Two years ago, oil and gas company Occidental made headlines by acquiring carbon capture startup Carbon Engineering, a move hailed as a win-win for both parties. However, it has now come to light that Occidental's true intentions for the technology are far from altruistic. In a recent earnings call, CEO Vicki Hollub revealed that the company plans to use the technology to pump more oil, rather than reducing its climate impact as initially claimed.

Hollub's comments have sparked controversy, as they suggest that Occidental is more interested in exploiting the technology for financial gain than in using it to mitigate the environmental effects of its operations. The CEO compared the use of CO2 in enhanced oil recovery to fracking, the technology that sent U.S. oil and gas production skyrocketing. This approach would involve injecting CO2 into wells to force out more oil, a practice that could potentially unlock 50 billion to 70 billion barrels of oil.

The technology in question, direct air capture, is a costly process that removes CO2 from the atmosphere. While it has the potential to be a game-changer in the fight against climate change, Occidental's plans would seem to undermine this goal. The company expects to turn a profit by the end of the decade, thanks in part to incentives provided by the Inflation Reduction Act, which offers up to $130 per metric ton in 2026 for captured CO2 used in enhanced oil recovery.

This development is particularly noteworthy given the Trump administration's efforts to dismantle climate-related government incentives, including the Inflation Reduction Act. However, with support from companies like Occidental and ExxonMobil, it's possible that the tax credits could survive. This raises questions about the true motivations behind the acquisition of Carbon Engineering and the role of fossil fuel companies in the development of carbon capture technology.

Carbon capture has a long and complex history with fossil fuel companies, dating back to the 1970s when they first started pumping oil into dwindling wells using CO2 from underground deposits. In the early 1980s, pipelines were built to transport CO2 from Texas, but low oil prices prevented the technique from being widely adopted. More recently, NRG Energy built the country's first carbon capture facility attached to a coal-fired power plant, which was designed to capture about a third of one boiler's carbon dioxide and use it to boost production at a nearby oilfield.

While the facility, called Petra Nova, did increase production, it was not as successful as expected, and it was eventually shut down in 2020 due to low oil prices. The facility was later sold to JX Nippon. The story of Petra Nova serves as a cautionary tale about the challenges and limitations of using carbon capture technology for enhanced oil recovery.

Despite these challenges, direct air capture could potentially provide enough CO2 to make oil production carbon negative, meaning that the process of drilling the oil stores more carbon than burning it releases. However, this concept requires further study and development. The fate of federal incentives for direct air capture remains uncertain, but one thing is clear: fossil fuel companies like Occidental will continue to play a significant role in shaping the future of carbon capture technology.

In conclusion, Occidental's plans to use carbon capture technology to boost oil production rather than reduce emissions is a stark reminder of the complexities and contradictions inherent in the energy sector. As the world continues to grapple with the challenges of climate change, it is essential to scrutinize the motivations and actions of fossil fuel companies and to hold them accountable for their role in shaping the future of our planet.