Occidental Petroleum’s federal lobbying spending soared to nearly $5.9 million in the first half of 2023 as it sought government funding for a commercial-scale plant to vacuum carbon dioxide (CO2) from atmosphere, according to an OpenSecrets analysis of lobbying disclosures.
The new federal lobbying totals for the first and second quarters of 2023 represent an increase of more than 40% compared to the same point in 2022, when adjusted for inflation. The fossil fuel company’s supplier of carbon removal technology, Carbon Engineering, spent an additional $72,000 on federal lobbying in 2023.
Less than six weeks after the latest lobbying disclosures were filed, the Department of Energy on Aug. 11 announced up to $1.2 billion in funding for two direct air capture hubs in Texas and Louisiana — one developed by Occidental, the other by the nonprofit research institute Battelle and carbon capture technology suppliers, Climeworks and Heirloom Carbon Technologies.
The facilities, once operational, will each aim to remove 1 million metric tons of heat-trapping CO2 from the atmosphere annually to slow the rate of global warming.
The hubs will be the largest carbon removal projects of their kind to receive taxpayer dollars and will test the commercial viability of direct air capture, or DAC, a nascent technology some scientists say will play a critical role in tackling climate change. Others disagree, however, arguing that there are more efficient and cost effective ways of dealing with planet-warming greenhouse gas emissions.
Existing carbon capture plants, like those fitted to gas processing facilities, trap CO2 emitted from industrial sources. By contrast, direct air capture plants extract CO2 from ambient air. Advocates claim these facilities will not only offset emissions from industries not easily decarbonized, such as agriculture and aviation, but also rapidly reduce the amount of existing CO2 in the atmosphere.
“Cutting back on our carbon emissions alone won’t reverse the growing impacts of climate change,” Secretary of Energy Jennifer Granholm said in a recent press release. “We also need to remove the CO2 that we’ve already put in the atmosphere.”
The Energy Department estimates that achieving President Joe Biden’s climate goals will require between 400 million and 1.8 billion metric tons of CO2 to be removed from the atmosphere and captured from emissions sources annually by 2050. Globally, about 10 billion metric tons of CO2 will need to be captured every year, according to the National Academy of Sciences.
To that end, the 2021 Infrastructure Investment and Jobs Act appropriated $11.5 billion in government subsidies to spur innovation in the burgeoning carbon management industry, with $3.5 billion reserved for four direct air capture hubs. The Energy Department intends to award grants to two more projects in the coming years.
Occidental was not the only company to lobby the federal government on direct air capture. The technology has drawn interest from a range of companies, investors and civic organizations that view the carbon management industry as a crucial — and lucrative — partner in the fight against climate change. At the annual CERAWeek energy conference in March 2023, Occidental CEO Vicki Hollub projected that the industry could be worth $5 trillion.
In 2022, the Bipartisan Policy Center, a Washington, D.C. think tank, spent nearly $3.1 million lobbying the federal government on issues, including direct air capture. Three years earlier, the Bipartisan Policy Center formed a direct air capture advisory council to advance public policies promoting the commercial deployment of the technology. The council’s members have included top executives at Occidental, 1PointFive, Carbon Engineering and Climeworks, as well as four former lawmakers.
In an email to OpenSecrets, Sasha Mackler, Executive Director of the Energy Program at the Bipartisan Policy Center, said the advisory council includes “a diverse set of stakeholders from the business and policy communities” who are “focused on exploring the appropriate role of carbon removal, and DAC, as part of a long-term strategy for achieving net-zero greenhouse gas emission by 2050.”
“BPC’s Energy Program has long advocated for a broad set of technology and policy solutions to reduce carbon emissions, enhance American competitiveness, and address the risks of climate change,” Mackler added.
Direct air capture was also among the many issues mentioned by Microsoft on lobbying disclosures in 2022 and 2023. The tech giant has invested $1 billion into companies and venture funds that advance climate technology solutions, including Climeworks and Heirloom Carbon Technologies.
Battelle, which spent $460,000 on lobbying during the first half of 2023, did not mention direct air capture by name in lobbying disclosures but did seek to influence the Energy Department on issues related to research and development. Meanwhile, Heirloom spent $100,000 in the first half of 2023 lobbying the federal government on direct air capture and other issues.
In addition to direct subsidies, the Biden administration has raised the tax credits for capturing carbon — with the most generous write-offs going to direct air capture projects that store CO2 underground permanently.
Several of the largest and most profitable oil and gas companies in the U.S. lobbied for the change, including Occidental, ExxonMobil and ConocoPhillips. The American Petroleum Institute, which spent nearly $4.4 million lobbying the federal government in 2022, counted raising the tax credit for carbon capture among its top 10 priorities last year.
Critics of direct air capture claim the technology consumes too much energy, making it expensive, ineffective and difficult to scale.
Some direct air capture facilities may even be counterproductive. A 2023 peer-reviewed assessment of carbon removal practices found that direct air capture plants powered by fossil fuels emitted more greenhouse gasses than they removed.
“The carbon capture system that Occidental Petroleum will be using relies on fossil fuel to power most of the process,” June Sekera, a co-author of the study, told OpenSecrets. “As one scientist said to me, ‘That’s like leaving the refrigerator door open to air condition your house.’”
A visiting scholar at The New School for Social Research, Sekera studies public policy. She argues that taxpayer dollars would be better spent on biological forms of carbon removal, such as reforestation, which have not received the same level of attention and public financing as direct air capture.
Occidental Petroleum did not respond to requests for comment.
Battelle and its partners declined to answer questions about the proposed direct air capture hub in Louisiana, citing ongoing negotiations with the Energy Department, but Heirloom noted its unique carbon removal process relies on electric kilns powered by 100% renewable energy.
“The science is incredibly clear that even with the most aggressive decarbonization efforts, we need to remove massive amounts of CO2 from the atmosphere in order to meet climate targets,” a spokesperson for the company wrote in an email to OpenSecrets. “While Heirloom’s technology offers one of the lowest-cost pathways to scaled CO2 removal, we welcome others who are working to deploy and scale other technologies.”
Heirloom also said the company has made a commitment that no CO2 captured by its facilities will be used for the purposes of “enhanced oil recovery” whereby carbon is injected into depleted oil reservoirs to squeeze more crude from the ground.
Critics of carbon capture technology have noted that most existing carbon capture plants at industrial facilities use CO2 to bolster oil production. This was true of all but two of the 13 carbon capture plants operating in the U.S. in 2022, according to the Global CCS Institute, a think tank.
The South Texas and Louisiana direct air capture hubs selected to receive government grants won’t support fossil fuel production, although the Energy Department, under pressure from congressional lawmakers, has said oil-producing projects would be eligible for taxpayer dollars.
Occidental is a leading producer of oil using CO2. Historically, the company has relied on CO2 sourced from underground deposits, but it has made large investments recently in projects to extract carbon from industrial facilities and the air. It is currently developing two carbon capture facilities at ethanol plants in West Texas that will support the company’s enhanced oil recovery operations in the oil-rich Permian Basin.
In addition to the South Texas DAC hub, the company is building a large-scale direct air capture plant in West Texas named Stratos that it said will also facilitate oil recovery. The plant is projected to capture 500,000 metric tons of CO2 annually once completed in 2025. It is one of more than 100 direct air capture facilities Occidental plans to deploy worldwide by 2035.
Days after the Energy Departments’ announced funding for its project in South Texas, Occidental also announced a deal to acquire its supplier of carbon capture technology, Carbon Engineering, for $1.1 billion.
At CERAWeek in March, Hollub, Occidental’s chief executive, described how carbon capture could sustain the oil and gas industry for decades to come.
“We believe that our direct capture technology is going to be the technology that helps to preserve our industry over time,” Hollub told the audience, according to Politico. “This gives our industry a license to continue to operate for the 60, 70, 80 years that I think it’s going to be very much needed.”
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Source: OpenSecrets.org
