60 FORTUNE APRIL 2020about the coronavirus—and a global petroleum-price
war—sent oil-company shares tumbling this March, Oxy
was trading around a 15-year low, burdened by debt
from a recent acquisition. And its CO 2 -fueled position in
the Permian is core to its viability. So from its Houston
headquarters, whose walls are hung with glamour shots
of oil rigs, Oxy is making a series of bold CCS bets. One
is on a contraption of massive fans that would suck CO 2
from the air. Another is a bid to establish what amounts to
a green-minded polluters’ club: a network in which some
of America’s biggest industrial emitters would capture and
sell CO 2 to Oxy, delivering it through an as-yet-unbuilt
pipeline bankrolled with the help of American taxpayers.
If the plans work, Oxy contends, the company will be
able to accurately say that much of its oil is “carbon nega-
tive”—actually good for the planet, because extracting it
would involve the safe disposal of more CO 2 than burning
it would emit. More immediately accretive to Oxy’s bottom
line, the move would boost its oil sales and also capture
subsidies governments are rolling out to companies that
can prove they’re capturing man-made, or “anthropogenic,”
CO 2. For Oxy, such a masterstroke might repaint its brown
corporate image green. It also could gird the company for a
future in which, more oil executives are coming to believe,
they will have to somehow neutralize emissions from their
hydrocarbons in order to continue selling them.
Vicki Hollub, Oxy’s CEO, tells me that she has concluded
that her company’s “social license to operate”—the consumer
and political buy-in any firm needs to sell its product—de-
pends on doing “all that we can do to address climate
change.” The trick will be to do so while satisfying share-
holders. Hollub argues Oxy’s CO 2 expertise is a competitive
edge in an industry ever more concerned about a warming
planet. “The world will transition out of fossil fuels, but it’s
going to take quite a long time,” she says. Along the way,
“the last barrel of oil produced in the world” should come
not from a new well but from an aging field, helped by CO 2.
“The carbon footprint is lower,” she says, “and it’s just more
efficient for the planet.” Like lemonade from lemons, her
environmental argument leverages her corporate portfolio.
Anthony Cottone, senior director for strategic develop-
ment at Oxy Low Carbon Ventures, a unit the companyland called the Permian Basin, the company
nicknamed Oxy has built a multibillion-dollar
web of infrastructure to manage vast quanti-
ties of the CO 2. The Permian rocks’ structure
makes them particularly giving of their oil
when their spongelike holes are coaxed with
the greenhouse gas in liquid-like form.
Oxy buys CO 2 drilled from natural forma-
tions in Colorado and New Mexico, then
sends it through thousands of miles of pipe-
lines, goaded by massive pump stations. At
the end of the line, the company blasts it into
thousands of wells that fan out like toy sol-
diers across the Permian, a booming chunk
of the American West that now accounts,
extraordinarily, for some 5% of global oil pro-
duction. Oxy’s setup amounts to a ruthlessly
efficient assembly line for hydrocarbons.
Now, amid rising consumer anger about
global warming and ballooning government
subsidies for companies working to solve it,
Oxy is attempting a stunning CO 2 pivot. It
hopes to stop pumping into its fields CO 2
extracted from the earth, and instead deploy
CO 2 sucked from man-made sources: from
power plants, factories, and even thin air.
The company’s ambition is to build into
a core business a process that has long been
little more than a science project: “carbon
capture and storage,” or CCS. It involves
chemically snagging CO 2 , typically as it’s
wafting out of smokestacks but also from
ambient air itself, and then injecting it into
subterranean rocks. The goal: Rather than
continue to dump CO 2 into the atmosphere,
where it’s thickening a chemical blanket
that’s warming the earth, humanity can bury
it underground, ostensibly forever.
Countless difficulties imperil the CCS
dream. Influential environmentalists oppose
it, arguing it diverts attention from renew-
able energy. Beyond principle, technical
dilemmas loom. One, now fueling a tech-
nological race, is how to slash the cost of
capturing CO 2 , which remains too expensive
to work without subsidy. Another, now
evolving into a high-stakes lobbying fight, is
how far regulators should go in forcing oil
companies to prove that CO 2 they’re sending
into rock stays safely where it’s put.
No member of Big Oil is gunning harder
for CCS than Oxy. Even before concernsA PLANET IN CRISIS : CARBON CAPTURE“OIL COMPANIES NEEDA REASON TO EXIST.IT’S A SECOND CHANCE.”ANTHONY COTTONE, AN EXECUTIVE AT OXY
LOW CARBON VENTURES, ON THE IMPORTANCE
OF ACTING TO REDUCE ATMOSPHERIC CO 2CAR.W.04.20.XMIT.indd 60 FINAL 3/10/2020 8:24:16 PM