According to Vicki Hollub, president and CEO of Occidental Petroleum Corp., two of the most essential elements of preparing for the energy transition are recognizing the importance of sustainability and environmental, social and governmental (ESG) considerations.
"Typically, what we have found is that investors in Europe, for a long time, have been very focused on sustainability and ESG criteria, but that focus is now growing in the investment community in the United States," Hollub said. "We welcome that. We think it's really important for that to happen because ESG and sustainability should not mean 'check the box' among things corporations need to do. We really need that to be important to the corporation."
Vicki HollubExecutive VP of U.S. Operations at Oxy Oil and Gas
Vicki Hollub, president and CEO, Occidental Petroleum Corp.
Speaking recently at CERAWeek by IHS Markit, Hollub noted that "leaders in both climate change and in addressing the social issues that are prevalent in our world today" inspire more commitment to these goals.
Using ESG criteria as a tool helps companies view ESG criteria and climate change as opportunities.
In 2019, Occidental Petroleum established its Sustainability and Shareholder Engagement Committee, which provides oversight for the company's sustainability and ESG criteria.
"I'm really proud of the climate report we just put out, because it has more than 'just words,'" Hollub said. "It has substance around not only what our milestones are going to be, but also how we're going to achieve them so our investors can track what we do. That's important to us.
"We're saying what we will do in the climate change report and also talking about how we do it by focusing on our stakeholders -- first on our investors, then our shareholders, our employees and the communities where we operate," Hollub continued.
Hollub shared that, had she been asked as recently as three years ago who she considers to be her company's stakeholders -- outside of its employees and investors -- she would have pointed to the communities where Occidental operates.
"But there is much more to it than that. It's the world, really," Hollub said. "When you think about your stakeholder being the world, then really, you do things differently than how you did before."
Hollub said she believes "being vocal about sustainability oversight with more focus on ESG criteria will make [Occidental] a stronger company," adding that she encourages other industry leaders to do the same.
Working together
Occidental's ultimate goal, Hollub said, "is to provide the world with net-zero carbon oil."
The company will achieve that feat, she explained, by leveraging its 40 years of experience in carbon dioxide-enhanced oil recovery.
"With that, we've started to not only lower our emissions in our own operations more aggressively than we ever have, but we have the low-carbon ventures as part of our strategy to capture anthropogenic carbon dioxide from industry and directly from the air," Hollub said, citing significant progress.
Occidental has also engaged White Energy's two ethanol plants in Texas to take the carbon from those plants and sequester it in the Permian.
"We've also advanced our movement toward getting beyond those ethanol plants. We're going to take carbon dioxide from a steel plant in Colorado and get that to the Permian," Hollub said. "Both of those projects are very, very important to show the rest of those industries that it can be done, and ultimately it adds value to those facilities over time."
Partnering with United Airlines, Occidental is also planning to build "what will be the largest direct air-capturing facility in the Permian." United has also committed to getting to net-zero by 2050.
"And we're very excited about that," Hollub concluded. "We're going beyond what we're doing in our own operations and we're trying to help others do things like this as well."
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