US energy company Occidental Petroleum Corporation (OXY) is considering raising its margins and rethinking dividend payments with environmentally-conscious businesses like carbon capture as opposed to producing more gas and oil.
The announcement was made on Thursday by the company’s Chief Executive Vicki A. Hollub.
Occidental has an output of 1.2 billion barrels of oil equivalent (boe) per day. And according to Hollub, the best thing that oil and gas corporations like Occidental can do to advance the global energy transition is to produce just enough oil to meet demand while generating more cash and less harmful emissions.
At this time, Hollub said, the company does not see a need to ramp up production in 2022 and beyond. Instead, Occidental envisions its growth over the next decade or so to be focused on reestablishing dividend.
And the company has already drawn up a plan on how to do that.
In fact, its program to capture CO2 emissions from the air as a means of mitigating the global climate crisis is among the most ambitious in the industry.
For instance, Occidental plans to enter the burgeoning carbon capture business. The company will begin construction of a direct air capture (DAC) facility next year. Its estimated capacity is said to be up to 1 million tonnes of carbon dioxide per annum, which Hollub believes will be able to generate returns for shareholders in the years to come.
In addition, hopes are very high that the US Congress will soon pass a tax credit amendments act that will procure financing for carbon capture projects and raise the value of carbon credits.
Namely, the bill is set to increase the 45Q credit value from $50 to $120 per metric ton of CO2 captured using DAC plants and then stored in saline geologic formations.
Hollub concluded that direct air capture is not technology to be used on a whim but an absolute necessity in today’s world.
Read more: Occidental CEO Opposes Proposed Carbon Tax