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The business of carbon removal

JUANA SUMMERS, HOST:

Occidental Petroleum, an American oil company, is launching a multibillion-dollar plan to pull carbon dioxide out of the air. This is taking carbon we already released into the atmosphere and pulling it back out of the sky with giant machines. That might be good for the planet, but can it be a real business? NPR's Camila Domonoske says the real question is what kind of business?

CAMILA DOMONOSKE, BYLINE: Major climate groups say we will need to pull a lot of carbon from the sky. Giant carbon-sucking machines are one way to do it - a difficult way - right now, a very expensive way. But companies are starting to do this, following two different paths for turning carbon into money. One is to store it and charge for that good deed. The other is to use carbon dioxide to make oil. Let's talk about the oil first.

(SOUNDBITE OF ROCKS TAPPING)

DOMONOSKE: At his lab in UT Permian Basin in West Texas, geologist Bob Trentham taps together rocks from more than 2,000 feet underground.

BOB TRENTHAM: See these little holes here?

DOMONOSKE: Those holes used to be full of oil. When you first drill a well, oil gushes out. Over time, it slows to a trickle. But there's still a lot of oil stuck underground. Trentham says it makes sense if you think about what oil is like.

TRENTHAM: You change the oil in your car - which nobody does anymore - but you get oil all over your hands. But you can use a rag to get most of it off, but it's going to stay there until you use a detergent.

DOMONOSKE: So just like oil sticks to your hands, oil sticks to rocks deep underground. And the way soap and water can get more oil off your hands, CO2 and water can get more oil out of the rock. Carbon dioxide pressurized and injected deep underground is really good at squeezing more oil out of old wells.

TRENTHAM: It's kind of like Mr. Clean. It gets in there, and it scrubs some of the oil off the pores and produce more oil.

DOMONOSKE: Oil that you can sell - Occidental Petroleum has been doing this for decades using cheap sources of carbon dioxide. So now, Oxy plans to use carbon sucked from the sky. And because this process leaves carbon stuck underground, they'll sell the resulting oil at a premium, as net-zero oil. Net zero, as in the carbon pulled from the sky, cancels out the carbon from burning the oil. Now, some climate advocates question if net-zero oil will really be zero carbon. But even if the math checks out, Oxy's rivals prefer the second option. Carlos Haertel of direct air capture company Climeworks says he's not touching oil production.

CARLOS HAERTEL: We want to just make sure that we never can even come close to it.

DOMONOSKE: Climeworks doesn't make more oil. It injects carbon underground just to store it, so it stops contributing to climate change. Companies, including some big tech companies, will pay for this service to cancel out their emissions or just burnish a green reputation. It's called buying carbon removal credits. And those customers...

HAERTEL: They do not want to end up on the front page of a newspaper saying, like, yeah, yeah, they do this. But look - right? - they help someone else to pump more oil out of the ground, right? This is all kind of fishy, and nobody knows exactly what the scheme here is.

DOMONOSKE: Climeworks and Global Thermostat, another company in this burgeoning industry, are intentionally focused on storing carbon without making more oil. Here's the thing - both pathways rely on the government to have any hope of being profitable, and the government is trying to incentivize storage. After a lobbying push from an unusual coalition, including green groups and Oxy, the Federal government is pouring lots of money into this. Here's Secretary of Energy Jennifer Granholm announcing funding for two carbon sequestration hubs.

JENNIFER GRANHOLM: To us, this is Bidenomics (ph) in action - making smart investments in our industries, making smart investments in our workers, our communities.

DOMONOSKE: There's some federal support for the more oil business model, but much more money for the storage business model. Oxy is investing in both right now. In fact, one of those carbon sequestration hubs the government just funded - it's an Oxy project. But long-term, CEO Vicki Hollub has a very clear preference. The oil exec says more oil makes more sense. The infrastructure is there anyway, and she says buyers like airlines are lining up.

VICKI HOLLUB: I would say that those who get the concept of zero-carbon oil actually prefer that.

DOMONOSKE: So while the government is incentivizing the greener path right now, Hollub thinks the market long-term might favor more oil. The stakes could be high. Exactly how much direct air capture the world will be willing to pay for is a topic of fierce debate. There are cheaper and more efficient ways to fight climate change. But some projections for direct air capture are enormous - tremendous quantities of energy, huge steel plants, boatloads of chemicals, pipelines to carry CO2, wells to store it. It could become something on the scale of the oil industry today.

Camila Domonoske, NPR News.

SUMMERS: Tune in tomorrow afternoon for the third story in this series about what these projects could mean for the effort to stop climate change. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Camila Flamiano Domonoske covers cars, energy and the future of mobility for NPR's Business Desk.
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