Good morning, here's what the Oilman has for you today:

• Oxy Gets Microsoft as Client for Its Carbon Captur …

• EIA Sees U.S. Power Demand at Record High

• Tweet of the Day

Oxy Gets Microsoft as Client for Its Carbon Capture Venture

Occidental Petroleum has signed Microsoft on as a client.

The oil company will suck CO2 out of the air and sell the proof to the Big Tech giant.

Welcome to the wonderful world of carbon capture.

Ahead of the crowd

Oxy made a lot of people angry last year when it got some IRA money to build carbon capture capacity.

The oil driller is betting on so-called direct air capture.

It does exactly what it says on the tin, using huge fans to suck carbon dioxide out of the air.

Microsoft needs a lot of CO2 sucking because its emissions are rising.

Because of AI, of course.

So it will now be paying Oxy to suck half a million tons annually.

That would be half a million tons less CO2 on Microsoft’s books.

It’s funny neither company says anything about the financial side of the deal.

It must be quite large because DAC is expensive.

But needs must, and Microsoft has pledged to be carbon-negative by 2030.

Good thinking on Oxy’s part – carbon removal credits are going to be in great demand.

Whether or not they make a difference in emissions is irrelevant.

It’s good business, that’s all

That’s been a staple of the energy transition.

Creating demand where there was none.

Direct air capture is the perfect example.

It’s super expensive tech. Some say it’s so expensive it makes no sense.

But if there’s demand…

There will be a supply.

Oxy is supplying.

EIA Sees U.S. Power Demand at Record High

U.S. electricity consumption is set to hit a record this year.

And then break that record in 2025.

That’s according to the EIA, which explains the record with AI and climate change.

Of course.

Too much consumption, too little reliable power

Per the EIA’s Short-Term Energy Outlook, demand from households and businesses will actually decline.

But demand from industrial consumers will rise.

There’s that AI everyone’s been talking about—and gas producers have fallen in love with.

Because AI needs a stable power supply.

The EIA seems to think this supply could come from wind and solar.

No, seriously, it says the share of gas in total generation will decline this year.

And next year, as well.

Coal generation, for some reason, will remain stable, though.

But only this year. Next year it’s going to fall, too, as wind and solar rise.

Who had blackouts on their bingo card for 2025?

Because that’s exactly what’s going to happen if gas and coal decline.

So many warnings, so little heeding

The EIA used to be a reliable source of information.

Once upon a time.

Now, it’s increasingly turning into the IEA—a champion of the transition.

With zero regard for realities.

NERC and FERC have been banging the drum of declining power supply reliability for two years ago.

But did anyone listen?

Not at the EIA.

So they keep forecasting stuff that just can’t work.

However, it may push investors away from new gas generation capacity.

And it may speed up the retirement of coal plants we need.

Now, that would prompt a “transition,” all right.

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