Global carbon price "virtually impossible": Occidental CEO

Establishing a worldwide carbon price will be "virtually impossible" to achieve, Houston-based Occidental Petroleum CEO Vicki Hollub said in an online session organised by the Russian Skolkovo business management school on March 25.

"We have to move quickly with emissions reduction, not wait for a carbon price to happen," Hollub said in the session entitled Achieving net zero: Global Oil & Gas.

Industry should be the driving force behind emissions reduction, and oil and gas producers should cooperate with other sectors to create a premium for decarbonised energy, she said.

"What needs to happen, and I believe it will, is that people care enough about the planet to be willing to pay a premium," the CEO said. "Carbon pricing is not in our near future, and if we wait [to reduce emissions] until we can make it happen, we have waited too long."

Occidental has been pumping CO₂ underground in the US Permian basin for 40 year as part of its enhanced oil recovery programme. The company wants to build what will be the world's largest CO₂ direct air capture plant, capable of capturing up to 1mn metric tons/year of atmospheric CO₂, which can be injected into its reservoirs to increase pressure. Feasibility studies for the project are underway and construction should start next year, Hollub said.

Occidental also has a chemicals business, which can provide the polyvinyl chloride and potassium hydroxide that will be needed to capture the CO2.

The company has also reached agreements to take CO₂ from industry, including two ethanol plants and a cement plant. The company agreed terms on March 25 to also take CO₂ from NextDecade's Rio Grande LNG plant. NextDecade is looking to take a final investment decision on the first phase of the 27mn mt/yr terminal this year, and has said it wants to reduce the facility's CO₂ emissions by 90% using carbon, capture and storage.

"Our transition is going to be a process that adds value to our shareholder, because we're going to switch from organic CO₂ and move towards using anthropogenic and atmospheric CO₂," Hollub said. "The value for our shareholders is that it lowers the cost of CO₂ and provides us the long-term, sustainable source of CO₂.