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How Oxy’s New Carbon Venture Could Become A True Game-Changer

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For decades, the oil and gas industry has engaged in the use of carbon dioxide as a tool for the stimulation of oil production from depleting conventional reservoirs. The process has involved the injection of large volumes of CO2 into these discrete reservoirs to raise formation pressure and force more oil to the surface.

As the climate science community has increasingly focused on CO2 as a greenhouse gas and oil companies have come under mounting pressure from ESG-focused investors to make a difference in the climate change realm, companies have begun to realize that if the exit avenues can be properly sealed off, these formations are capable of storing trillions of gallons of CO2 into perpetuity. The beauty part is that such reservoirs exist today all over the country, and are most bountiful in Texas, along its Gulf Coast and across the vast Permian Basin.

As I noted in February, integrated companies like ExxonMobil and Oxy have been big players in this carbon capture, utilization and sequestration (CCUS) game for many years now, with Exxon able to accurately state it has been responsible already for capturing 40% of all the CO2 that has ever been captured on earth. Exxon is so excited about the potential for the future that it has established an entire new business unit dedicated to devising and mounting profitable CCUS ventures in the years to come.

Obviously, the potential for taking CO2 out of the atmosphere expands dramatically if mankind can find scalable ways to reuse it in other ways. To achieve this objective, Oxy Low Carbon Ventures formed a partnership with Cemvita Factory, a Houston-based company that has developed a photosynthesis-based process that enables it to take CO2 from any source and convert it into a wide array of products.

Last week, Oxy and Cemvita announced a new step in their venture: The establishment of a pilot project for conversion of CO2 to Bioethylene. Oxy affiliate OxyChem, which currently manufactures and uses large volumes of ethylene in its chlorovinyls business can then use the Bioethylene as feedstock. These chlorovinyls are used in the manufacture of all manner of plastics, including foams, PVC pipes and many other items we all use in our daily lives.

The eventual goal of this new venture is to capture CO2 emissions from a cogeneration power plant as its feedstock, and manufacture bio-ethylene using a process that requires only a Cemvita-developed microbe, water and sunlight as its other elements.

“What’s called green bio-ethylene today is made from bioethanol that’s made from sugar in Brazil,” Moji Karimi, CEO of Cemvita, told me when I spoke to him recently. “If you think about it, sugarcane also came from photosynthesis with CO2 and water as feedstocks. When people say ‘bio’ in front of a product today, it’s not that the process of making it is ‘bio,’ it’s that the feedstock is from bio-mass like sugarcane or corn. They also go through the photosynthesis process in the raising of the corn or sugarcane to make up this bio-mass, but it’s through a very inefficient and slow process. You have to water these crops, you have to use fertilizer, you have to use land, you’re competing with food. And then you have to transport them and then deconstruct them to get to the sugar to use in your process.”

For many years, the bio-ethylene and bio-ethanol businesses have been criticized for the fact that their main feedstock – sugarcane in Brazil, corn in the United States – takes food from the food chain and requires a very energy-intensive process to break down that food into a raw material usable in their process. Some have even alleged that the process of making bioethanol consumes almost as much energy as the fuel ultimately provides.

“Why not simplify this process and just start from the CO2 itself, because now we have the tools to do it? That’s exactly Cemvita’s vision, to make bio-ethylene from CO2 and water directly,” Karimi said.

There is no more over-used term in the English language than “game-changer.” But this venture between Oxy and Cemvita Factory, which has the potential to remove the process of making biofuels completely out of the food chain, with the sun providing the energy required, has the potential to qualify as exactly that.

It isn’t hard to see where this might go, assuming it can ultimately be brought up to scale. Karimi admits that the pilot plant will begin with relatively small volumes – an initial anticipated output of 1 metric ton per month – but the plan is to scale things up rapidly. “What we are working on right now is to show that this concept is possible with the small-scale pilot plant. Based on the results, we plan to scale up the process to the demonstration plant and final commercial plant during the window of 2022-2025,” he said.

Another positive here is that Cemvita’s core process can be applied to the making of a wide array of different products. The company has already developed a diverse set of product-specific microbes, and its process can work at any location that can provide a source of CO2, the needed volumes of water and light as feedstocks. In fact, Cemvita’s work was recognized on April 8 by BloombergNEF as one of a dozen winners of its 2021 BNEF Pioneers – early-stage companies that are pursuing exciting and important low-carbon opportunities.

For an oil and gas industry looking for ways to remake its public image in a way that allows it to be seen as a part of the solution to the climate change conundrum, CCUS has always seemed to present a likely partnership, with its obvious synergies with the upstream, drilling and production segment of the business. This new realm of utilization of CO2 for the manufacture of other products presents a similar opportunity for the downstream segment.

“This is an opportunity to close the loop,” Karimi said. “On one hand, you have the CO2 as a waste stream, and now you are using it as a feedstock for downstream processes, which Oxy, with its downstream business, can do.”

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