Occidental Petroleum Corp. President and CEO Vicki Hollub criticized major banks for not playing more of a role in the carbon capture, storage and utilization space.

Occidental injects captured carbon dioxide into oil wells to extract more hydrocarbons than traditional drilling techniques can access through a process known as enhanced oil recovery. Companies may only be able to recover 25% of hydrocarbons from a source, but enhanced oil recovery can greatly help to drive out more fuel, reaching more than 70% of hydrocarbons, the CEO said during a March 22 discussion.

"If we could get the bigger banks investing in things that will make this much difference in the world ... we could really advance this a lot faster," Hollub said on a webinar hosted by Columbia University's Center on Global Energy Policy. "The more places that we apply CO2 enhanced oil recovery, the greater the recovery from existing reservoirs. The more you can recover from existing reservoirs, the less expensive that is, so it lowers the cost for consumers, helps the economy, and it prevents us from needing to go into places to develop new sources of oil and gas."

A project finance attorney noted that large banks have shown an interest in the space. Ellen Friedman, a partner and co-head of Nixon Peabody LLP's energy and infrastructure projects team, said her firm has discussed carbon capture investment opportunities with major banking institutions. Some of the largest national banks are "rolling up their sleeves and trying to make structures that work for them and to get things through their credit committees," Friedman said.

Doing so helps position these institutions to "approve investments as they mature to the point that they could actually propose them to their investment committee," Friedman said. "It's definitely in-process."

Carbon capture advocates have called for additional policy frameworks to offer investment certainty in carbon capture technologies' deployment, noting that such investment could help drive down the cost to capture each ton of carbon dioxide to a commercially viable level.

Given the multibillion-dollar price tag associated with some carbon capture projects, investors will look closely at the sector's risks, Friedman said. Bigger and additional demonstration projects could help reduce technological risks, but the investment community may need assurances on the long-term liabilities tied to geologic storage sites, she noted. Additionally, investors have asked the Internal Revenue Service for additional guidance clarifying how to invest in the space.