Today, Lagano says, NRG has new hopes for Petra
Nova’s profitability. One reason is Texas know-how: NRG
and its partners expect, as they’re getting more familiar
with the oilfield, to boost production. A more immedi-
ate reason is Washington politicking: A newly generous
carbon-capture tax break is about to start flowing.THE TAX CREDIT, passed in 2018, succeeds
a much-smaller prior version. It results
from six years of oil-industry lobbying, in
large part by Oxy. When I ask Oxy’s Hollub
whether that push was defensive, to ensure
her industry didn’t lose ground to renewables, or offensive,
to win Oxy market share over oil rivals, she doesn’t flinch. “It
was, without a doubt, an offensive move,” she says.
The subsidy gives operators of CCS projects, for 12 years,
a tax credit ramping up to $35 for every metric ton of man-
made CO 2 they catch and deploy to boost oil production. It
gives them a credit reaching $50 for every metric ton they
capture and shoot into a different sort of geology, filled not
with oil but with salty water. Studies suggest underground
“saline aquifers” could be stuffed with quantities of CO 2 that
dwarf those in oilfields—indeed, that could entomb global
emissions through the end of the century.
Once Oxy won the subsidy, it raced to take advantage of
it. In 2018, it created Oxy Low Carbon Ventures, essentially
a low-carbon skunkworks. Its marching orders were “to re-
place natural CO 2 with anthropogenic CO 2 ” in the Permian,
says Robert Zeller III, a buttoned-down chemical engineer
and Oxy lifer who was tapped as the unit’s vice president for
technology. Zeller and I are speaking at Oxy’s headquarters,
in a windowless and mirthless conference room. Oxy won’t
let me meet with Zeller in his office, in part for fear, the
spokeswoman overseeing the discussion explains, that I’ll
see something on the walls that’s too revealing.
In plain English, says Zeller, his unit’s mandate was: “You
have a blank palate. Go figure it out.” The team figured it
out—through some calculations that bowled them over.
Burning a barrel of oil typically coughs out about 8,000 cu-
bic feet of CO 2 , Zeller says. The team realized that Oxy typi-
cally shoots about the same quantity of CO 2 into the Permian
to produce each barrel of enhanced-recovery oil. That meant
that if Oxy could capture enough CO 2 to replace the natural
CO 2 it was using, it could call that oil “carbon-neutral.” The
equation would be even more compelling in certain regions
where the geology requires more CO 2 to push out every bar-
rel. CCS-produced oil from those formations could be not
just carbon-neutral, but actually carbon-negative.
“That,” Zeller says, “was the eureka.”
To capture CO 2 , Oxy is pursuing two parallel paths. The
sexy one aspires to grab the gas from thin air. Studies
have concluded that if enough CO 2 could be economically
vacuumed out of the sky, the climate could benefit materi-
ally. A handful of “direct air capture” startups have sincebecome investor darlings. Bill Gates was an
early backer of a Canadian firm called Carbon
Engineering, which has built a pilot plant in
British Columbia. Oxy invested in Carbon
Engineering in January 2019, after conclud-
ing its technology is particularly scalable in
oilfields. (U.S.-based oil major Chevron also
invested in the firm. Neither oil giant will say
how much it put in.)
The challenge is to slash the technology’s
cost. Zeller says Carbon Engineering’s first
commercial-scale plant will be up and run-
ning in the Permian by 2023. It will be sized
to take from the sky 1 million metric tons of
CO 2 yearly, roughly as much as is coughed out
by 216,000 cars. The plant’s likely cost: $1 bil-
lion. “The first of a kind is going to cost too
much,” he says, but Oxy intends to position
potentially dozens more such facilities in the
region, at which point Zeller expects the cost
for each to fall at least 30%.
Oxy’s less-sexy strategy is to lock down a
supply of anthropogenic CO 2 from smoke-
stacks, Petra Nova–style. It has mapped
the locations of America’s biggest emitters:
power plants, steel plants, petrochemical
plants, and more. Oxy executives won’t show
me their map—it’s presumably one of the
things on their walls I’m not supposed to
see. But emissions data is publicly available,
and as CCS enthusiasm spreads, such maps
line the walls of more and more offices in the
oil patch. They show hotspots in Midwest
coal-burning country and throughout the
Texas and Louisiana oil colossus. Oxy is now
scrambling to line up deals for the CO 2 these
polluters are releasing into the atmosphere.
It’s also now lobbying Washington for an-“THE FIRSTOF A KINDIS GOING TOCOST TOO MUCH.”ROBERT ZELLER, AN OCCIDENTAL EXECUTIVE,
ON THE PROJECTED $1 BILLION PRICE TAG OF THE
COMPANY’S FIRST CARBON-CAPTURE PLANTA PLANET IN CRISIS : CARBON CAPTURECAR.W.04.20.XMIT.indd 63 FINAL 3/10/2020 8:24:18 PM