Inside a company’s bid to make Alaska’s next big oil field lower-carbon • Alaska

But Santos’ climate plan at Pikka, its first Alaska development, stands out as the highest-profile effort by a company to build a lower-carbon oil field on the North Slope — and, longer term, to address climate change through large-scale carbon capture. 

In a state where elected leaders largely dismiss the need to reduce carbon emissions, it’s a different approach from Alaska’s established oil industry players — one that’s more aligned with European giants like BP and Shell, which face stringent government climate regulations and have invested billions in renewable energy.   

“It’s clear these companies know which way the wind’s blowing — not just in terms of public perception and their social license to operate, but also in terms of the political economy of oil,” said Philip Wight, a historian at University of Alaska Fairbanks who studies Alaska’s energy industry. 

With global economies pushing toward reduced emissions, some analysts warn that companies that don’t follow Santos’ example could be taking on financial risk. 

Capture, storage and offset projects could help Alaska’s oil and gas industry survive in a lower-carbon future, according to Mark Foster, a financial analyst and former utility regulator based in Anchorage. 

But those proposals remain fraught, Foster added, because of lingering uncertainty around their cost and performance. 

Skeptics of the nascent carbon capture industry say that ending the use of fossil fuels entirely — not prolonging their extraction and combustion with new technology — is the best way to mitigate climate change. Santos itself has been the subject of allegations of greenwashing in an Australian court over some of its climate-related claims. 

The company’s target to make Pikka “net-zero” by 2026 applies only to the emissions generated by Santos in the process of producing oil in the Arctic. The pledge doesn’t apply to the far larger volumes of carbon emitted by consumers who will burn the 80,000 barrels of oil that the company plans to pump each day. 

But the company could theoretically offset its consumers’ — and other companies’ —  emissions, too, with another new technology called direct air capture. 

That idea, which has gained traction in the oil industry and among some scientists, calls for stripping carbon dioxide straight from the atmosphere and depositing it underground for storage. 

With a new grant from the Biden administration, Santos and two partners are poised to be the first to study whether direct air capture could work in Alaska.

A hub in the Arctic?

Santos is still years away from capturing carbon in large quantities and injecting it back under the Arctic tundra. 

But, in presentations to policymakers, the company has outlined its rough idea. 

Santos’ North Slope hub could collect carbon in two ways. 

It could pull the greenhouse gas directly from the air. And it could trap carbon emitted from oil field “point sources,” like power plants.

A sketch of the concept shared with policymakers shows an industrial network of carbon injection wells; pipelines; a direct air capture plant; and power plants fueled either by natural gas or a small nuclear reactor.