Occidental Petroleum Corporation (Oxy) has rejected the proposed U.S. carbon tax, preferring the existing system of tax credits designed to push oil companies to store carbon dioxide and reduce their emissions, according to Bloomberg.
Firstly, such position marks a deep contrast with other oil supermajor rivals of Oxy, like ExxonMobil or even the American Petroleum Institute industry group; which all agree and endorse the last month’s vote for a tax on carbon dioxide emissions.
Secondly, Oxy’s position is backed by refiners and independent producers that have opposed to such move. Moreover, the company’s CEO, Vicki Hollub, said at a conference hosted by Texas Independent Producers & Royalty Owners Association, this Tuesday, that Oxy endorses the 45Q tax credit structure; that gives companies credit for capturing and storing CO2.
She also said. “A carbon tax would be bad for a lot of the industry; a carbon tax would be bad for the consumers; especially for those consumers who are more disadvantaged from an economic standpoint. Such strategy is not what we’re pushing at all.”
In addition, she remarked that in Oxy they praise California for its low-carbon fuel standards; saying they functioned better than Europe’s policy of limiting emissions and trading allowances. “California is addressing carbon the right way; their clean fuel standards and the 45Q carbon storage credit are incentivizing and rewarding the use of technology.”
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Oxy, the first to capture CO2 directly from the air
On the other hand, Hollub’s position is backed by Oxy’s attempts to position itself as one of America’s most forward-thinking oil producers; in terms of facing the energy transition. In recent months the company launched Oxy Low Carbon Ventures; a company that will develop the first CO2 air capture facility.
Moreover, it was the first American companies to announce a net-zero carbon emissions target; it also has an ambitious economic plan that would deliver the same amount of revenue in their low carbon ventures, that in its traditional oil and gas business.
However, the company do not endorsed some of the strategies that the new administration in the United States are pushing to combat climate change. Like the ban of drillings in federal lands.
Finally, Hollub commented on the matter. “In the absence of a good plan on how to continue to lower emissions from the existing production that we have in the U.S. President Biden and his administration are going to feel forced to do something on their own.” She concluded. “And I think that something would be to further limit leasing on federal lands. There could be a production impact.”