HOUSTON—For William Swetra, low carbon strategy analyst for Oxy Low Carbon Ventures (OLCV), a wholly-owned subsidiary of Occidental Petroleum Corp., “the energy transition presents a dual challenge: more energy, less carbon.”

But the first step for the oil and gas industry, which dominates the energy scene, is acknowledging the transition is happening, Swetra told a crowd gathered Oct. 2 for an annual energy summit co-hosted by the Baker Institute Center for Energy Studies and Baker Botts LLP.

Occidental, which recently completed its acquisition of Anadarko Petroleum Corp. and grew its production to about 1.3 million barrels per day, is one of 13 oil and gas companies comprising the Oil and Gas Climate Initiative (OGCI), a CEO-led initiative that aims lower carbon footprints.

Reiterating OGCI’s words, Swetra—speaking as part of a panel on energy transitions, legacy industry and new directions—said “the climate challenge demands urgent action” and “significant acceleration of transition to a low-carbon future requires sustainable large-scale actions.”

But “It also requires passion and innovation,” he said, noting CEO Vicki Hollub’s message of being part of the solution resonates throughout the company.

Besides using CO2 EOR to produce barrels of oil that are less carbon intense, Swetra spoke about the company’s investment in carbon capture, utilization and storage (CCUS) technologies, which the International Energy Agency said is key to reducing global emissions by 2040.

OLCV aims to bring more anthropogenic CO2 into its network, partnering with Canada’s Carbon Engineering Ltd. on direct air capture and sequestration, use CO2 a feedstock for low-carbon fuels working with Cemvita Factory, and diversify energy use, including renewables, he said. This includes a solar generation facility near Odessa, Texas, which started up Oct. 3, to power operations at a nearby EOR field.

“The project will reduce Occidental’s operating cost and the carbon intensity of its operations,” Swetra said. “It’ll cover 120 acres [and features] 174,000 PV [photovoltaic] modules.”

RELATED: Occidental Starts Up Solar Facility Directly Powering Permian Basin Operations

It is one of several efforts the company has undertaken. Others include partnering with NET Power LLC for natural gas electric power systems that generates no atmospheric emissions and captures CO2. A 50-MW demonstration plant is already operating in La Porte, Texas, and a 300-MW commercial scale plant in the Permian Basin is in the works.

The moves come as the world transitions toward cleaner energy sources such as natural gas, with many embracing renewables, amid a push to keep global warming below 2 C. The global shift has prompted some of the oil and gas industry’s biggest players to join the cause as they continue to meet the world’s oil and gas needs but with a lower carbon footprint.

Profitability is still at the forefront.

“I believe we all want to do the right thing when it comes to climate mitigation and energy transition,” Swetra said. “But for business, having good intentions does not equate to a profitable enterprise. For real concrete action, there needs to be a business case.”

Shell Powers Up

Royal Dutch Shell is also working to fulfill low-carbon strategies, having already prioritized its gas business—viewed as the cleaner fossil fuel. The company, also a member of OGCI, aims to reduce the carbon intensity of its energy products—including those it sells—by about 20% by 2035 and 50% by 2050.

“We see natural gas as the key transition fuel both domestically and as LNG around the world,” Jason Klein, vice president of energy transitions for Shell, said during the forum. “When burned for power, natural gas has about half the greenhouse gas emissions than coal. So, when we look at the developing world, where most of the demand growth is going to come from, we see the ability to provide LNG and natural gas to offset coal and also to complement the intermittency of renewables.”

Shell, which has a CCS facility in Canada that has captured and stored 4 million tonnes of CO2, also aims to invest up to $2 billion to $3 billion annually in its emerging power business.

In recent years, it has acquired MP2 Energy LLC, a power provider based in The Woodlands, Texas, and a stake in Nashville-based Silicon Ranch Corp., which owns and develops solar plants. Earlier this year, Shell acquired Greenlots, an electric vehicle charging and energy software company in California; and sonnen, a German manufacturer of smart residential storage system for solar energy.

“We’ve also started building out some hydrogen infrastructure in California. So, we’ve been acquiring a lot of the pieces of the puzzle in the power business,” said Klein, who gave the opening keynote in a chat with the Baker Institute’s Kenneth Medlock III. “And here in North America, Shell…has been one of the top three gas and power traders in the wholesale markets for a long time. We’re building the tools and the platforms to kind of evolve the power system.”

Oil, Gas Maintain Role

The power moves don’t mean Shell has cast aside what it is most known for: a global producer of oil and gas.

“To be clear, there is a role for oil and gas for many, many years to come to address even in a net zero scenario. That’s commercial aviation, long distance freight, shipping petrochemicals, steel, cement,” Klein said.

“And to the extent that people continue to need oil and gas, Shell is going to continue to provide it,” he added. “But we see that the global demand for energy in different forms is evolving and will continue to evolve at different paces in different parts of the world, and we intend to evolve with it.”

Mark Finley, a fellow in energy and global oil for the Center for Energy Studies’ Baker Institute, also shared thoughts on the continuing need for oil and gas while speaking in a different panel.

“Even in scenarios for the future that are successful in dealing with the challenge of reducing CO2 emissions, there is still a big role to play for fossil fuels. In fact, the International Energy Agency’s sustainable development scenario, which is fully consistent with meeting the Paris climate objective, has fossil fuels contributing the majority of the world’s energy in 2040.”

What does that mean for investment?

“Given the underlying decline rates of the production base of the world’s oil and natural gas system, even in a scenario that is consistent with meeting the Paris objective, trillions of dollars of new investment are required in the future production of oil and gas in addition to the trillions of dollars of investment that will be needed in new energy forms and efficiency, etc.,” he added.

Still, there are risks associated with a world more reliant on renewables.

Finley, as well as other panelists, pointed out that oil—unlike solar and wind—has been a major part of the energy mix for a while, and producers and other industry players have learned how to deal with risks associated with oil and gas. He mentioned strategic stockpiles and spare capacity as well as infrastructure as examples.

“As we embark on an energy transition, growing renewables is great for reducing oil vulnerabilities to the extent they back oil out of the world’s energy system,” Finley said, “but they run the risk of potentially introducing new vulnerability.”