At the beginning of this year, Occidental Petroleum shared its plans to extract half a million tons of carbon dioxide out of the atmosphere per year using the “direct air capture” technology. Occidental Petroleum will then pump the extracted CO2 into oil fields. The CO2 will help release trapped oil leading to increase production in return.
From the face value, increasing oil production may seem counterproductive: to reduce climate impact and lower the global temperature rises to 1.5 degrees C, the Intergovernmental Panel on Climate Change (IPCC) recommends the need to reduce oil consumption by about 40-70% by 2050. With that said, will pumping CO2 into the ground to produce more oil actually help reduce the impact of climate change?
Well, yes, but it requires a closer look. Current models on climate change reveal that removing CO2 from the atmosphere on a large scale can play a critical role in reducing global warming to 1.5 degrees C. However, we first need to develop an advanced technology that can reduce the cost of CO2 extraction at a large scale globally. At the moment, the best available approach that Occidental has taken is to couple direct air CO2 capture with an enhanced oil recovery technology (also known as CO2-EOR).
CO2-EOR is not currently widely understood and adopted, but it’s a powerful approach to reduce oil emissions until we figure out how to completely transition to clean energy.
Carbon extraction –The next Frontier
Occidental Petroleum is still expected to be a big player in the oil industry, but natural gas and oil may not be the biggest revenue sources. Vicki Hollub, the CEO and president of Occidental is confident that carbon extraction and storage would be the biggest source of revenue.
Vicki Hollub, in the Unconventional Resources Technology Conference, described the plans Occidental is implementing to scale up its carbon capture business –starting with an installation in the Permian Basin, which can capture up to 1 million tons of CO2 yearly. Construction of this facility is expected in 2023.
While Occidental will also be capturing CO2 from industrial emissions, the primary highlight is extracting CO2 directly from the air. The extraction facility is being set up by Oxy Low Carbon Ventures. Occidental plans to have similar facilities in Colorado, Abu Dhabi, and Wyoming, which is expected to reduce the cost of CO2 extraction.
The Cost and Efficiency
The Occidental team understands that the cost of capturing CO2 is quite high. To bring down the cost, Oxy is looking into ways to increase the efficiency of the projects. The units will be equipped with incredibly large industrial fans to pull in the air using potassium hydroxide to remove the carbon dioxide.
The company is banking on its other technology, Net Power, to improve on the carbon capture technology. The Net Power method adds oxygen as hydrocarbons are combusted to generate electricity. The generated CO2 is then recycled using the combustor, heat exchanger, turbine, and compressor, generating power with no emissions.
Partnerships and Way forward
Occidental is partnering with United Airlines to help pay for the project, and they expect to bring on board other bigger players. The biggest use for the extracted CO2 remains pumping in the oil fields to produce more oil. At the moment, Occidental has the conventional fields and facilities able to produce 2 billion bbl of oil using carbon dioxide injections.
While CO2 injection is a quite enhanced method in oil recovery, its utilization is limited by the lack of affordable CO2, which initially has been captured from exhaust streams. The latter has had the challenge of removing impurities.
It’s expected that injections in conventional fields will increase oil recoveries from 45% to 65% according to the presentation by Occidental. Occidental and other like-minded inventors are looking at the need for carbon-capture businesses to devise ways of pulling CO2 out of the atmosphere and get rid of the biggest global warming culprit.
Partnering companies such as United Airlines are in on it intending to offset the carbon emissions released by burning jet fuel. There is currently no alternative to jet fuel, so airlines will have to leverage such innovations to offset their emissions.
References
https://finance.yahoo.com/news/edited-transcript-oxy-n-earnings-180000298.html
