October 10, 2018 / 10:55 PM / in 2 months

U.S. oil CEO says corporations should work to stem climate change

HOUSTON (Reuters) - Corporations around the world should work together to reduce carbon emissions and stem climate change rather than wait for government mandates, the chief executive of U.S. oil producer Occidental Petroleum Corp said on Wednesday.

Equipment used to process carbon dioxide, crude oil and water is seen at an Occidental Petroleum Corp enhanced oil recovery project in Hobbs, New Mexico, U.S. on May 3, 2017. Picture taken on May 3, 2017. REUTERS/Ernest Scheyder

Pressure is rising on companies, especially in the energy sector, to slash their greenhouse gas emissions in order to prevent climate change. Oxy, which has for years been a vocal supporter of efforts to reduce carbon emissions, is the largest oil producer in the Permian Basin of West Texas and New Mexico, the biggest U.S. oilfield.

“We as corporations, we have to do our part. There are enough companies committed to making it happen,” Vicki Hollub said in an interview on the sidelines of the Tudor, Pickering, Holt & Co Energy Disruption Conference in Houston. “It needs to be a worldwide approach.”

Oxy rival Exxon Mobil Corp said on Tuesday it would donate $1 million to a political action committee’s lobbying campaign to promote a U.S. tax on carbon emissions.

The donation is designed to help sway public opinion around climate change legislation. A carbon tax would shift the financial burden of climate change mitigation efforts from corporations to consumers.

“I think it goes beyond making a donation to some organization,” said Hollub. “It really needs to have the collaboration of all the parties.”

Houston-based Oxy believes it is too soon to support a carbon tax and that corporations should work with regulators and environmentalists to study the best approach, Hollub said.

“We’re not really prepared right to say it needs to be a tax,” said Hollub, who became CEO in 2016.

Oxy’s production prowess in the Permian stems from its use of a technique that harnesses carbon dioxide produced from power plants, forcing it back into aging oilfields. That boosts the pressure underground and drives more oil to the surface.

It is a process that Oxy has historically used in conventional oilfields, but is studying how to use in shale wells, Hollub said.

Still, oil producers remain controversial in the fight against rising temperatures.

A report from the United Nations Intergovernmental Panel on Climate Change released on Monday said renewable energy would need to supply 70-85 percent of electricity by 2050 to help stem climate change, compared with about 25 percent now.

The Paris Climate Accord’s goal of capping global temperature increases to well below 2 degrees Celsius (3.6 degrees Fahrenheit) is “important to us,” Hollub said.

U.S. President Donald Trump’s decision to pull out of the Paris agreement was “the right thing for the country,” Hollub said, adding that Oxy and other corporations should still focus on cutting emissions.

“And we’re committed to doing our part,” she said. “We shouldn’t have to be told to do it.”

Reporting by Ernest Scheyder; Editing by Cynthia Osterman and Diane Craft

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