1 00:00:00,200 --> 00:00:05,600 Speaker 1: Welcome to zero. I'm akshatrati this week fugitive emissions, big 2 00:00:05,600 --> 00:00:21,000 Speaker 1: Oil's big back, and sunk costs. While reporting on climate issues, 3 00:00:21,040 --> 00:00:24,680 Speaker 1: it's impossible to ignore the oil industry. While the industry's 4 00:00:24,720 --> 00:00:28,159 Speaker 1: denial of climate change has undoubtedly slowed down action to 5 00:00:28,280 --> 00:00:31,240 Speaker 1: cut emissions, it's crucial to have the industry be a 6 00:00:31,280 --> 00:00:34,199 Speaker 1: part of the solution because we are on a deadline. 7 00:00:35,680 --> 00:00:37,800 Speaker 1: One oil company that wants to be a part of 8 00:00:37,800 --> 00:00:42,280 Speaker 1: that solution is Occidental Petroleum better known as OXY, and 9 00:00:42,400 --> 00:00:45,519 Speaker 1: since twenty sixteen, it has been led by Vicki Hollab, 10 00:00:45,800 --> 00:00:48,839 Speaker 1: who is responsible for setting the first science based climate 11 00:00:48,880 --> 00:00:53,159 Speaker 1: target for a US oil company. Typically, when oil companies 12 00:00:53,200 --> 00:00:55,640 Speaker 1: have set climate targets, it has meant a push for 13 00:00:55,680 --> 00:00:59,480 Speaker 1: renewables and maybe even a promise to cut oil production. 14 00:00:59,520 --> 00:01:03,520 Speaker 1: In the few BP is building wind turbines, Shell is 15 00:01:03,560 --> 00:01:07,640 Speaker 1: investing heavily in hydrogen, and Total is pouring money into 16 00:01:07,720 --> 00:01:12,360 Speaker 1: lithium ion batteries. VIKI and Oxy are making a different bed. 17 00:01:12,800 --> 00:01:15,480 Speaker 1: I think that anybody who says that we can go 18 00:01:15,520 --> 00:01:18,800 Speaker 1: one hundred percent renewable today is speaking from emotion and 19 00:01:18,880 --> 00:01:23,319 Speaker 1: passion and not logic. VIKI sees oil and gas consumption 20 00:01:23,400 --> 00:01:26,840 Speaker 1: rising well into the future, and wants to meet Oxy's 21 00:01:26,880 --> 00:01:30,240 Speaker 1: climate targets by capturing the emissions from the fossil fuels 22 00:01:30,360 --> 00:01:34,959 Speaker 1: It extracts. What Oxy wants to sell, as unbelievable as 23 00:01:35,000 --> 00:01:38,880 Speaker 1: it might sound, is net zero oil. If that sounds 24 00:01:38,880 --> 00:01:43,039 Speaker 1: like greenwashing, your instinct is right, because green washing is 25 00:01:43,120 --> 00:01:45,880 Speaker 1: rife in the oil industry, and that is exactly why 26 00:01:45,920 --> 00:01:49,080 Speaker 1: the bar is high for any oil company now saying 27 00:01:49,120 --> 00:01:52,040 Speaker 1: they want to go green. Given the oil industries heft 28 00:01:52,080 --> 00:01:55,200 Speaker 1: in the global economy, it's important to hear from those 29 00:01:55,280 --> 00:01:58,120 Speaker 1: in the seats of power about how they are thinking 30 00:01:58,200 --> 00:02:01,200 Speaker 1: of acting on the climate crisis, and it is rare 31 00:02:01,240 --> 00:02:03,400 Speaker 1: to be able to sit down with someone like Wiki, 32 00:02:03,640 --> 00:02:06,320 Speaker 1: who leads one of the world's biggest oil companies and 33 00:02:06,480 --> 00:02:09,720 Speaker 1: is willing to take all my questions. Before we get 34 00:02:09,720 --> 00:02:13,079 Speaker 1: into the conversation, it's worth knowing that carbon capture, the 35 00:02:13,120 --> 00:02:16,200 Speaker 1: main technology that Wiki is relying on, has a long 36 00:02:16,240 --> 00:02:20,200 Speaker 1: and well documented history of failure, especially when it comes 37 00:02:20,240 --> 00:02:23,799 Speaker 1: to its use for climate purposes. Oxy says it can 38 00:02:23,880 --> 00:02:27,400 Speaker 1: overcome those hurdles. There are two technical terms you should 39 00:02:27,400 --> 00:02:30,160 Speaker 1: also know going into this interview. We talk a lot 40 00:02:30,240 --> 00:02:34,000 Speaker 1: about enhanced oil recovery or e R, which is a 41 00:02:34,040 --> 00:02:38,200 Speaker 1: process where carbon dioxide is injected into reservoirs to help 42 00:02:38,240 --> 00:02:42,440 Speaker 1: produce more oil. We also focus on direct air capture, 43 00:02:42,600 --> 00:02:46,000 Speaker 1: a technology that extracts carbon dioxide from the air so 44 00:02:46,040 --> 00:02:49,960 Speaker 1: that it can be permanently stored away. I wanted to 45 00:02:50,000 --> 00:02:53,359 Speaker 1: hear from Wiki about Oxy's push to build direct air 46 00:02:53,400 --> 00:02:56,440 Speaker 1: capture facilities, how she plans to pay for all this, 47 00:02:56,800 --> 00:03:00,480 Speaker 1: and why she's chosen this path as Oxy's response to 48 00:03:00,560 --> 00:03:15,079 Speaker 1: climate change. Wiggy, Welcome to Zero. Thank you, it's great 49 00:03:15,120 --> 00:03:18,600 Speaker 1: to be here now. As CEO of Oxy, you have 50 00:03:18,720 --> 00:03:21,799 Speaker 1: made Oxy the first usl company that has set a 51 00:03:21,960 --> 00:03:24,600 Speaker 1: net zero by twenty fifty goal. You were there before 52 00:03:25,040 --> 00:03:28,120 Speaker 1: your competitors in the US at least, and that covers 53 00:03:28,200 --> 00:03:32,079 Speaker 1: all emissions, so emissions you produce in your own assets, 54 00:03:32,120 --> 00:03:36,520 Speaker 1: but also emissions that would be produced by consumers burning 55 00:03:36,600 --> 00:03:41,120 Speaker 1: oil and gas that you produce. Typically, when these goals 56 00:03:41,120 --> 00:03:43,320 Speaker 1: are to be met by an oil company, they are 57 00:03:43,440 --> 00:03:47,120 Speaker 1: through moving towards renewables. You are not doing that. You 58 00:03:47,160 --> 00:03:49,600 Speaker 1: are betting that the world is going to continue to 59 00:03:49,680 --> 00:03:52,080 Speaker 1: use oil and gas for quite some time. Yeah. I'll 60 00:03:52,120 --> 00:03:54,920 Speaker 1: start with the reason we're doing it this way. We've 61 00:03:54,920 --> 00:03:58,280 Speaker 1: been using CEO two for an hastall recovery for about 62 00:03:58,280 --> 00:04:01,839 Speaker 1: fifty years and we're the largest user of CO two 63 00:04:01,880 --> 00:04:04,640 Speaker 1: for enhanced or recovery in the world. So it's our 64 00:04:04,640 --> 00:04:09,600 Speaker 1: core competence. And as you said, some companies are moving 65 00:04:09,640 --> 00:04:14,440 Speaker 1: toward building and distributing renewables. We're not doing that because 66 00:04:14,440 --> 00:04:17,280 Speaker 1: that's not our core competence. And we feel like our 67 00:04:17,320 --> 00:04:22,039 Speaker 1: contribution to the world can be a differentiated approach where 68 00:04:22,240 --> 00:04:25,000 Speaker 1: we will continue to actually grow our oil and gas production, 69 00:04:25,440 --> 00:04:27,560 Speaker 1: but we'll grow it in a way that gives us 70 00:04:27,600 --> 00:04:32,559 Speaker 1: the opportunity to generate net zero carbon oil. Now we'll 71 00:04:32,640 --> 00:04:36,040 Speaker 1: touch upon different aspects of that answer, but maybe let's 72 00:04:36,040 --> 00:04:39,320 Speaker 1: just start a bid. The motivation to do it. Was 73 00:04:39,360 --> 00:04:42,640 Speaker 1: there a moment in your time at Oxy, maybe even 74 00:04:42,680 --> 00:04:45,120 Speaker 1: before you was CEO, that you thought this is the 75 00:04:45,240 --> 00:04:48,599 Speaker 1: route that the company must take. Yes. I became general 76 00:04:48,640 --> 00:04:53,359 Speaker 1: manager of our Permian EOAR operations back in two thousand 77 00:04:53,440 --> 00:04:57,479 Speaker 1: and eleven, and we did a review of all of 78 00:04:57,480 --> 00:05:00,680 Speaker 1: our oil and gas conventional assets and the Iermian basin 79 00:05:01,120 --> 00:05:04,440 Speaker 1: and realized we didn't have enough CO two to fully 80 00:05:04,480 --> 00:05:08,159 Speaker 1: develop the resources that we had, so we started looking 81 00:05:08,200 --> 00:05:11,760 Speaker 1: at other sources to get the CO two one was anthropogenic. 82 00:05:13,160 --> 00:05:16,080 Speaker 1: All Wiki is talking about here is the carbon dioxide 83 00:05:16,120 --> 00:05:18,640 Speaker 1: that comes from burning fossil peels, you know, the one 84 00:05:18,720 --> 00:05:21,719 Speaker 1: that's causing all that problems. Later she also talks about 85 00:05:21,920 --> 00:05:25,240 Speaker 1: organic CO two. Might sound weird, but if you can 86 00:05:25,279 --> 00:05:28,520 Speaker 1: find natural gas underground, then it's not shocking that there 87 00:05:28,600 --> 00:05:31,520 Speaker 1: is also carbon dioxide in the same places. And all 88 00:05:31,560 --> 00:05:35,880 Speaker 1: companies have been extracting that cootwo well for increasing oil production. 89 00:05:36,320 --> 00:05:38,640 Speaker 1: The Permian Basin is one of the best sources in 90 00:05:38,680 --> 00:05:42,679 Speaker 1: the world for mining COO two. So getting CO two 91 00:05:42,760 --> 00:05:46,960 Speaker 1: from points sources industrial sites was a way that we 92 00:05:47,080 --> 00:05:53,480 Speaker 1: could continue generating incremental world production. But what we've realized 93 00:05:53,520 --> 00:05:57,080 Speaker 1: as we went along that something we didn't know was 94 00:05:57,160 --> 00:05:59,400 Speaker 1: that there was fifty percent more CO two in the 95 00:05:59,400 --> 00:06:03,839 Speaker 1: atmosphere than in pre industrial times. And so what became 96 00:06:03,960 --> 00:06:07,520 Speaker 1: very evident to us was that we can not only 97 00:06:08,600 --> 00:06:11,720 Speaker 1: generate net zero carbon oil with the use of CO two. 98 00:06:11,800 --> 00:06:14,440 Speaker 1: If we extract it from the air or take it 99 00:06:14,480 --> 00:06:19,040 Speaker 1: from point source industrial sites, we could do that and 100 00:06:19,240 --> 00:06:23,360 Speaker 1: help the world while we generate net zero carbon oil 101 00:06:23,480 --> 00:06:27,680 Speaker 1: for the hard to decarbonize industries and create value for 102 00:06:27,720 --> 00:06:32,320 Speaker 1: our shareholders. So we have a way to help facilitate 103 00:06:32,360 --> 00:06:35,760 Speaker 1: the climate transition because, as you know and many know, 104 00:06:35,880 --> 00:06:39,479 Speaker 1: the transition is going to be very costly, and if 105 00:06:39,520 --> 00:06:42,640 Speaker 1: you can do it in a way that still produces 106 00:06:42,800 --> 00:06:46,800 Speaker 1: lower cost fuel and energy for the world, that's the 107 00:06:46,839 --> 00:06:49,640 Speaker 1: best way to do the transition. So how exactly do 108 00:06:49,680 --> 00:06:53,120 Speaker 1: you think you will make net zero oil? We will 109 00:06:53,160 --> 00:06:57,360 Speaker 1: produce net zero oil by injecting CO two in our 110 00:06:57,560 --> 00:07:01,719 Speaker 1: oil reservoirs wherever they may be, starting first in the Permian, 111 00:07:02,000 --> 00:07:05,800 Speaker 1: then our other areas oil and gas areas around the world. 112 00:07:06,480 --> 00:07:09,200 Speaker 1: And the way it happens is it takes more CO 113 00:07:09,440 --> 00:07:13,600 Speaker 1: two injected into the reservoir to produce the oil than 114 00:07:13,760 --> 00:07:18,920 Speaker 1: what the oil generated will emit when used. That's fundamentally 115 00:07:19,200 --> 00:07:23,240 Speaker 1: what makes it in that zero carbon. And technically, the 116 00:07:23,280 --> 00:07:28,120 Speaker 1: way it works in the reservoir is that there's specific 117 00:07:28,680 --> 00:07:33,000 Speaker 1: parts of the reservoir that have such a small permeability 118 00:07:33,040 --> 00:07:37,480 Speaker 1: and porosity. They're like micropores where the oil is trapped. 119 00:07:38,360 --> 00:07:42,120 Speaker 1: Water is sometimes use water flooding to get more oil 120 00:07:42,160 --> 00:07:45,240 Speaker 1: out of the reservoir, but the residual oil cannot be 121 00:07:45,280 --> 00:07:48,240 Speaker 1: moved with the water because the water molecules are too 122 00:07:48,240 --> 00:07:53,320 Speaker 1: big to get into micropores. So CO two is a 123 00:07:53,520 --> 00:07:58,160 Speaker 1: smaller molecule, it can become miscible in the oil. And 124 00:07:58,200 --> 00:08:00,520 Speaker 1: when it becomes miscible in the oil, even in these 125 00:08:00,520 --> 00:08:05,200 Speaker 1: small micropores, it increases the oil molecule, makes it less fiscus, 126 00:08:05,240 --> 00:08:08,760 Speaker 1: and it pops out of the micropor. Well, there has 127 00:08:08,800 --> 00:08:11,400 Speaker 1: to be something that goes into that micropor. What goes 128 00:08:11,440 --> 00:08:14,400 Speaker 1: into that MicroPort is COO two. So that's how CO 129 00:08:14,640 --> 00:08:18,760 Speaker 1: two gets sequestered in oil reservoirs. Yeah, it was interesting 130 00:08:18,800 --> 00:08:21,320 Speaker 1: for me to think about how to explain this to people. 131 00:08:21,760 --> 00:08:24,480 Speaker 1: And when I was talking to editors, it's like, there 132 00:08:24,640 --> 00:08:29,080 Speaker 1: isn't a tank underground where you just haven't. If you 133 00:08:29,160 --> 00:08:31,440 Speaker 1: look at the rock where you have oil, it looks 134 00:08:31,440 --> 00:08:34,520 Speaker 1: like granite, like you will not be able to see 135 00:08:34,520 --> 00:08:36,600 Speaker 1: that there is oil in there with your naked eyes, 136 00:08:36,920 --> 00:08:39,640 Speaker 1: but there is all in those little pores. And I 137 00:08:39,679 --> 00:08:44,360 Speaker 1: think that picture helps a little maybe to understand what 138 00:08:44,480 --> 00:08:48,640 Speaker 1: exactly is happening down there. Because it's so deep. You 139 00:08:48,800 --> 00:08:52,320 Speaker 1: use one billion cubic feet of carbon dioxide a day 140 00:08:52,640 --> 00:08:56,000 Speaker 1: to be able to do enhance oil recovery. Now some 141 00:08:56,040 --> 00:08:58,760 Speaker 1: of the carbon dioxide that you inject comes back up 142 00:08:58,800 --> 00:09:02,560 Speaker 1: with the oil if it stays in the ground. Right. However, 143 00:09:04,000 --> 00:09:06,439 Speaker 1: almost all of the carbon dioxide that you use today 144 00:09:07,040 --> 00:09:10,959 Speaker 1: comes from actually being mined underground. You call it organic 145 00:09:11,000 --> 00:09:14,920 Speaker 1: COO two, and you want to transfer that to using 146 00:09:14,960 --> 00:09:20,000 Speaker 1: anthropogenic or human created carbon dioxide. That's correct. So if 147 00:09:20,000 --> 00:09:21,920 Speaker 1: we look at this decade by decade plan to become 148 00:09:21,960 --> 00:09:25,560 Speaker 1: a carbon management company, is the first decade essentially cleaning 149 00:09:25,679 --> 00:09:29,000 Speaker 1: up your own operation, going from using organic COO two 150 00:09:29,080 --> 00:09:32,520 Speaker 1: to using human created COO two. That's correct. We will 151 00:09:32,559 --> 00:09:36,800 Speaker 1: start to convert from organic to atmospheric and athropogenic in 152 00:09:36,840 --> 00:09:39,920 Speaker 1: the first phase of our operations, and then beyond that 153 00:09:40,160 --> 00:09:45,600 Speaker 1: we'll start developing the incremental resources. And combon capture as 154 00:09:45,640 --> 00:09:49,520 Speaker 1: a technology is not new. It's got a fifty year history. 155 00:09:50,400 --> 00:09:54,560 Speaker 1: You've been doing it for two decades, that's correct. Well, well, 156 00:09:54,800 --> 00:09:58,200 Speaker 1: actually longer than that when you consider the fact that 157 00:09:58,400 --> 00:10:03,240 Speaker 1: capturing carbon two can be the process of separating the 158 00:10:03,280 --> 00:10:06,080 Speaker 1: CO two from the methane when it comes out of 159 00:10:06,080 --> 00:10:09,800 Speaker 1: the reservoir. So the technology that can do that has 160 00:10:09,800 --> 00:10:12,400 Speaker 1: been used for fifty years. Yeah. So initially, when cambon 161 00:10:12,400 --> 00:10:16,280 Speaker 1: capture began as a technology. It wasn't really for climate purposes. 162 00:10:16,320 --> 00:10:19,120 Speaker 1: It was to make sure that when you were mining gas, 163 00:10:19,400 --> 00:10:22,560 Speaker 1: if there was any associated carbon dioxide, which typically there is, 164 00:10:22,880 --> 00:10:25,200 Speaker 1: you would separate it out so that when you supply 165 00:10:25,280 --> 00:10:27,800 Speaker 1: the fuel, people only get the fuel and don't get 166 00:10:27,800 --> 00:10:31,280 Speaker 1: carbon dioxide alongside it. That's correct. Yes, we started using 167 00:10:31,400 --> 00:10:35,199 Speaker 1: carbon capture technology for climate purposes in the nineties. Norway 168 00:10:35,360 --> 00:10:38,520 Speaker 1: was the first country to build a large facility that 169 00:10:38,600 --> 00:10:41,760 Speaker 1: just captured carbon dioxide from an oil and gas facility 170 00:10:41,760 --> 00:10:45,600 Speaker 1: and sunk it deep underground. But most of its use currently, 171 00:10:45,640 --> 00:10:49,080 Speaker 1: as you explained, is for enhanced rail recovery. But we 172 00:10:49,120 --> 00:10:52,800 Speaker 1: also have to look at recent examples of carbon capture 173 00:10:53,480 --> 00:10:56,880 Speaker 1: being used for climate purposes. The largest facility to do 174 00:10:56,880 --> 00:10:59,000 Speaker 1: it on a coal power plant was in the US 175 00:10:59,200 --> 00:11:03,240 Speaker 1: called Petronova, ran for a few years and it's now multipled. 176 00:11:04,000 --> 00:11:07,000 Speaker 1: Why do you think oxy will succeed are doing this 177 00:11:07,120 --> 00:11:12,960 Speaker 1: for climate purposes? The reality is that when you're developing 178 00:11:13,200 --> 00:11:16,000 Speaker 1: technologies that are used for a different purpose, even if 179 00:11:16,040 --> 00:11:20,840 Speaker 1: they may be used elsewhere the technology for different purposes, 180 00:11:21,240 --> 00:11:26,199 Speaker 1: there has to be a sufficient volume of development for 181 00:11:26,360 --> 00:11:29,760 Speaker 1: the technology to be improved. For example, you look at 182 00:11:29,800 --> 00:11:33,640 Speaker 1: wind and solar. How many wind and solar facilities had 183 00:11:33,679 --> 00:11:36,760 Speaker 1: to be built to reduce that cost by eighty percent. 184 00:11:37,120 --> 00:11:42,920 Speaker 1: For example, Petronova, it was the technology that was put 185 00:11:43,640 --> 00:11:49,160 Speaker 1: in place. I believe if you looked at how that 186 00:11:49,240 --> 00:11:52,440 Speaker 1: could be improved, I believe that if you built that again, 187 00:11:53,320 --> 00:11:56,600 Speaker 1: it would be successful and if you used it with 188 00:11:56,760 --> 00:12:00,840 Speaker 1: the right reservoir. They had difficulty with a reservoir they 189 00:12:00,880 --> 00:12:04,080 Speaker 1: were using it with, and so it didn't work for 190 00:12:04,679 --> 00:12:08,680 Speaker 1: as efficiently as most reservoirs that we are operating work 191 00:12:08,720 --> 00:12:12,439 Speaker 1: because it was a different You have to be careful 192 00:12:12,480 --> 00:12:16,400 Speaker 1: with the design and the processing for an hair sol recovery. 193 00:12:16,559 --> 00:12:20,959 Speaker 1: Now Natzier oil requires you too, as you explain, put 194 00:12:21,000 --> 00:12:24,840 Speaker 1: more carbon dioxide into the ground than the carbon dioxide 195 00:12:24,880 --> 00:12:28,120 Speaker 1: that would be generated if you burn the oil. When 196 00:12:28,160 --> 00:12:31,240 Speaker 1: will the first shipment of Nazier oil through carbon capture 197 00:12:31,320 --> 00:12:34,480 Speaker 1: come through? I can't tell you that right now because 198 00:12:36,080 --> 00:12:41,480 Speaker 1: what we're facing with our first director capture facility is 199 00:12:41,840 --> 00:12:46,319 Speaker 1: more interest in taking the CO two and sequestering that 200 00:12:46,600 --> 00:12:50,280 Speaker 1: in a saline reservoir and or a depleted oil reservoir, 201 00:12:50,880 --> 00:12:53,520 Speaker 1: not to do for an hair soil recovery. Right, so 202 00:12:53,559 --> 00:12:55,640 Speaker 1: this will be just for sinking it into the ground 203 00:12:55,640 --> 00:12:58,160 Speaker 1: for climate purpose so that it's not in the atmosphere 204 00:12:58,240 --> 00:13:04,080 Speaker 1: and nothing to do with extracting more not all the volume. So, 205 00:13:06,360 --> 00:13:08,719 Speaker 1: just to be honest with you, we are getting a 206 00:13:08,720 --> 00:13:13,479 Speaker 1: lot of request and a lot of interest in corporations 207 00:13:13,640 --> 00:13:18,240 Speaker 1: that need CO two offsets because they have net zero goals. 208 00:13:18,840 --> 00:13:24,520 Speaker 1: And so the companies that are calling us most frequently 209 00:13:24,559 --> 00:13:28,120 Speaker 1: are those that want the CO two not to be 210 00:13:28,240 --> 00:13:34,240 Speaker 1: used for incremental oil production. And so we're we're making 211 00:13:34,280 --> 00:13:38,280 Speaker 1: the best decisions that we can for the advancement of 212 00:13:38,400 --> 00:13:44,400 Speaker 1: further facilities. So, ultimately, I believe that putting CO two 213 00:13:44,559 --> 00:13:48,760 Speaker 1: in a saline reservoir is a waste of a valuable 214 00:13:48,880 --> 00:13:55,319 Speaker 1: product and it's something that we should not do on 215 00:13:55,400 --> 00:14:00,240 Speaker 1: a large scale basis. It's missing an opportunity. Is I 216 00:14:00,280 --> 00:14:04,360 Speaker 1: feel like using CO two and enhanced or recovery sequesters 217 00:14:04,400 --> 00:14:06,880 Speaker 1: the CO two. It accomplishes what we need to do. 218 00:14:07,120 --> 00:14:11,640 Speaker 1: It sequesters the CO two ultimately and it generates the 219 00:14:11,760 --> 00:14:14,720 Speaker 1: net zero carbon oil and that's what the world needs. 220 00:14:15,400 --> 00:14:18,439 Speaker 1: VICKI is clear that it makes better sense to use 221 00:14:18,520 --> 00:14:22,480 Speaker 1: CO two to get more oil than just sequester it. 222 00:14:23,280 --> 00:14:26,440 Speaker 1: But other companies want offsets and are willing to pay 223 00:14:26,440 --> 00:14:30,360 Speaker 1: her a premium to just put it underground. However, if 224 00:14:30,400 --> 00:14:32,480 Speaker 1: Oxy does that, it won't be able to use the 225 00:14:32,520 --> 00:14:35,480 Speaker 1: captured CO two to replace the CO two it has 226 00:14:35,520 --> 00:14:39,360 Speaker 1: been mining from underground, and that offset was needed by 227 00:14:39,400 --> 00:14:43,280 Speaker 1: Oxy itself to create net zero oil and meet its 228 00:14:43,280 --> 00:14:47,040 Speaker 1: climate goals. So I asked Wiki, if selling offsets will 229 00:14:47,080 --> 00:14:51,040 Speaker 1: derail Oxy's own climate plan, It doesn't derail up our plan. 230 00:14:51,160 --> 00:14:53,720 Speaker 1: It just makes makes it longer for us to get 231 00:14:53,720 --> 00:14:56,360 Speaker 1: to that plan. Okay, so we still have that commitment. 232 00:14:56,560 --> 00:14:59,720 Speaker 1: We want to make it happen, and we will. Okay. 233 00:15:00,120 --> 00:15:02,600 Speaker 1: You know, it would be remissd for me to not ask, 234 00:15:02,920 --> 00:15:05,680 Speaker 1: because you did have a carbon neutral oil shipment go 235 00:15:06,480 --> 00:15:11,200 Speaker 1: to India and that was not with offsets that are 236 00:15:11,280 --> 00:15:14,640 Speaker 1: considered credible by most experts. So why did that happen? 237 00:15:14,880 --> 00:15:17,360 Speaker 1: Why did you take that route given you know how 238 00:15:17,400 --> 00:15:20,160 Speaker 1: to do offsets right, Why would they say that that 239 00:15:20,240 --> 00:15:23,560 Speaker 1: was not from credible sources. Because most of the offsets 240 00:15:23,560 --> 00:15:27,520 Speaker 1: that exist in the market today are offsets that avoid 241 00:15:27,680 --> 00:15:32,080 Speaker 1: emissions carbon avoidance. They're not actually sequestering carbon dioxide from 242 00:15:32,080 --> 00:15:34,000 Speaker 1: the air. If you build a new forest, you may 243 00:15:34,040 --> 00:15:36,800 Speaker 1: be able to sequester carbon dioxide. Most of the offsets 244 00:15:36,800 --> 00:15:39,560 Speaker 1: that exist today are renewable energy power plants, which are 245 00:15:39,600 --> 00:15:43,600 Speaker 1: being built as a theoretical replacement to a coal power plant. 246 00:15:43,880 --> 00:15:45,920 Speaker 1: So they're saying, we build a solar plant or a 247 00:15:45,920 --> 00:15:48,920 Speaker 1: wind plant, and we avoid cut emissions because we built 248 00:15:48,960 --> 00:15:53,040 Speaker 1: a renewable energy plant. They're not actually capturing the carbon dioxide. Oh, 249 00:15:53,080 --> 00:15:55,360 Speaker 1: now that we used a third party's force to purchase 250 00:15:55,400 --> 00:16:00,320 Speaker 1: our credits, right and to forests, Yeah, they were valid, 251 00:16:01,240 --> 00:16:05,120 Speaker 1: they were. Yeah. Are you sure about that? I would 252 00:16:05,120 --> 00:16:10,000 Speaker 1: say that, I'm it was. We went through a reputable, 253 00:16:10,160 --> 00:16:12,920 Speaker 1: very reputable source to get them. Yeah. I don't know 254 00:16:12,960 --> 00:16:16,840 Speaker 1: if we revealed who we bought them through, yes, but 255 00:16:17,000 --> 00:16:20,920 Speaker 1: it was. It was a very reputable source. Because most 256 00:16:20,960 --> 00:16:22,800 Speaker 1: of the express we've talked about, and in the existing 257 00:16:22,800 --> 00:16:25,440 Speaker 1: offset market, because what you are building, where you're actually 258 00:16:25,520 --> 00:16:27,840 Speaker 1: capturing carbon at st and putting it into the ground, 259 00:16:28,040 --> 00:16:30,360 Speaker 1: that is a very small market. Right now, the largest 260 00:16:30,400 --> 00:16:33,000 Speaker 1: direct air capture plan that does it is four thousand tons. 261 00:16:33,920 --> 00:16:36,760 Speaker 1: You're going to build something that is one hundred and 262 00:16:36,760 --> 00:16:40,880 Speaker 1: twenty times larger in the next two years. But the 263 00:16:41,040 --> 00:16:45,840 Speaker 1: carbon removal offsets are, you know, essentially negligible. Part of 264 00:16:45,880 --> 00:16:49,320 Speaker 1: the carbon offset market. Most of them are avoidance emissions offset. 265 00:16:50,120 --> 00:16:53,760 Speaker 1: I would be interested to know. Yeah, who says what 266 00:16:53,800 --> 00:16:56,040 Speaker 1: we did was not credible, I'd be very keen if 267 00:16:56,040 --> 00:16:58,520 Speaker 1: you want to share with me who you bought those 268 00:16:58,560 --> 00:17:01,200 Speaker 1: offsets from, what project they were attached to. Yeah, I 269 00:17:01,200 --> 00:17:04,080 Speaker 1: would like to do that. That is. Yeah, we wouldn't 270 00:17:04,080 --> 00:17:07,240 Speaker 1: have bought credits that we didn't feel more valid. Yeah, 271 00:17:07,280 --> 00:17:10,160 Speaker 1: because we didn't need to do that. What we wanted 272 00:17:10,200 --> 00:17:12,800 Speaker 1: to do was help the world see that. What you 273 00:17:12,840 --> 00:17:17,840 Speaker 1: can do is there is a market for premium oil 274 00:17:18,040 --> 00:17:20,560 Speaker 1: and premium moil being that that's you know, either carbon 275 00:17:20,920 --> 00:17:24,880 Speaker 1: zero or net carbon zero. Yes. And I think the 276 00:17:24,920 --> 00:17:27,600 Speaker 1: most of the offsets projects, as they began thirty years ago, 277 00:17:28,119 --> 00:17:32,879 Speaker 1: started with the right heartened place to do good, to 278 00:17:32,880 --> 00:17:35,360 Speaker 1: try and help the world, to try and maybe transfer 279 00:17:35,359 --> 00:17:37,960 Speaker 1: some of the money from countries to developing countries. The 280 00:17:38,040 --> 00:17:40,360 Speaker 1: trouble has been over the last thirty years, every time 281 00:17:40,359 --> 00:17:43,440 Speaker 1: they've done it, accounting has been a problem. Because carbon 282 00:17:43,520 --> 00:17:46,439 Speaker 1: removal was so expensive, nobody went down that route. And 283 00:17:46,480 --> 00:17:48,320 Speaker 1: now finally we're getting to a point where we can 284 00:17:48,359 --> 00:17:51,480 Speaker 1: actually do carbon removal. Yeah, I agree with you that 285 00:17:51,560 --> 00:17:56,199 Speaker 1: to build a solar facility or win facility and to 286 00:17:56,320 --> 00:18:01,280 Speaker 1: expect to claim the credits are the two that wasn't emitted. 287 00:18:01,480 --> 00:18:04,199 Speaker 1: That's not the way it should be done. Yeah. What 288 00:18:04,280 --> 00:18:06,480 Speaker 1: do you say to someone who has heard our conversation 289 00:18:06,520 --> 00:18:09,840 Speaker 1: today and has hood an oil company CEO saying we 290 00:18:09,840 --> 00:18:13,040 Speaker 1: are going to make net zero oil and then they 291 00:18:13,080 --> 00:18:16,040 Speaker 1: think this is greenwashing and it's a way to extend 292 00:18:16,320 --> 00:18:20,760 Speaker 1: the social license and extend the life of oil, which is, 293 00:18:21,119 --> 00:18:24,160 Speaker 1: without controlling for emissions, is the cause for climate change. 294 00:18:24,359 --> 00:18:26,760 Speaker 1: How do you respond to that. I would say that's true. 295 00:18:27,640 --> 00:18:30,520 Speaker 1: It's true because what we need to do is we 296 00:18:30,560 --> 00:18:34,800 Speaker 1: do need to extend the life of oil production because 297 00:18:34,880 --> 00:18:40,120 Speaker 1: it's the most intensive energy source, and so we need 298 00:18:40,160 --> 00:18:42,480 Speaker 1: to do it for the world. It makes the world 299 00:18:42,480 --> 00:18:46,800 Speaker 1: a better place. What is different and what's most important 300 00:18:46,800 --> 00:18:49,880 Speaker 1: for people to get is the net zero carbon part 301 00:18:49,920 --> 00:18:54,280 Speaker 1: of it, because too many people are focusing on killing 302 00:18:54,560 --> 00:18:59,639 Speaker 1: energy sources rather than killing emissions. The common enemy that 303 00:18:59,680 --> 00:19:02,879 Speaker 1: we all have are the emissions, and that's what we 304 00:19:02,920 --> 00:19:07,920 Speaker 1: need to control. What our strategy does is it ultimately 305 00:19:08,000 --> 00:19:14,080 Speaker 1: will produce a better oil, and net zero oil is 306 00:19:14,119 --> 00:19:17,600 Speaker 1: the best oil you can produce, and it's the lowest 307 00:19:17,640 --> 00:19:20,760 Speaker 1: cost that you can produce for the energy that it 308 00:19:20,840 --> 00:19:25,480 Speaker 1: will provide. But burning fossil fuels also causes air pollution, 309 00:19:25,720 --> 00:19:30,919 Speaker 1: and that kills more people every year than many of 310 00:19:30,960 --> 00:19:34,720 Speaker 1: the diseases that we know. So nine million people a 311 00:19:34,800 --> 00:19:37,320 Speaker 1: year are killed by air pollution. Half of it is 312 00:19:37,320 --> 00:19:41,440 Speaker 1: through indoor air pollution when they're burning wood, but half 313 00:19:41,440 --> 00:19:46,160 Speaker 1: of it is because of oil, mostly or coal power plants. 314 00:19:46,280 --> 00:19:48,560 Speaker 1: How would you account for that externality? If you do 315 00:19:48,680 --> 00:19:51,199 Speaker 1: continue to produce net zero oil, you've taken care of 316 00:19:51,200 --> 00:19:55,360 Speaker 1: the climate problem. But then there's the pollution problem, right, Well, 317 00:19:55,400 --> 00:20:00,119 Speaker 1: the pollution. We're addressing the pollution by extracting the CO 318 00:20:00,320 --> 00:20:02,239 Speaker 1: two out of the atmosphere. That's a part of it. 319 00:20:02,320 --> 00:20:07,720 Speaker 1: The volatile organic emissions, Yeah, particulate matter, Yeah, that certainly 320 00:20:07,800 --> 00:20:10,920 Speaker 1: needs to be addressed, but that I think is a 321 00:20:10,920 --> 00:20:14,479 Speaker 1: lower source in my view of what could be causing 322 00:20:14,520 --> 00:20:18,080 Speaker 1: health issues overall climate. If we don't address it will 323 00:20:18,119 --> 00:20:21,960 Speaker 1: be higher eventually. But air pollution currently is four and 324 00:20:21,960 --> 00:20:24,880 Speaker 1: a half million deaths a year. Most of it happens 325 00:20:24,920 --> 00:20:28,840 Speaker 1: in developing countries, most of it happens in poor regions. 326 00:20:28,840 --> 00:20:32,600 Speaker 1: Most of it from coal though, yeah, but also oil, 327 00:20:32,680 --> 00:20:36,399 Speaker 1: I mean the air pollution death that has sort of 328 00:20:36,480 --> 00:20:40,280 Speaker 1: shaken the legal world happened here in the UK where 329 00:20:40,320 --> 00:20:45,640 Speaker 1: a young child was killed and the cause was air pollution. 330 00:20:45,760 --> 00:20:47,400 Speaker 1: That this was the first time that it was put 331 00:20:47,440 --> 00:20:50,000 Speaker 1: on the death certificate that air pollution was the cause 332 00:20:50,040 --> 00:20:52,040 Speaker 1: of that death. They had to go to court to 333 00:20:52,160 --> 00:20:56,640 Speaker 1: be able to make that case. But because the family 334 00:20:56,720 --> 00:21:00,480 Speaker 1: lived at a junction where air pollution levels of vary high. 335 00:21:01,440 --> 00:21:04,000 Speaker 1: But yeah, I mean it's currently it is a bigger 336 00:21:04,040 --> 00:21:08,359 Speaker 1: health problem globally if you just take the average number 337 00:21:08,359 --> 00:21:18,080 Speaker 1: and then acute problem in some areas. After the break, 338 00:21:18,160 --> 00:21:21,520 Speaker 1: I ask Wicki about the US Climate Bill, how exactly 339 00:21:21,520 --> 00:21:25,520 Speaker 1: Oxy will scale carbon capture, and her relationship with one 340 00:21:25,560 --> 00:21:39,920 Speaker 1: of the richest men on earth, Warren Buffett. So far, 341 00:21:40,040 --> 00:21:43,040 Speaker 1: we've heard a lot from Wicky about why Oxy plants 342 00:21:43,040 --> 00:21:47,280 Speaker 1: to produce nazio oil, but not how exactly it will 343 00:21:47,359 --> 00:21:50,240 Speaker 1: do it. Oxy will need to find a lot of 344 00:21:50,280 --> 00:21:53,639 Speaker 1: C two and Oxy has plans to capture it from ethan, 345 00:21:53,680 --> 00:21:57,560 Speaker 1: all fermentation, from cement plants and even natural gas power plants. 346 00:21:58,320 --> 00:22:00,879 Speaker 1: But the one it's betting on first is a technology 347 00:22:00,920 --> 00:22:04,760 Speaker 1: called direct air capture, and a quicker reminder, direct air 348 00:22:04,840 --> 00:22:07,760 Speaker 1: capture is a technology that removes carbon dioxide from the 349 00:22:07,840 --> 00:22:11,680 Speaker 1: air so that it can be stored somewhere else, kind 350 00:22:11,680 --> 00:22:14,159 Speaker 1: of similar to how you would grab only the chocolate 351 00:22:14,240 --> 00:22:17,760 Speaker 1: chips from a bag of trail mix. But it is 352 00:22:17,840 --> 00:22:23,040 Speaker 1: phenomenally energy intensive and expensive to do so, and that's 353 00:22:23,080 --> 00:22:25,679 Speaker 1: why the economics haven't really lined up to do it 354 00:22:25,720 --> 00:22:28,879 Speaker 1: at scale. Needed to remove significant amounts of C or 355 00:22:28,920 --> 00:22:32,720 Speaker 1: two from the atmosphere. In twenty nineteen, when oxy first 356 00:22:32,720 --> 00:22:35,680 Speaker 1: announced that it will use direct air capture for extracting 357 00:22:35,800 --> 00:22:39,320 Speaker 1: more oil, the only way the economics could work was 358 00:22:39,359 --> 00:22:43,439 Speaker 1: to use some very specific subsidies available back then. But 359 00:22:43,640 --> 00:22:47,520 Speaker 1: now new incentives in legislations like the Inflation Reduction Act 360 00:22:47,920 --> 00:22:52,199 Speaker 1: or premium payments from carbon removal offsets may provide a 361 00:22:52,280 --> 00:22:55,280 Speaker 1: path to make the technology operate at scale. So I 362 00:22:55,359 --> 00:22:58,840 Speaker 1: asked Wiki, is she surprised to have so many options 363 00:22:58,840 --> 00:23:02,520 Speaker 1: to pay for direct air after I can't say that 364 00:23:02,560 --> 00:23:06,560 Speaker 1: I'm surprised. I will say that I appreciate the efforts 365 00:23:06,560 --> 00:23:10,080 Speaker 1: of Senator Mansion and Bill Gates, who was on your 366 00:23:10,080 --> 00:23:15,240 Speaker 1: show not too long ago, to get the Inflation Reduction 367 00:23:15,240 --> 00:23:18,879 Speaker 1: Act passed. Was a huge help for us to be 368 00:23:18,960 --> 00:23:22,560 Speaker 1: able to accelerate what we're doing, and it certainly is 369 00:23:22,560 --> 00:23:27,119 Speaker 1: beneficial to us, but as you know CO two credits 370 00:23:27,280 --> 00:23:33,720 Speaker 1: are likely to be at a level where we certainly 371 00:23:33,720 --> 00:23:38,320 Speaker 1: without ultimately without those credits from IRA, we will be 372 00:23:38,400 --> 00:23:43,520 Speaker 1: able to make these plants commercial. I just don't believe. 373 00:23:43,560 --> 00:23:46,919 Speaker 1: And as you were saying earlier in the program, there's 374 00:23:47,560 --> 00:23:51,919 Speaker 1: there's not enough natural sources that can that can be 375 00:23:52,000 --> 00:23:55,800 Speaker 1: used for offsets, and so I think CO two credits 376 00:23:55,840 --> 00:23:58,000 Speaker 1: are going to be are going to sell at a 377 00:23:58,040 --> 00:24:02,280 Speaker 1: premium because there's just not enough available. Right. And so 378 00:24:02,440 --> 00:24:06,120 Speaker 1: let's talk about the Inflation Reduction Act, because Oxy has 379 00:24:06,119 --> 00:24:09,240 Speaker 1: been involved not in all of the Act, but very 380 00:24:09,240 --> 00:24:12,200 Speaker 1: specifically on the carbon capture side for quite some time. 381 00:24:12,640 --> 00:24:16,920 Speaker 1: Three years ago, you had, under President Trump, received an 382 00:24:17,400 --> 00:24:20,520 Speaker 1: increase in the amount of tax credits provided to carbon capture. 383 00:24:20,880 --> 00:24:24,240 Speaker 1: You got an extension on when those projects could be built. 384 00:24:24,480 --> 00:24:27,760 Speaker 1: That's now gone a step further with the Inflation Reduction Act. 385 00:24:28,160 --> 00:24:30,480 Speaker 1: You're getting even more money to be able to capture 386 00:24:30,480 --> 00:24:33,480 Speaker 1: each ton of CO two and you're getting a much 387 00:24:33,520 --> 00:24:36,119 Speaker 1: longer lead time you can build plants well into the 388 00:24:36,160 --> 00:24:40,480 Speaker 1: twenty thirties. How much work did you have to do 389 00:24:40,640 --> 00:24:42,760 Speaker 1: to make sure that that came through in the Inflation 390 00:24:42,800 --> 00:24:48,600 Speaker 1: Reduction Act. I think what was helpful to Senator Manton 391 00:24:48,640 --> 00:24:53,480 Speaker 1: and others to design the build the way they did 392 00:24:54,160 --> 00:24:57,600 Speaker 1: is to know that there were companies that would commit 393 00:24:58,119 --> 00:25:03,320 Speaker 1: to build the facilities. You never want to work really 394 00:25:03,320 --> 00:25:05,679 Speaker 1: hard to pass a bill and then find that it 395 00:25:05,720 --> 00:25:09,879 Speaker 1: doesn't benefit anybody in any way because nothing happens. And 396 00:25:09,920 --> 00:25:13,200 Speaker 1: so I think the fact that that we were out 397 00:25:13,240 --> 00:25:17,359 Speaker 1: there and saying, whether the bill passes or not, whether 398 00:25:17,400 --> 00:25:19,760 Speaker 1: we get incremental credits or not, we're going to build 399 00:25:19,760 --> 00:25:23,360 Speaker 1: this first facility and we're going to beyond that continue 400 00:25:23,440 --> 00:25:26,399 Speaker 1: to develop the technology. I think that was helpful to 401 00:25:26,560 --> 00:25:30,000 Speaker 1: Senator Mansion to know that from the Director of Capture standpoint, 402 00:25:30,280 --> 00:25:32,880 Speaker 1: it was going to happen. Oh that's interesting. I would 403 00:25:32,920 --> 00:25:35,520 Speaker 1: think you would want it as a bargaining chip where 404 00:25:35,560 --> 00:25:38,280 Speaker 1: you would say, look, if you don't get this bill passed, 405 00:25:38,280 --> 00:25:39,840 Speaker 1: I don't know if you'll build it. You know you 406 00:25:39,960 --> 00:25:43,680 Speaker 1: want America to be able to build these technologies, don't you. 407 00:25:43,680 --> 00:25:46,280 Speaker 1: You're saying the opposite. You're saying no, no no, no, even 408 00:25:46,320 --> 00:25:48,520 Speaker 1: if you don't pass a bill, we're going to do it. No, 409 00:25:48,640 --> 00:25:50,239 Speaker 1: but you have to listen to the rest of it. 410 00:25:50,440 --> 00:25:53,359 Speaker 1: How do you accelerate it? You can only accelerate it 411 00:25:53,359 --> 00:25:57,480 Speaker 1: if you have that certainty revenue or at least some 412 00:25:57,640 --> 00:26:01,439 Speaker 1: base revenue coming in. And that's what enables us to 413 00:26:01,600 --> 00:26:04,439 Speaker 1: now feel very comfortable that will achieve the seventy and 414 00:26:04,480 --> 00:26:07,400 Speaker 1: maybe even more because we'll be able to accelerate. Now, 415 00:26:07,680 --> 00:26:11,560 Speaker 1: that was the chip that the United States has no 416 00:26:11,640 --> 00:26:18,400 Speaker 1: way to significantly impact CEO two reduction without this happening, 417 00:26:18,760 --> 00:26:22,159 Speaker 1: because look a look at the discussion about carbon capture 418 00:26:22,160 --> 00:26:24,200 Speaker 1: in the United States. There's a lot of people talking 419 00:26:24,200 --> 00:26:26,439 Speaker 1: about it, but there's not a lot of people that 420 00:26:26,480 --> 00:26:30,440 Speaker 1: are doing the site prep and getting ready to start 421 00:26:30,520 --> 00:26:33,920 Speaker 1: building one and building a large one. Yeah, it's surprising 422 00:26:33,920 --> 00:26:36,320 Speaker 1: to me. I mean twenty nineteen, there was this exuberance 423 00:26:36,359 --> 00:26:39,480 Speaker 1: in the corbon capture community. You know, we were at 424 00:26:39,600 --> 00:26:42,400 Speaker 1: Jackson Hall at the Wyoming conference, and there was all 425 00:26:42,440 --> 00:26:47,280 Speaker 1: this enthusiasm that we'll be building all these facilities within months. 426 00:26:47,320 --> 00:26:51,680 Speaker 1: There'll be announcements, very little as being built. But this time, 427 00:26:51,720 --> 00:26:53,760 Speaker 1: you think, this time is real, it'll be different. Well 428 00:26:53,800 --> 00:26:56,760 Speaker 1: for us, it's real. I don't know how real it's 429 00:26:56,760 --> 00:26:59,000 Speaker 1: going to be for anybody else, but we want to 430 00:26:59,000 --> 00:27:02,720 Speaker 1: do it. To get serious about this, OXY has invested 431 00:27:02,800 --> 00:27:06,399 Speaker 1: in a Canadian direct air capture startup called Carbon Engineering. 432 00:27:06,760 --> 00:27:09,040 Speaker 1: It's one of a growing number of companies that take 433 00:27:09,119 --> 00:27:11,720 Speaker 1: CO two out of the air. The amount of energy 434 00:27:11,760 --> 00:27:14,600 Speaker 1: it takes to remove one ton of CO two is 435 00:27:14,640 --> 00:27:17,280 Speaker 1: comparable to the amount of electricity my wife and I 436 00:27:17,359 --> 00:27:21,600 Speaker 1: consume in an energy efficient London apartment in four months. 437 00:27:22,160 --> 00:27:24,920 Speaker 1: I wanted to know if Oxy and Carbon Engineering would 438 00:27:24,960 --> 00:27:29,240 Speaker 1: be using renewable electricity, or burning natural gas, or keeping 439 00:27:29,240 --> 00:27:35,040 Speaker 1: the amount of energy they need using botes. We will initially, yeah, 440 00:27:35,080 --> 00:27:38,600 Speaker 1: because because we'll be on the first one. First probably 441 00:27:38,680 --> 00:27:43,000 Speaker 1: couple will be on the grid which has both renewables 442 00:27:43,040 --> 00:27:45,720 Speaker 1: and it has gas. Okay, so not being our own 443 00:27:45,840 --> 00:27:47,879 Speaker 1: gas power plant, you're just going to take it from 444 00:27:47,920 --> 00:27:51,280 Speaker 1: the grid. That's right, account for it and in addition 445 00:27:51,320 --> 00:27:53,920 Speaker 1: to our solar plant. But you'll account for it because 446 00:27:53,960 --> 00:27:56,040 Speaker 1: they will have some U two emissions attached to it, 447 00:27:56,080 --> 00:27:58,080 Speaker 1: so you'll make sure that when you do the math 448 00:27:58,160 --> 00:28:01,480 Speaker 1: of how much is captured. That's right. Oxy announced in 449 00:28:01,520 --> 00:28:04,399 Speaker 1: twenty nineteen it planned to build its first diet air 450 00:28:04,480 --> 00:28:07,960 Speaker 1: capture facility, but the plan only becomes real when the 451 00:28:08,000 --> 00:28:12,440 Speaker 1: company makes the final investment decision, costing hundreds of millions 452 00:28:12,440 --> 00:28:15,560 Speaker 1: of dollars. I was told in me that the decision 453 00:28:15,560 --> 00:28:18,680 Speaker 1: will be made soon, so I asked, wiki has it 454 00:28:18,800 --> 00:28:22,119 Speaker 1: been made. It has been made. So we've actually started 455 00:28:22,160 --> 00:28:27,600 Speaker 1: side construction and we're having the I guess the groundbreaking 456 00:28:27,680 --> 00:28:31,879 Speaker 1: on November twenty ninth, but we're working already to prepare 457 00:28:31,920 --> 00:28:35,480 Speaker 1: the side. So construction begins November twenty ninth. You will 458 00:28:35,680 --> 00:28:37,720 Speaker 1: that's the ground breaking, yep, and then two years later 459 00:28:37,720 --> 00:28:40,200 Speaker 1: it'll be fully functioning. What happens in the middle, you're 460 00:28:40,240 --> 00:28:41,800 Speaker 1: going to have to do some testing. When do you 461 00:28:41,840 --> 00:28:44,000 Speaker 1: think you'll do the first capture so to speak, even 462 00:28:44,040 --> 00:28:46,960 Speaker 1: if it's released to that facility. Yeah, I haven't looked 463 00:28:46,960 --> 00:28:50,840 Speaker 1: at the chart yet, but I would imagine that'll be 464 00:28:51,040 --> 00:28:53,520 Speaker 1: in early twenty twenty four, because it could be mid 465 00:28:53,560 --> 00:28:56,480 Speaker 1: twenty twenty four or late twenty twenty four to get 466 00:28:56,480 --> 00:28:58,680 Speaker 1: the facility up and running right, and then you have 467 00:28:58,720 --> 00:29:04,480 Speaker 1: a plan to not just build this one, but seventy 468 00:29:04,520 --> 00:29:08,360 Speaker 1: seventy five, okay, and that'll be a million tons each. Yes, 469 00:29:08,720 --> 00:29:10,720 Speaker 1: so this one is half in a way, because you're 470 00:29:10,760 --> 00:29:12,840 Speaker 1: going to then scale that up to a million tons. Yes, 471 00:29:13,560 --> 00:29:17,560 Speaker 1: all of this is going to be expensive because the 472 00:29:17,600 --> 00:29:22,400 Speaker 1: technology is new and be the energy requirements are quite high. 473 00:29:22,440 --> 00:29:26,160 Speaker 1: So what funds the first facility? Then where is the 474 00:29:26,160 --> 00:29:29,000 Speaker 1: money coming from. What we'll likely do is it'll be 475 00:29:29,040 --> 00:29:31,960 Speaker 1: a combination of the cell of the CO two credits 476 00:29:32,080 --> 00:29:35,520 Speaker 1: and our own cash. Right, we have options, and what 477 00:29:35,680 --> 00:29:38,959 Speaker 1: we're ensuring that we do right now is keep our 478 00:29:39,000 --> 00:29:41,880 Speaker 1: options open because we have a lot of interest in 479 00:29:41,920 --> 00:29:46,240 Speaker 1: the CO two as credits for other corporations. Once you 480 00:29:46,320 --> 00:29:49,440 Speaker 1: prove the technology, once you at least how it works together. 481 00:29:50,160 --> 00:29:52,000 Speaker 1: Once you prove that, then you have the option of 482 00:29:52,040 --> 00:29:55,880 Speaker 1: project financing. We also have the option of bringing in 483 00:29:56,040 --> 00:30:00,160 Speaker 1: equity partners who might want to help develop this as 484 00:30:00,200 --> 00:30:03,680 Speaker 1: we go along. So we have lots of options on 485 00:30:03,720 --> 00:30:06,000 Speaker 1: how to fund it. And what we don't want to 486 00:30:06,000 --> 00:30:10,000 Speaker 1: do though, is we don't want to give up too 487 00:30:10,120 --> 00:30:12,440 Speaker 1: much of our upside on what we believe will be 488 00:30:12,480 --> 00:30:18,080 Speaker 1: a profitable business pretty quickly, and so we're we're trying 489 00:30:18,120 --> 00:30:21,040 Speaker 1: to keep our options open for now. I cannot not 490 00:30:21,160 --> 00:30:25,880 Speaker 1: ask you about your larger shareholder, Warren Buffett, who now 491 00:30:25,960 --> 00:30:29,440 Speaker 1: owns more than twenty percent of the company, and he 492 00:30:30,000 --> 00:30:32,040 Speaker 1: is buying every share he can as soon as it 493 00:30:32,120 --> 00:30:36,080 Speaker 1: drops billow sixty dollars a share for for oxy. What's 494 00:30:36,080 --> 00:30:39,760 Speaker 1: your relationship with him? Like, I have a great relationship 495 00:30:39,800 --> 00:30:44,200 Speaker 1: with him. I go visit him regularly and and we 496 00:30:44,560 --> 00:30:49,120 Speaker 1: have conversations a lot of times. When I go, we 497 00:30:49,240 --> 00:30:53,920 Speaker 1: might spend only you have twenty thirty percent of the 498 00:30:53,920 --> 00:30:55,720 Speaker 1: time on oxy, and then we talk about other things. 499 00:30:55,760 --> 00:30:58,880 Speaker 1: So I'm having the opportunity to learn from him too, 500 00:30:58,920 --> 00:31:02,120 Speaker 1: which has been really really good for me personally. And 501 00:31:02,280 --> 00:31:05,240 Speaker 1: is he supportive of this carbon management strategy because one 502 00:31:05,240 --> 00:31:07,440 Speaker 1: of the things he is very good at is investing 503 00:31:07,440 --> 00:31:11,920 Speaker 1: in companies that will provide return. Is he convinced that 504 00:31:11,960 --> 00:31:14,600 Speaker 1: what you're doing with carbon management will be the kind 505 00:31:14,600 --> 00:31:16,640 Speaker 1: of return that he will get from a company he 506 00:31:16,720 --> 00:31:19,240 Speaker 1: is so heavily invested in. I can tell you that. 507 00:31:20,280 --> 00:31:23,520 Speaker 1: First of all, let me clarify that what I'm about 508 00:31:23,560 --> 00:31:25,920 Speaker 1: to say does not come from what he has said, 509 00:31:27,240 --> 00:31:30,720 Speaker 1: because with our shareholders, I try to be really careful 510 00:31:30,720 --> 00:31:36,160 Speaker 1: about not disclosing individual conversations. But I will say that 511 00:31:37,360 --> 00:31:41,920 Speaker 1: generally speaking, you could deduce from everything he said in 512 00:31:41,960 --> 00:31:45,320 Speaker 1: the past that he doesn't want to invest in companies 513 00:31:45,320 --> 00:31:50,000 Speaker 1: that can't deliver returns and a company that has the 514 00:31:50,040 --> 00:31:55,120 Speaker 1: ability to deliver significant cash is important, and so how 515 00:31:55,200 --> 00:31:59,680 Speaker 1: we allocate our capital is important, and so we need 516 00:31:59,720 --> 00:32:02,320 Speaker 1: to always be a company not just for Berkshire, but 517 00:32:02,440 --> 00:32:05,960 Speaker 1: for all of our shareholders. We need to generate returns. 518 00:32:06,160 --> 00:32:08,680 Speaker 1: How do you see the next few years playing out 519 00:32:08,720 --> 00:32:14,640 Speaker 1: with having to deal with energy needs while meeting climate golds. 520 00:32:15,040 --> 00:32:17,840 Speaker 1: I really think that we have to build a plan 521 00:32:18,400 --> 00:32:21,760 Speaker 1: and have to somehow get it accepted by the world. 522 00:32:22,560 --> 00:32:29,760 Speaker 1: Where we're doing all we're building lots of solar, lots 523 00:32:29,760 --> 00:32:33,959 Speaker 1: of wind, We're building electric vehicles at a faster pace. 524 00:32:34,760 --> 00:32:39,760 Speaker 1: We're developing as quickly as we can industrial size battery storage, 525 00:32:40,720 --> 00:32:46,440 Speaker 1: energy storage. But where we're also continuing the development of 526 00:32:46,520 --> 00:32:49,440 Speaker 1: oil and gas, but in a much more responsible way 527 00:32:49,440 --> 00:32:52,160 Speaker 1: than we've ever done before as an industry, and that 528 00:32:52,240 --> 00:32:57,520 Speaker 1: means addressing methane emissions aggressively. And other companies are committing 529 00:32:57,520 --> 00:33:00,640 Speaker 1: to do the same, and that's to have a target 530 00:33:00,680 --> 00:33:04,560 Speaker 1: to get to zero methane by twenty thirty. We're trying 531 00:33:04,560 --> 00:33:09,560 Speaker 1: to think about how do we capture from our larger 532 00:33:09,640 --> 00:33:15,680 Speaker 1: facilities the emissions that may be happening and reinject underground 533 00:33:15,720 --> 00:33:21,680 Speaker 1: into our reservoir so that we're reducing those emissions. Ultimately, though, 534 00:33:22,400 --> 00:33:24,920 Speaker 1: we're going to have to go to the use of 535 00:33:25,400 --> 00:33:30,160 Speaker 1: valves and planges that don't have fugitive emissions. As a side, 536 00:33:30,280 --> 00:33:34,920 Speaker 1: I just love the term fugitive emissions because it's like 537 00:33:35,920 --> 00:33:42,080 Speaker 1: that is a crime. Methane leaking the fugitives is the right, right. 538 00:33:42,920 --> 00:33:46,360 Speaker 1: I don't know who coined it, but it is right. Now, 539 00:33:46,520 --> 00:33:49,800 Speaker 1: you've made a case for common capture as a necessary 540 00:33:49,840 --> 00:33:53,360 Speaker 1: option for the transition. Maybe that is the majority of you, 541 00:33:53,720 --> 00:33:56,760 Speaker 1: but there are voices that say, you know, we can 542 00:33:56,840 --> 00:34:02,120 Speaker 1: do this with all renewables, add batteries, we'll add maybe nuclear. 543 00:34:03,000 --> 00:34:05,880 Speaker 1: We don't need to have fossil fuels in the mix. 544 00:34:06,480 --> 00:34:11,920 Speaker 1: And this is kind of a philosophical debate. After a point, 545 00:34:12,200 --> 00:34:13,879 Speaker 1: you can look at numbers, you can look at data, 546 00:34:13,960 --> 00:34:17,640 Speaker 1: you can look at scenarios, but after a point, it's 547 00:34:17,640 --> 00:34:21,560 Speaker 1: a judgment call. Why do you think your judgment call 548 00:34:21,840 --> 00:34:26,439 Speaker 1: is the right one rather than one hundred percent renewables people. 549 00:34:27,239 --> 00:34:30,920 Speaker 1: I don't mean to be offensive here, but Europe is 550 00:34:30,960 --> 00:34:35,040 Speaker 1: a live case study. People really need to give that 551 00:34:35,160 --> 00:34:38,360 Speaker 1: some thought. And anybody that says that we can go 552 00:34:38,480 --> 00:34:42,680 Speaker 1: one hundred percent renewable today without significant advancement in the 553 00:34:42,719 --> 00:34:45,480 Speaker 1: technology of battery storage, which I think ultimately will come. 554 00:34:46,280 --> 00:34:49,880 Speaker 1: But it's not here today, and you cannot hope that 555 00:34:49,920 --> 00:34:51,600 Speaker 1: it will be here in five years. You can't hope 556 00:34:51,640 --> 00:34:53,839 Speaker 1: that it will be here in ten years, because if 557 00:34:53,840 --> 00:34:57,080 Speaker 1: you do, you put yourself at risk. So I think 558 00:34:57,080 --> 00:34:59,800 Speaker 1: that anybody who says that we can go one hundred 559 00:34:59,760 --> 00:35:03,640 Speaker 1: percent renewable today is speaking from emotion and passion and 560 00:35:03,760 --> 00:35:09,000 Speaker 1: not logic, and it's definitely not scientifically based. And I 561 00:35:09,080 --> 00:35:12,680 Speaker 1: worry about the United States and some of the pressure 562 00:35:12,719 --> 00:35:15,120 Speaker 1: in the United States to move away from fossil fuels. 563 00:35:15,200 --> 00:35:18,800 Speaker 1: Right now, we're the largest producer of oil in the world, 564 00:35:18,880 --> 00:35:22,480 Speaker 1: where the largest exporter of ellen G in the world 565 00:35:22,600 --> 00:35:27,880 Speaker 1: right now, so we are essentially energy independent. That doesn't 566 00:35:27,920 --> 00:35:30,680 Speaker 1: mean that today we're producing all the oil that we 567 00:35:30,880 --> 00:35:34,880 Speaker 1: need all to meet the demanding United States, but it 568 00:35:34,960 --> 00:35:37,080 Speaker 1: means we do have the resource to do that if 569 00:35:37,160 --> 00:35:40,080 Speaker 1: we needed to do that. That puts the United States 570 00:35:40,120 --> 00:35:43,680 Speaker 1: in a position of significant strength if we need allies 571 00:35:43,719 --> 00:35:47,399 Speaker 1: that are that have strength too. And where the world 572 00:35:47,520 --> 00:35:53,280 Speaker 1: is headed, it's becoming a more volatile place, and without 573 00:35:53,520 --> 00:36:00,399 Speaker 1: energy independence, I think that some countries will experience not 574 00:36:00,520 --> 00:36:04,960 Speaker 1: only difficulties within their own country to provide energy for 575 00:36:05,040 --> 00:36:10,720 Speaker 1: their people, but a weaker position in the United States. 576 00:36:10,760 --> 00:36:14,400 Speaker 1: Should the politics and should the geopolitical tensions continue to 577 00:36:14,440 --> 00:36:17,160 Speaker 1: grow as they have recently. I think you make an 578 00:36:17,160 --> 00:36:20,680 Speaker 1: interesting point about national security and energy independence. But also 579 00:36:21,040 --> 00:36:23,440 Speaker 1: it's easy to make that while you are in the 580 00:36:23,520 --> 00:36:27,040 Speaker 1: United States, because you are endowed with fossil fuels and 581 00:36:27,160 --> 00:36:30,719 Speaker 1: you are endowed with an economy that is capable of 582 00:36:30,840 --> 00:36:33,759 Speaker 1: extracting those fossil fuels. Most of the world is not 583 00:36:33,880 --> 00:36:36,880 Speaker 1: in that place. India does not have fossil fuels. It 584 00:36:36,920 --> 00:36:38,920 Speaker 1: has coal, but it doesn't have enough oil, doesn't have 585 00:36:39,000 --> 00:36:42,399 Speaker 1: enough gas. It is endowed with renewables, and so you're 586 00:36:42,400 --> 00:36:44,640 Speaker 1: going to have to take different paths in different places. 587 00:36:44,640 --> 00:36:47,040 Speaker 1: So some countries will have to double down on renewables 588 00:36:47,080 --> 00:36:50,279 Speaker 1: because that's their path to energy independence, right, that's right. 589 00:36:51,000 --> 00:36:55,680 Speaker 1: But the countries that don't have the natural resources to 590 00:36:55,800 --> 00:36:58,880 Speaker 1: be able to be energy independently to ally with those 591 00:36:59,000 --> 00:37:02,400 Speaker 1: that do. There's still a lot of oil to be 592 00:37:02,600 --> 00:37:06,840 Speaker 1: produced in Africa, but the investment in Africa is declining, 593 00:37:07,719 --> 00:37:12,759 Speaker 1: and there's there's a lot of oil and gas in 594 00:37:12,800 --> 00:37:16,759 Speaker 1: South America. But the countries now in South America are 595 00:37:16,800 --> 00:37:19,520 Speaker 1: going away from oil and gas, and so where are 596 00:37:19,520 --> 00:37:21,880 Speaker 1: they going to be in five years or ten years 597 00:37:22,280 --> 00:37:24,200 Speaker 1: South America. Many of the countries, they are going to 598 00:37:24,239 --> 00:37:27,920 Speaker 1: be in a much weaker position. And the problem is 599 00:37:27,960 --> 00:37:30,920 Speaker 1: that the stronger countries in the world can't defend everybody 600 00:37:31,080 --> 00:37:35,680 Speaker 1: and can't provide energy to everybody, and so the world 601 00:37:36,080 --> 00:37:40,440 Speaker 1: becomes a more difficult place for a lot of regions. 602 00:37:40,600 --> 00:37:43,960 Speaker 1: And when the Pope and others have talked about a 603 00:37:44,000 --> 00:37:50,480 Speaker 1: just transition, having a just transition means that we have 604 00:37:50,680 --> 00:37:55,440 Speaker 1: to help countries to use their own natural resources for 605 00:37:55,560 --> 00:37:59,400 Speaker 1: energy and dependence and or to develop their economies so 606 00:37:59,440 --> 00:38:02,520 Speaker 1: that they're will have a better quality of life. That's 607 00:38:02,560 --> 00:38:07,080 Speaker 1: something that I think we as Europe needs to do. 608 00:38:07,480 --> 00:38:10,200 Speaker 1: We need to do it. And so for these countries 609 00:38:10,239 --> 00:38:12,680 Speaker 1: that like to tell we're moving away from all in 610 00:38:12,760 --> 00:38:15,480 Speaker 1: gas and we're not going to use it anymore. We're 611 00:38:15,480 --> 00:38:20,600 Speaker 1: going to go to one hundred percent renewables, that actually 612 00:38:20,680 --> 00:38:25,359 Speaker 1: makes it more difficult for the developing countries to have 613 00:38:25,400 --> 00:38:30,360 Speaker 1: a way to develop their natural resources. When do you 614 00:38:30,440 --> 00:38:34,440 Speaker 1: think the demand for oil will peak? I think the 615 00:38:34,480 --> 00:38:38,040 Speaker 1: demand for oil is not going to peak anytime in 616 00:38:38,080 --> 00:38:41,319 Speaker 1: the next five to ten years. I think it'll be 617 00:38:41,320 --> 00:38:44,880 Speaker 1: beyond that. And if you see that it has peaked, 618 00:38:45,280 --> 00:38:47,760 Speaker 1: what will be the steps you would take in return? 619 00:38:47,840 --> 00:38:52,160 Speaker 1: So say, there is a pretty credible analysis coming from 620 00:38:52,200 --> 00:38:55,640 Speaker 1: a colleague highly respect on the opinion side, David Fickling, 621 00:38:55,680 --> 00:38:59,120 Speaker 1: whose calculations show we are either peaking this year or 622 00:38:59,200 --> 00:39:02,960 Speaker 1: be peaked in twenty Typically with these peaks, you won't 623 00:39:02,960 --> 00:39:05,840 Speaker 1: know for a couple of years whether that's actually true. 624 00:39:06,360 --> 00:39:09,000 Speaker 1: But if it is true, would that change any calculation 625 00:39:09,040 --> 00:39:13,880 Speaker 1: for you? Our calculation going forward is to with the 626 00:39:13,880 --> 00:39:16,680 Speaker 1: carbon management. Part of our business is to make our 627 00:39:16,760 --> 00:39:22,440 Speaker 1: oil more attractive than others, So it would impact certainly 628 00:39:24,640 --> 00:39:27,280 Speaker 1: how we look at closely at what others are doing. 629 00:39:27,360 --> 00:39:31,160 Speaker 1: But with the fact that the Europeans are going more 630 00:39:31,280 --> 00:39:38,400 Speaker 1: toward renewables and decreasing law production, with South America, essentially 631 00:39:38,480 --> 00:39:42,640 Speaker 1: with the governments that are that are coming into place 632 00:39:42,800 --> 00:39:46,680 Speaker 1: right now, it will be I think, except you know, 633 00:39:47,200 --> 00:39:50,560 Speaker 1: maybe a country or two, the rest will be declining 634 00:39:50,600 --> 00:39:57,320 Speaker 1: all oil production. Africa's declining production. So I think that 635 00:39:57,520 --> 00:40:00,680 Speaker 1: there has to be some country that steps up to 636 00:40:01,040 --> 00:40:03,440 Speaker 1: make up that difference. And I think the countries that 637 00:40:03,560 --> 00:40:08,600 Speaker 1: will make up that difference should be Saudi Arabia, the UAE, 638 00:40:08,960 --> 00:40:13,440 Speaker 1: and the United States. Now, coming back to carbon management, 639 00:40:13,719 --> 00:40:17,799 Speaker 1: it's a broad phrase. How are you going to look 640 00:40:17,840 --> 00:40:21,440 Speaker 1: at the balance of Oxy's revenues in twenty fifty You 641 00:40:21,520 --> 00:40:24,279 Speaker 1: may not be chief executive officer then, but if you 642 00:40:24,320 --> 00:40:26,680 Speaker 1: have to imagine this is where you're taking the company. 643 00:40:27,480 --> 00:40:31,640 Speaker 1: What portion would be making money from extracting carbon and 644 00:40:31,719 --> 00:40:35,279 Speaker 1: what may be making money from injecting carbon. If our 645 00:40:35,320 --> 00:40:38,080 Speaker 1: plan works the way that we'd like for it to, 646 00:40:38,600 --> 00:40:44,600 Speaker 1: our revenues from our capture of carbon for ourselves and 647 00:40:44,640 --> 00:40:49,440 Speaker 1: others would equal the oil and gas revenues. And that's 648 00:40:49,719 --> 00:40:55,600 Speaker 1: understanding that we don't intend to reduce our oil and 649 00:40:55,640 --> 00:40:59,799 Speaker 1: gas as some are. We intend to develop our own 650 00:40:59,880 --> 00:41:03,759 Speaker 1: gay so that it matches, helps to match demand and so. 651 00:41:04,560 --> 00:41:08,120 Speaker 1: And we believe that using a COO two for Enhanstol 652 00:41:08,160 --> 00:41:12,799 Speaker 1: recovery and generating the zero barrels is the way to 653 00:41:12,960 --> 00:41:15,839 Speaker 1: be the last company standing in terms of who's going 654 00:41:15,880 --> 00:41:19,080 Speaker 1: to produce the last barrel in the world, it should 655 00:41:19,120 --> 00:41:26,319 Speaker 1: come from a cootwo Enhanstol recovery reservoir. In process, that 656 00:41:26,440 --> 00:41:28,799 Speaker 1: was a great conversation. Thanks for coming on the show. 657 00:41:29,040 --> 00:41:31,080 Speaker 1: Thank you. It was great to be here and great 658 00:41:31,120 --> 00:41:43,120 Speaker 1: to talk to you. I appreciated Wiki scanner and hearing 659 00:41:43,160 --> 00:41:46,120 Speaker 1: from an oil executive who's doubling down on what she 660 00:41:46,360 --> 00:41:50,960 Speaker 1: already does. I was surprised, though, that particulate matter air 661 00:41:51,000 --> 00:41:55,920 Speaker 1: pollution didn't factor into the net zero oil calculation. Unsurprisingly, 662 00:41:56,080 --> 00:41:59,840 Speaker 1: Vicki is bullish on oil demand, but if oil demand decreases, 663 00:42:00,160 --> 00:42:03,400 Speaker 1: she sees the strategy of injecting carbon as a hedge 664 00:42:03,480 --> 00:42:07,600 Speaker 1: in a world that needs those services. Given the history 665 00:42:07,600 --> 00:42:11,319 Speaker 1: of the oil industry, all these claims require immense scrutiny 666 00:42:11,400 --> 00:42:17,120 Speaker 1: to hold the industry accountable. Thanks so much for listening 667 00:42:17,120 --> 00:42:20,040 Speaker 1: to Zero. If you like the show, please rate, review 668 00:42:20,120 --> 00:42:23,240 Speaker 1: and subscribe, Tell a friend or tell someone who doesn't 669 00:42:23,280 --> 00:42:26,520 Speaker 1: know about oil's boom and bus cycle. If you've got 670 00:42:26,520 --> 00:42:28,960 Speaker 1: a suggestion for a guest or topic or something you 671 00:42:29,040 --> 00:42:31,680 Speaker 1: just want us to look into, get in touch at 672 00:42:31,760 --> 00:42:37,080 Speaker 1: zero pod at bloombeb dot net. Zero's producer is Oscar 673 00:42:37,120 --> 00:42:41,160 Speaker 1: Boyd and senior producer is Christine driscoll Our. Theme music 674 00:42:41,280 --> 00:42:45,040 Speaker 1: is composed by Wonderlely. Many people help make the show 675 00:42:45,080 --> 00:42:48,280 Speaker 1: a success this week. Thanks to my bloombeb mus colleague 676 00:42:48,360 --> 00:42:52,240 Speaker 1: Kevin Crowley for preparing for this interview and who recently 677 00:42:52,280 --> 00:42:56,279 Speaker 1: published a great article about the Great exon Exodus that 678 00:42:56,320 --> 00:42:58,760 Speaker 1: you can check out at bloombeg dot com slash green. 679 00:42:59,600 --> 00:43:11,040 Speaker 1: I'm Shatrati back next week. M h m hm