A unit of U.S. Occidental said this week it had delivered the world's first shipment of carbon-neutral oil, or oil where emissions associated with the entire crude lifecycle-well head through the combustion of end products-have been offset.
Occidental's division Oxy Low Carbon Ventures (OLCV) delivered the cargo of two million barrels of carbon-neutral oil to Reliance Industries in India in a transaction arranged together with Macquarie Group's Commodities and Global Markets group.
The delivery of the oil, produced by Occidental in the Permian, "is a first step in the creation of a new market for climate-differentiated crude oil," Oxy Low Carbon Ventures said.
Occidental eventually plans to produce net-zero oil, where it would abate atmospheric carbon dioxide in an amount equivalent to the CO2 associated with the production, delivery, and refining of the crude oil and the use of the resulting product.
"We are taking important initial steps to work with our customers in hard-to-decarbonize industries to offer carbon-neutral and other low-carbon products that will leverage our expertise in carbon management to lower their total carbon impact and address Scope 3 emissions," Richard Jackson, President Oxy Low Carbon Ventures, said in a statement.
At the end of last year, Occidental became the first major U.S. oil company to announce an ambition to achieve net-zero greenhouse gas emissions associated with the use of its products by 2050. Oxy cited its expertise in enhanced oil recovery, which features CO2 injection into oil wells, as well as experience with carbon capture technology, which, according to the company, position it at the forefront of emission-cutting efforts.
Occidental's capture and use of CO2 for oil production does more for reducing emissions than Tesla, Oxy's chief executive Vicki Hollub told the Financial Times earlier this month.
"What we're sequestering today takes essentially about 4m cars off the road on an annual basis," Hollub told FT, adding: "It does more than what Tesla's doing right now - although we need Tesla to continue what they're doing. It's going to take everything."
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More