Vicki Hollub, CEO of Occidental Petroleum, leads a frontier oil and gas company that's embracing carbon management. In a dynamic discussion, she highlights Oxy’s ambitious plans for direct air capture and the goal of 70 facilities by 2035. Vicki reflects on the industry’s adaptation to climate challenges, emphasizing the potential for carbon-negative oil extraction. She also shares her unique journey to leadership, discussing the importance of innovation and collaboration in navigating the energy transition and addressing public skepticism.
Vicki Hollub emphasizes Occidental Petroleum's commitment to carbon management through significant investments in direct air capture technologies to combat climate change.
The company aims to integrate carbon management into existing oil and gas operations, envisioning a future where fossil fuel extraction can be carbon-negative.
Holub highlights the importance of transparency and collaboration across sectors to bridge the trust gap with critics and foster effective climate solutions.
Deep dives
Overview of OXIE and Its Initiatives
OXIE, also known as Occidental Petroleum, has emerged as a key player in the climate tech space, particularly through its advancements in direct air capture (DAC). The company has made a significant financial commitment, acquiring Carbon Engineering for $1.1 billion in 2023, aiming to deploy 70 DAC facilities globally by 2035. Its endeavors like the 1.5 initiative signify a bold aspiration towards transformative practices that aim to sustainably balance their oil and gas operations with necessary climate action. Moreover, OXIE has received draft permits from the US EPA for the permanent geologic sequestration of CO2, positioning itself at the forefront of innovative carbon management solutions.
Vicky Holub's Journey and Vision
Vicky Holub, the first woman CEO of a major American oil company, has been a pivotal force in OXIE's shift toward carbon management. Starting her career in oil and gas over 40 years ago, she emphasizes that the industry must adapt to the realities of climate change and acknowledges the responsibility oil companies have in addressing environmental concerns. Holub's leadership reflects a commitment to marrying traditional energy practices with innovative carbon management techniques, fostering an engaged workforce focused on redefining the company’s role in combatting climate change. Her personal journey illustrates the evolution of internal values within OXIE, transitioning from purely oil and gas to a greater awareness of sustainability.
Direct Air Capture: Opportunities and Challenges
Direct air capture (DAC) is positioned as a crucial technology for tackling climate change, allowing OXIE to capture CO2 from the atmosphere and utilize it for enhanced oil recovery. Holub notes that this dual approach not only addresses emissions but also offers a pathway to create sustainable products, reducing the company's overall carbon footprint. The challenge is immense as the volume of emissions far exceeds current DAC capabilities, necessitating a scale-up that requires significant resources and partnerships. OXIE's investment in technologies that reduce costs and enhance efficiency shows a proactive strategy to meet the burgeoning demand for effective carbon management.
Balancing Traditional and Innovative Energy Practices
Holub outlines a vision where the energy transition does not mean an abrupt end to oil and gas, but rather a gradual shift towards a lower carbon future. OXIE aims to remain a significant player in energy by integrating carbon management into its existing operations, allowing for continued oil extraction while reducing overall emissions. This approach, which includes utilizing captured CO2 for sustainable aviation fuels and other chemical applications, reflects a practical understanding of the complex landscape of energy needs. The strategy underlines the importance of collaboration across industries to foster innovation and establish a well-rounded transition plan.
Navigating Stakeholder Trust and Collaboration
Critics of traditional oil companies often question their motivations and environmental impact, creating a trust gap that Holub acknowledges. She advocates for open dialogue and collaboration among various stakeholders, emphasizing the necessity of working together to address climate change comprehensively. Holub believes that forming partnerships across different sectors can lead to innovative solutions that strengthen the energy transition while maintaining essential energy supply. Addressing this trust gap requires transparency and a concerted effort from the entire industry to engage with consumers and climate advocates alike.
Our guest is, Vicki Hollub, CEO of Occidental Petroleum (Oxy), a century-old oil and gas company employing over 12,000 people globally with a market cap near $50 billion. Recently the company has made significant investments into what they refer to as “carbon management” technologies including the acquisition of Carbon Engineering, a Direct Air Capture (DAC) company, in 2023 for $1.1 billion. Oxy is commercializing Carbon Engineering’s technology through its 1PointFive initiative and aims to deploy 70 DAC facilities by 2035. These efforts include recently receiving draft permits from the EPA for Class VI Injection wells, enabling the permanent geologic sequestration of CO₂, an advance market commitment from Microsoft to purchase 500,000 metric tons of carbon removal, and an award from the US Department of Energy for up to $500M to build a 1M ton per year facility.
The conversation covers a lot of territory. Vicki acknowledges climate change and its effects on extreme weather and natural ecosystems, while also stating that Oxy does not view the energy transition as a shift away from oil and gas. Instead, she describes a future where oil and gas exploration could become carbon-negative through advancements in enhanced oil recovery (EOR), a technology that uses CO₂ to extract fossil fuels from otherwise depleted wells.
This is a notable interview for MCJ as Vicki is the first oil and gas CEO we’ve had on the show. We believe it’s important to understand how a company like Oxy, which has a very large greenhouse gas emissions footprint, thinks about its future plans. We also know that many who listen to this show are interested in Oxy’s DAC efforts and their perspective on the future of the technologies and markets around it.
Vicki became CEO in 2016, the first woman to lead a major American oil company. We are grateful to Katie Mehnert of ALLY Energy for connecting us with her for this conversation.
In this episode, we cover:
[03:28] Navigating the trust gap between O&G companies and the public
[06:42] Vicki's early career path
[08:32] The O&G boom in the Permian Basin in the mid-2000s
[11:18] Vicki's path to becoming the first female CEO at Oxy
[17:15] Changing dynamics and priorities while running a complex company like Oxy
[18:00] How Vicki pitched Warren Buffet to invest in Oxy and navigated the impacts
[21:11] How Oxy attracts and retains talent, plus generational differences
[26:36] Challenges and opportunities Oxy sees in the energy transition
[30:45] Navigating urgency relative to long-term planning
[34:01] How the transition of innovation and legacy businesses could play out
[44:36] Oxy's focus on carbon management, including direct air capture
[49:55] Challenges in scaling DAC, including partnerships and funding
[53:46] Vicki's thoughts on achieving a net-zero carbon barrel of oil
[59:44] Her perspectives on the future of the oil and gas industry and its evolution
Episode recorded on Sept 11, 2024 (Published on Oct 1, 2024)
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