One of the largest oil producers in the US has a novel product in its portfolio that aims to clean up the climate pollution that still emanates from its petroleum business. His plan is to sell customers supposedly green credentials to show the world. That risks giving polluters a license to keep polluting, critics say, positioning Big Oil as a heavyweight in the carbon removal and trading business.
That’s all Sinking in Texas, where oil giant Occidental was recently announced plans for a massive climate tech project. Occidental has signed an agreement to lease over 100,000 acres within the historic King Ranch where it plans to build Direct Air Capture (DAC) facilities capable of capturing millions of tons of carbon dioxide from the air. Once the CO2 is out of the atmosphere, the greenhouse gas will be stuffed underground where it cannot heat the planet. Then Occidental can issue credits for every tonne of CO2 it captures and sequesters.
Give polluters a license to continue polluting the environment
“At King Ranch, we intend to use DAC to provide carbon removal credits that other industries and companies, particularly those that are difficult to decarbonize like aviation, or companies committed to a net-zero commitment, can buy to meet their climate goals,” said William Fitzgerald, a spokesman for Occidental subsidiary 1PointFive The edge in an email following the King Ranch announcement. The company declined an interview to further discuss its plans.
It is a scheme similar to other carbon credits. Offsets work like this: companies pay to support forestry or renewable energy projects, and the good that those projects do for the planet is said to offset the company’s emissions. This allows companies to claim they are carbon neutral even as their pollution levels increase. They just offset their carbon footprint, perhaps by planting a certain amount of trees for every ton of CO2 they emit.
Now companies also have the option to invest in a direct air capture plant instead of a forest to clean up its mess. But that doesn’t get to the root of the problem, say environmentalists The edgebecause it doesn’t stop the company from polluting the environment in the first place.
“It’s all wrong. It is deeply flawed because it ultimately gives the fossil fuel industry a way out. So the fossil fuel companies and industry can carry on as usual,” said Tamra Gilbertson, program coordinator for climate justice at the Indigenous Environmental Network, based in North America.
Human activities have pumped so much greenhouse gas pollution into the atmosphere that figuring out how to remove some of that carbon dioxide has become “inevitable,” according to a major climate report released this year by the United Nations Intergovernmental Panel on Climate Change. But this report also emphasizes that CO2 removal should address those legacy emissions and any stubborn emissions that remain from really hard-to-decarbonize industries like aviation, since big planes don’t work the way cars or because of the batteries we’ve had so far Trucks that run on renewable energy are just too heavy to fly.
In other words, credits for CO2 removal from direct air capture should not be a card for polluters who can choose to switch to renewable energies like wind and solar. So even for proponents of direct air capture, “how these credits are used is a big part of the issue right now,” says Danny Cullenward, policy director at CarbonPlan, a nonprofit organization that analyzes climate solutions. If a company buys carbon credits in addition to reducing its own pollution, then it might actually be able to tackle some of the legacy pollution that’s heating up the planet.
Cullenward also thinks carbon removal credits can avoid some of the erroneous carbon accounting that has plagued traditional carbon offset projects. These carbon offsets already have an ugly track record of failing to reduce emissions. But it could be much easier to measure exactly how much CO2 a DAC system captures than, for example, to estimate how much additional CO2 a reforested area removes. Cullenward also sees oil and gas companies as being useful in managing and storing captured CO2 because of their experience working with underground wells.
But even people who are less skeptical about Occidental’s entry into the decarbonization business are divided on what that means for the future of the fossil fuel industry. “It’s not ‘all oil is bad,’ but it’s absolutely that we don’t want direct air capture so we can continue producing oil and gas,” says Cullenward.
Occidental has already used its Texas carbon capture plans to sell “net-zero oil.”
On the other side is Josh Rhodes, a research scientist at the University of Texas at Austin who studies energy systems. He doesn’t see much bad in Occidental keeping some of its oil and gas business afloat as long as the company deals with the pollution it creates. “If they can do that in a carbon-free way, I think I’m OK with that, because at the end of the day, people need energy and we need to clean up the climate,” says Rhodes.
Occidental has already used its Texas carbon capture plans to sell “net-zero oil.” It’s basically just oil made with the help of CO2 that fossil fuel companies are shooting into depleted oil fields in a process called “augmented oil recovery.”
And although that branding attracted Occidental’s first major net-zero oil customer this year, it angers environmentalists. “These oil and gas companies are actually using technology that claims to help reduce emissions [to] to extract oil that would not be commercially viable without these methods,” said Adrien Salazar, policy director at the non-profit organization Grassroots Global Justice. “It’s incredibly frustrating to see oil and gas companies trying to set up these wrong solutions to keep making profits from their products.”
For groups like the Indigenous Environmental Network, which represent people who have borne the brunt of environmental damage from fossil fuels, direct air capture and carbon trading are still systems behind which polluters hide. And any plan to manage carbon dioxide without considering the other harms that come with extracting, spilling, and burning fossil fuels is a dangerous distraction for Gilbertson, who points to the fact that coal mining and pipeline development are affecting indigenous people’s lands.
In a way, much of the hype surrounding direct air capture is extremely premature. This technology has yet to prove that it can work on a commercial scale. Only 18 direct air capture systems are currently in operation worldwide. Their total capacity of 0.01 million tons of CO2 per year is just a tiny fraction of what Occidental hopes to achieve. The company’s goal is to capture around 30 million tons of CO2 in Texas every year.
While still a long way from that goal, it is already selling some of its products to customers looking for a green solution to their problems. 1PointFive, the Occidental subsidiary that uses Direct Air Capture in Texas, has already sold 400,000 tons of carbon removal credits from its first DAC project to aerospace company Airbus. This project only laid the foundation stone this year and is not scheduled to go online until the end of 2024. So Airbus and Occidental literally count chickens before they hatch.
“Maybe [Occidental]I just read the writing on the wall,” says Rhodes. “Whereas at the moment this can be a very small, expensive thing. It could become a lot more lucrative in the future, especially if they’re among the first to market and are able to offer a service that’s only going to get more popular.”
The world must ultimately phase out fossil fuel production in favor of renewable energy to prevent climate change from reaching whole new levels of destruction, according to a large consensus of research. In this sense, other startups are using direct air capture plants with no ties to fossil fuels, like a plant in Iceland that will capture carbon for companies like Microsoft for more than $600 a ton.
But the biggest direct-from-air capture plans in the works so far are those of Occidental, which will give fossil fuel interests a major platform in the carbon removal and trading business. Tech giants like Stripe, Meta, and Alphabet have also invested heavily in direct air capture. Proponents see this investment as crucial to ensure the technology can be scaled enough to have a significant impact on climate. Otherwise, direct air capture remains prohibitively expensive. Meanwhile, critics fear polluting industries are gaining too much leverage when it comes to developing climate solutions.
“I think we’re going to see a split in the direct air capture community between companies that have decided not to bother with legacy oil and gas operations at all,” Cullenward said. “And those who engage directly.”