Oil and gas in the age of climate change

Of these segments, carbon capture, utilization and storage (CCUS) is the fastest growing opportunity, thanks to a big boost from the US Inflation Reduction Act (IRA), Rennick said.

Occidental Petroleum Corporation (Oxy) is seen as a strong contender for the CCUS project

To achieve climate goals, McKinsey & Company proposes the creation of CCUS centers, essentially a cluster of facilities that share the same infrastructure for the transportation, storage, or utilization of carbon dioxide. Currently, there are only 15 CCUS centers worldwide; McKinsey estimates that as many as 700 CCUS centers could be established worldwide, which would be located at or near potential CO2 storage sites and enhanced oil and gas recovery sites.

The U.S. government currently supports four CCUS centers, with Occidental Petroleum Corp. 's (Oxy) two major CCUS projects seen as strong contenders. The U.S. government will provide three levels of funding, from $3 million in the initial feasibility study phase, to $12.5 million in the engineering design study phase, and up to $500 million for projects nearing completion of the procurement, construction and operation phase.

Swiss startup Climeworks has raised more than $800 million to date and is one of the most active CCUS companies in the world to date.

McKinsey & Company estimates that the world will need to invest $120 billion to $150 billion annually in CCUS technologies by 2035 to achieve net zero emissions. In order to scale this technology effectively, McKinsey notes that there is a need for greater coordination across the value chain. Thankfully, as demand for fossil fuels cools, the existing big energy giants seem keen to position themselves in what could be a multi-trillion dollar industry.