PERRY: After Overcoming Obstacles, Texas is Continuing to Lead the Way with New Energy Production

By overcoming the obstacles, Texas is going to continue leading the way in Energy Production

By Former Texas Gov. Rick Perry

AUSTIN, Texas (Texas Insider Report) — As Secretary of Energy under President Donald Trump, I made our nation’s energy security – as well as exploring innovative technologies – a major priority. My creation of the Office of Cybersecurity, Energy Security & Emergency Response helped elevate these issues across the public and private sectors. By addressing the problems of tomorrow, while protecting the flow of reliable and efficient energy, we will expand our oil and gas production as the U.S. strives to become energy independent once more.

Houston-based Occidental Petroleum recently announced a new joint venture with BlackRock, which will see the New York-based asset manager invest more than half a billion dollars into Oxy’s Stratos Direct Air Capture (DAC) Facility in West Texas. Once operational in mid-2025, it will become the largest DAC facility in the world, leveraging Oxy’s decades of experience to further Enhanced Oil Recovery (EOR). 

In addition to increasing production of oil fields, this process can also permanently store carbon dioxide underground. Thanks to this new joint venture, EOR will help extend the lifecycle of maturing oil fields in the Permian Basin, breathing new life into Texas’ oil producers for decades to come.

Vicki Hollub, Oxy’s CEO, is bullish on the immense value DAC will provide to ensure Oxy continues to be one of Texas’ leading oil producers. Earlier this year, Hollub (right,) said,
“We believe that our direct capture technology is going to be the technology that helps to preserve our industry over time.

"This gives our industry a license to continue to operate for the 60, 70, 80 years that I think it’s going to be very much needed.”

Although Oxy’s long-term approach to sustaining Texas’ oil fields through supporting sequestration of carbon – the removal of CO2 from the atmosphere and returning it to the earth – is still in its infancy, the project’s anticipated success will no doubt spur a modern-day gold rush of investment into the technology, both from energy companies and those on Wall Street looking to make a profit.

Amidst the myriad complexities of global warming that have been debated for decades, a key benefit of this project is clear: reducing the concentration of CO2 in the atmosphere will benefit oil and gas producers.

Thanks to the joint venture between Oxy and BlackRock, which will employ more than 1,000 workers to build this new DAC facility, we should see greater long-term interest and support for simultaneously removing CO2 from the atmosphere while extending the longevity of one of Texas’ most important industries – the oil and gas sector.

BlackRock Shift

BlackRock has been alluding to DAC’s benefits for months. Back in April of 2023, BlackRock CEO Larry Fink told interviewers:
“You need to do sequestration at the same time, as we're going to be using hydrocarbons for many, many years.”

Then, when asked about the Oxy deal by the Houston Chronicle following the announcementFink affirmed,

“The investment is part of a history of contributions to Texas energy companies with big ambitions.”

The $550 million investment by BlackRock into EOR comes amid a noticeable shift by the investment manager as it relates to how it talks about energy – including how it casts votes on environment-related shareholder proposals. For example, BlackRock voted for just 7% of the shareholder proposals on environmental and social issues during the most recent proxy voting cycle – a steep decline from the 47% they supported in 2021.

BlackRock’s additional investment in Oxy’s long-term oil production, its sharp decline of support for environmental shareholder resolutions, and Larry Fink’s public comments supporting Texas’ energy industry demonstrate this shift since the company was placed on Texas Comptroller Glenn Hegar’s list of companies that boycott energy companies last year.

Governor Abbott, the Texas legislature, and Comptroller Hegar deserve credit for helping instigate such a seismic – and positive – shift from one of the world’s largest corporations.

U.S. Advantages

The U.S. Oil & Gas Industry uniquely possesses the engineering knowledge required to innovate carbon sequestration technologies – as well as the creditworthiness required to attract a half a billion dollar vote of confidence. We must continue to unleash our biggest market players like Oxy and others so they can take on ambitious projects on our turf, rather than see competitors like China corner this market.

Most importantly, Oxy’s DAC project and the attention it has garnered from Wall Street shows Texas is going to continue leading the way in energy production.

Rick Perry served as the Governor of Texas from 2000 to 2015, and as the U.S. Energy Secretary from 2017 to 2019.