HOUSTON (Bloomberg) –Occidental Petroleum Corp. split with some of its larger rivals in rejecting a U.S. carbon tax, preferring the existing system of tax credits designed to encourage oil companies to store carbon dioxide and reduce emissions.
“A carbon tax would be bad for a lot of the industry, a carbon tax would be bad for the consumers and especially for those consumers who are more disadvantaged from an economic standpoint,” Occidental Chief Executive Officer Vicki Hollub said at a conference hosted by Texas Independent Producers & Royalty Owners Association Tuesday. “A carbon tax is not what we’re pushing at all.”
The position appears to stand in contrast with that of larger players like Exxon Mobil Corp. and the American Petroleum Institute industry group, which voted last month to endorse putting a tax or other price on carbon dioxide emissions. Occidental was a key proponent of the 45Q tax credit that benefits companies that capture carbon and store the pollutant in the ground.
“We in Texas kind of criticize California a bit,” but the state is “addressing carbon the right way,” Hollub said. California’s fuel standards, along with the 45Q carbon storage tax credit, is “incentivizing the use of technology and rewarding the use of technology,” she said.
President Joe Biden made clean energy a key pledge in his election campaign last year and took the oil industry by surprise in the first months of his presidency by canceling the Keystone XL crude pipeline and restricting drilling on federal land.
Oil producers must provide palatable options for the Biden administration or risk having “extreme measures” forced upon them, Hollub said.
“In the absence of a good plan on how to continue to lower emissions from the existing production that we have in the U.S., President Biden and his administration are going to feel forced to do something on their own,” she said. “And I think that something would be to further limit leasing on federal lands. There could be a production impact.”
