Name: Big Oil's Hail Mary
Uploaded: 2020-03-16
Duration: 7 min 24 s
Description: Oil companies are betting big on “carbon capture” technology that sucks greenhouse gases out of smokestacks and the air. It could help a polluting industry remake itself. But is it too little, too late?

Fossil fuels represent about 80 % of energy consumption around the world. And the prediction is that absent some very, very unexpected shift, fossil fuels will go down to guess what? 74 % 30 or 40 years from now, so That suggests that the world's gonna have to deal with emissions from fossil fuels if it wants to deal with climate change, and that gets you very quickly to the notion of grabbing the emissions when coal or gas or oil are burned, and doing something with them other than allowing them to go back up into the sky where they contribute to climate change. Change. So that's the theory, CCS carbon capture and sequestration. the Permian Basin for decades has been kind of the iconic oil patch in the United States. The Permian Basin is a vast, vast swath of territory of Western Texas. In eastern New Mexico. This is area that was drilled initially early in the 20th century and kind of rose and fell and rose and fell. And for a while the Permian Basin was left for dead. A couple of decades ago, the really large oil companies Decided that the premium basin was sort of shot. What you need to understand is that, an oil field is pressurized naturally. It's as if you have a can of soda, and you open the can of soda, and suddenly you hear up, [ SOUND ], and then the pressure drops. So initially, once that pressure dissipated, the first thing to do is to inject water. Into that reservoir and water would push up the oil. And that works for a while until it doesn't anymore. And after the water doesn't work, the next step is to shoot carbon dioxide into the oil field. What's been going on in the Permian Basin for decades is that Oil companies have been getting carbon dioxide that they shoot underground to push up the oil from other fields elsewhere in the western United States, where for geologic reasons, the CO2 has settled under the earth. So think of it as literally sticking a straw in Fields have CO2 and then taking that CO2 pulling it out of the ground, sticking it into a pipeline at great expense, pressurizing the CO2 so it goes through the pipeline and piping that CO2 to the Permian Basin, where you then stick it down in oil wells to push up oil and no one thought much about the notion of doing that it seemed sensible. Until people started to talk about climate change. And the question was why pull the CO2 out of the ground when you could help deal with climate change by pulling CO2 out of the air. So the idea is, what if you could grab CO2 that is being emitted from smokestacks at coal fired power plants or natural gas fired power plants. Steel factories, etc ., and somehow grab that CO2, stick that CO2 in a pipe, and and take that CO2 into the oil field and shoot it down. Presto, if you can ramp that stuff up, theoretically, no more climate Climate change problem. Now we come to Occidental. Why are we talking about Occidental? Occidental as it turns out, is the biggest producer of CO2 aided oil in the Permian Basin and that is because Occidental decided to make acquisitions over the years, where it bought these oil fields. From the big majors that were leaving the Permian basin because they want to greener pastures largely offshore. So occidental has become very, very sophisticated and very knowledgeable about how you take CO2 injected into the ground to push up oil. So the question that occidental is dealing with is my oxygen I'll figure out how to get carbon dioxide not from These underground stores but rather for industrial sources or from the air. occidental made a very intentional decision. It was going to lobby hard in Washington for federal tax credit that was gonna be juicy enough that it was gonna provide the money that occidental would need to scale up carbon capture in a big way and if it worked occidental It would benefit oxy more than it would benefit other oil companies because oxy already had this massive infrastructure in the Permian Basin. This massive infrastructure take carbon dioxide, shoot it on the ground and produce oil. There is a mad dash now. People with bated breath watching the IRS tell the world How one can monetize those tax credits. And suddenly, people are about ready to pounce and announced lots of deals both on the capturing of carbon dioxide and on the injection of carbon dioxide. So this is a business. This is no longer a science project. This has been a science project for a long time suddenly and the reason that fortune is writing this story Is that suddenly this is poised to become a real business and potentially a very, very big business, not just in the Permian Basin, not just in Texas, not just in western America, not just in the United States but around the world. The history of action on the environment I think shows that [ MUSIC ] Action happens to the extent that action is perceived to be profitable. The question is, how does one orient global markets such that the financial incentive is to do clean stuff rather than do dirty stuff. One is. Money and the second is public pressure which in the words of Vicky Hollow the CEO of occidental is the social licence to operate. That is, for all kinds of reasons owing to societal pressure being intensified against oil companies these days. There is a collective my God going on in the industry broadly. And particularly in the oil industry, where the oil industry realizes that it's going to have to do something about its emissions not only the emissions from its own operations, but the emissions from its products when you and I and everyone else, burn oil in our daily lives. Look, it's a fool's errand to predict the future. But I think it is very safe to say that there is a rise in consciousness and concern about climate change that we are witnessing right now, that is fairly unprecedented. It is anybody's guess as to whether that concern We'll translate into action and is equal to the task. But what is absolutely certain right now is that there is an impetus that industry feels try to make this stuff work, to try to make a bark, a lot of of this technology now before their rivals grab it and make the bark That is different from what we've seen before. There is a race going on to scale up this technology, which is noteworthy and which seems to suggest, first of all, that the technology might do something about climate change. And second of all, That some people are gonna win big, and some people are gonna lose big. [ MUSIC ]

Oil companies are betting big on “carbon capture” technology that sucks greenhouse gases out of smokestacks and the air. It could help a polluting industry remake itself. But is it too little, too late?

Big Oil's Hail Mary

Features

It could help a polluting industry remake itself.