This post was originally published on this site
Chevron Corp. CVX, -0.28% is partnering with Microsoft Corp. MSFT, -1.24%, oilfield services firm Schlumberger New Energy SLB, -2.29% and privately held Clean Energy Systems to build a carbon capture plant in California. It’s another push by the oil major to invest in renewables and other technology in anticipation of a tougher selling climate for its traditional energy.
The plant, located in Mendota, Calif., will convert agricultural biomass to electricity. The process includes using biomass fuel that consumes CO2 over its lifetime to produce power and then permanently store the produced CO2 under ground. The anticipated result is net-negative carbon emissions.
Chevron’s investors have upped the pressure on the company to evolve as the U.S. works toward net-zero emissions. U.S. oil firms have historically lagged their European counterparts in this area. ExxonMobil XOM, +1.57%, which has faced activist investor and environmental group criticism for its standout delays in cutting carbon detailed its own plans for a lower-carbon future this week.
Chevron and its partners expect that the carbon-capture plant at full operation will use about 200,000 tons of agricultural waste and remove around 300,000 tons of carbon dioxide every year. That is equivalent to the emissions from electricity use of more than 65,000 U.S. homes.
Criticism of carbon capture typically points to an unwillingness to aggressively cut fossil-fuel burning overall, seen as a key habit shift to meet lower-emissions goals set by the Paris climate pact and individual efforts. Proponents of the practice believe it is smart to throw all efforts behind slowing manmade global warming, including those that help the U.S. keep energy independence on the global stage. Carbon capture typically features in most bipartisan climate-change efforts.
The ability of powerhouses like Chevron and other of its Big Oil competitors to scale carbon capture is part of the appeal for those in favor of the technology.
“We are excited to welcome Chevron and Microsoft on this exciting opportunity, as it further demonstrates how we play an enabling role to deploy carbon capture and sequestration solutions at scale,” said Ashok Belani, Schlumberger New Energy executive vice president.
Read: Elon Musk puts up $100 million for carbon-capture competition — scalability isn’t so easy
The venture fits with plans outlined by California’s Air Resources Control Board last month to start phasing out all agricultural waste burning in this part of the state by 2025.
Energy stocks XLE, +0.12% were among the stocks leading broader market SPX, -2.43% gains Thursday. Oil futures rallied by more than 5% after the Organization of the Petroleum Exporting Countries and its allies said they will rollover current production cuts to the end of April. Chevron shares are up more than 25% so far in 2021 and up 9% over the past year.
