Occidental is the industry leader in using CO₂ to enable low-cost EOR, which can facilitate oil recovery, while at the same time sequestering the CO₂ in the reservoir. Pairing DAC with CO2 sequestration in EOR operations is a significant step forward for the energy industry, as it provides a mechanism designed to greatly reduce or fully eliminate the net addition of CO2 to the atmosphere from oil production and use.
“We are excited to partner with Carbon Engineering on the first Direct Air Capture facility in the Permian Basin, enabling us to enhance our leadership position in CO2 EOR,” said OLCV President Richard Jackson. “Using atmospheric CO2 for oil recovery greatly reduces the net addition of CO2 to the atmosphere from oil production and fuel use, and opens a pathway to producing fully carbon-neutral or even net-negative fuels.”
“Climate experts tell us that, alongside other mitigation solutions, carbon removal technologies like DAC are going to be essential if we hope to decarbonize in time to avoid the worst impacts of climate change,” said Steve Oldham, CEO of CE. “These carbon removal technologies need to be deployed widely and at large enough scales to be climate-relevant. This project – the largest DAC-sequestration plant in the world – is therefore a huge step forward in demonstrating the readiness of large-scale atmospheric carbon removal, and in accelerating efforts to bring global emissions down to net-zero, and eventually to net negative.”
The proposed project will start with one DAC plant that captures 500 kilotonnes of atmospheric CO2 per year and is expected to expand to include multiple DAC plants, each capable of capturing one megatonne of atmospheric CO2 annually. If the initial plant is approved by Occidental and Carbon Engineering, construction is expected to begin in 2021, with the plant becoming operational within approximately two years.
This announcement comes as market-based regulations like the Low Carbon Fuel Standards (LCFS) in California and other jurisdictions are being expanded to allow credit generation by DAC-sequestration projects. This facility will be designed to be eligible for both California’s LCFS credits and US federal 45Q tax credits, demonstrating that these effective market-based regulations result in positive benefits for the climate, local communities and the economy.
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About Oxy Low Carbon Ventures (OLCV):
Oxy Low Carbon Ventures, LLC (OLCV) is a subsidiary of Occidental, an international oil and gas exploration and production company with operations in the United States, Middle East and Latin America. Occidental’s global strategy includes active investment in carbon dioxide enhanced oil recovery (CO2-EOR) and carbon capture, utilization and storage (CCUS), as well as other emissions reducing technologies. OLCV capitalizes on Occidental’s EOR leadership by developing CCUS projects that source anthropogenic CO2 and promotes innovative technologies that drive cost efficiencies and economically grows Occidental's business while reducing emissions.
About Carbon Engineering (CE):
Founded in 2009, CE is a Canadian-based clean energy company leading the commercialization of groundbreaking DAC technology that captures CO₂ directly from the atmosphere, and a second technology that synthesizes it into clean, affordable transportation fuels. From a pilot plant in Squamish, B.C., CE has been removing CO₂ from the atmosphere since 2015 and converting it into fuels since 2017. CE is privately owned and is funded by investment or commitments from private investors and government agencies. CE’s investors include Bill Gates, Murray Edwards, Oxy Low Carbon Ventures, LLC, Chevron Technology Ventures, and BHP.
Portions of this press release contain forward-looking statements and involve risks and uncertainties, including those relating to the timing of construction and operations of the facility, the benefit of the facility to the participants, demand for DAC and other carbon removal technologies, future regulations, and market demands that impact the project. Actual results may differ from anticipated results, sometimes materially. Factors that could cause results to differ include, but are not limited to: global commodity pricing fluctuations; supply and demand considerations for carbon removal technologies; higher-than-expected costs; the regulatory environment; not successfully completing, or any material delay in, construction or completion of the facility; availability of funding, personnel and materials; litigation; actions by third parties, including partners; disruption or interruption of operations due to accidents or unforeseen factors; failures in risk management; and changes in laws, regulations or tax rates. Words such as “proposed,” “will,” “would,” “should,” “may,” “plan,” “believe,” “expect,” “designed to,” “target,” “effort” or similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Unless legally required, Occidental does not undertake any obligations to update any forward-looking statements, as a result of new information, future events or otherwise. Material risks that may affect results appear in Part I, Item 1A “Risk Factors” of Occidental’s Annual Report on Form 10-K for the year ended December 31, 2018, and in Occidental’s other filings with the SEC.
Carbon Engineering Ltd.:
Oxy Low Carbon Ventures, LLC: