CEOs of Occidental and Worley on Building World’s Largest “Direct Air Capture” Facility and the Burgeoning Industry of Carbon Capture
The carbon capture business is going to be an industry, and a big one at that, says Vicki Hollub, president and CEO of Occidental Petroleum in the latest episode of CERAWeek Conversations.
“It’s going to be a probably $3-5 trillion industry if you look at how much carbon capture is going to be needed around the world,” Hollub says. “We think ultimately it’s going to generate as much earnings and cash flow as our oil business does today. We believe it’s a long-lasting business.”
In a conversation with Daniel Yergin, vice chairman, IHS Markit (NYSE: INFO), Hollub and Chris Ashton, CEO and managing director of Worley discuss their partnership to build a large-scale direct air capture facility in the Permian Basin—expected to startup in 2024—and the potential to scale the technology further.
“One of the big contributors to addressing the economic viability of this is the fact that we are working together in an integrated, innovative way,” says Ashton. “So many inefficiencies exist in a way that traditionally supply chains interact. We’ve taken a big step forward in the way we’re working together.
“Once the direct air capture technology that we’re working on together is up and running and we clearly demonstrate that it works and is viable, the scaling opportunities are immense,” he adds.
“There needs to be a lot of these built over time,” Hollub says in discussing broader plans to build up to 12 facilities in the Permian, along with ambitions to ultimately build facilities elsewhere in the United States and internationally. “That’s the only way we can cap global warming at 1.5 degrees. This has to happen in a big way.”
In addition to carbon capture, Hollub and Ashton discuss their thoughts on the state of U.S. shale production amid tightening oil markets and rising prices; new challenges and strategies for large-scale capital projects in the energy transition; the potential for hydrogen, and more.
The complete video is available at: https://ondemand.ceraweek.com/cwc
Interview Recorded Monday, October 4, 2021
(Edited slightly for brevity only)
On direct air capture and its role in the future of energy:
Vicki Hollub: “Our plan is to use multiple processes, one of which is the sequestration of CO2 in oil reservoirs to generate a net negative barrel of oil. Currently the world is only making 1.6 million barrels of oil per day of synthetic or low-carbon fuels. To make what the world needs to make, which according to the IEA model for net zero by 2050, we need to make then 19 million barrels of [synthetic or low-carbon] oil. Direct air capture will produce the CO2 that enables us to produce and make up part of that production by 2050.”