The U.S. oil and gas sector has defied the odds for over a decade—unlocking shale, scaling production, and securing global energy influence. But that growth engine may be running out of steam. According to Occidental Petroleum CEO Vicki Hollub, unless the industry embraces artificial intelligence and carbon capture technologies on a larger scale, domestic oil output could hit a production plateau as early as 2027.
Speaking at the Edison Electric Institute (EEI) annual conference this week, Hollub laid out a stark reality: traditional methods of boosting output are no longer sufficient. The next leap in production—and energy leadership—will come from digital innovation and low-carbon solutions.
“Whether the CO₂ comes from industrial processors or the air, we need to use it,” Hollub said. “Technologies like carbon capture and AI will determine whether we stagnate—or surge forward.”
The New Frontier: AI Beneath the Salt Domes
One of the most compelling insights from Hollub’s presentation centered on untapped reserves hidden beneath salt domes in the Gulf of Mexico. These formations have long stumped geologists due to their complexity and poor imaging returns with conventional seismic tools.
AI, Hollub believes, could be the key to unlocking those reserves.
“If we can increase production by just 20%, it would be the equivalent of Saudi Arabia’s current volume,” she told the audience.
Carbon Capture Is Not Just ESG—It’s a Business Model
Occidental isn’t just capturing carbon for its 2050 net-zero targets. It’s monetizing CO₂ by using it in enhanced oil recovery (EOR), injecting it into aging wells to boost output from reservoirs that can’t be accessed with traditional drilling techniques.
Their Direct Air Capture (DAC) facility is a flagship in this strategy—designed to remove atmospheric CO₂ and redeploy it into productive assets. This isn’t theory—it’s a cornerstone of Occidental’s next phase of growth.
Powering Oil’s Digital Transformation
All of this innovation—AI, DAC, lithium extraction, carbon-to-chemicals—comes with one major constraint: power.
“We already have a hard time staying ahead with generation in places like Texas and New Mexico,” Hollub said, referring to the Permian Basin. “Going forward we will have increasing needs for energy—as well as AI.”
As more upstream operations become electrified and digitalized, the oilpatch’s dependence on reliable electricity will only intensify. Hollub emphasized the need for greater collaboration between utilities and oil producers, especially in regions facing grid strain.
Diversifying for the Energy Transition
Hollub’s remarks also reflect Occidental’s broader pivot toward energy diversification. The company is:
- Experimenting with lithium extraction from geothermal brines to support battery markets.
- Developing bioethylene from captured CO₂—a potential low-carbon alternative for the chemicals sector.
- Advocating for nuclear power and even exploring fusion as part of a long-term, carbon-conscious energy mix.
Final Thought: Energy Dominance or Decline?
Hollub’s vision is bold—and pragmatic. She isn’t calling for a stop to drilling or a rush to green energy. She’s outlining a hybrid path where carbon-intensive industries evolve, using technology to stay competitive while reducing their environmental footprint.
The takeaway is clear: the U.S. oil industry must invest now in AI, carbon capture, and clean energy infrastructure—or risk falling behind.
“We need to do carbon capture on a larger scale,” Hollub concluded. “We need to lower the cost, make that technology more efficient, and diversify the grid.”
Want to track companies investing in carbon capture, AI, and enhanced recovery in the Permian Basin?
Subscribe to the Oilgasleads Weekly Report for insights, operator data, and project intelligence that help service companies close more deals in this evolving market.
