 2019. Doing so emitted about 28 million tonnes of CO2 equivalent from its operations. The subsequent burning of that oil by its customers in the form of petrol and other fuels and liquids emitted further 103 million tonnes of CO2 equivalent — though Occidental claims these so-called Scope 3 emissions were beyond its control.
On the other side is Tesla which delivered about 500,000 electric vehicles in 2020, most of which switched drivers away from combustion engines. According to the car manufacturer, its cars have cut U.S. emissions by about 3.7 million tonnes to date.
Comments by Hollub come as Occidental looks to expand the part of its business focused on the management of carbon emissions by capturing, reusing, and storing them. By 2050 it says the volume of emissions it replaces will equal those it creates.
It is the only significant U.S. oil producer with a target to cut emissions to net-zero both from its operations and those of its customers. The company also has plans to build the first large-scale direct air capture plant by 2023, which will pull carbon out of the atmosphere to be pumped underground.
Carbon management will generate as much revenue for the company as its chemicals business within 15 years, Hollub said. By 2050, it would account for more revenue than its oil and gas and chemicals businesses combined.
Occidental’s shift comes after the purchase of Anadarko for $56 billion in 2019, a deal that racked up billions of dollars in debt, and the coronavirus-induced oil price crash, which forced it to book hefty writedowns. The company’s shares have fallen more than 60 per cent since the beginning of 2019.
“We’re definitely going all in [on carbon management]”, Hollub said. “This is going to be huge for us”.