Oil and gas company Occidental Petroleum's agreement to buy a Canadian carbon capture provider for $1.1 billion has cleared the way for the firm to build the nation's largest plant to pull greenhouse gases from the air and offset the effects of climate change from its own energy production.
The Houston-based oil and gas provider plans to acquire Carbon Engineering Ltd., a developer of direct air capture technology aimed at eliminating carbon dioxide. The deal is expected to close by the end of the year if approved by U.S. and Canadian regulators.
The Stratos plant, under development about 250 miles east of El Paso, Texas, in Ector County is being developed by Occidental's subsidiary, 1PointFive, and the plant is expected to be up and running in mid-2025 and is part of a partnership between the companies that began in 2019. 1PointFive reportedly plans to build 100 direct air capture plants around the world by 2035, projects it said could help curb the forecast rise of global temperatures by 1.5 degrees Celsius between now and 2050.
Occidental President and CEO Vicki Hollub said in a statement that the partnership adds "new revenue streams in the form of technology licensing and royalties," while the deal also lets the companies accelerate plans to build enough plants around the world to affect climate change and make direct air capture "the preferred solution for businesses seeking to remove their hard-to-abate emissions.”
Occidental and 1PointFive plan to use the facility, to be located about 35 miles west of Odessa, Texas, to capture 500,000 tonnes of carbon dioxide annually, equivalent to more emissions than from 111,000 gasoline-powered vehicles driven in a year, or 56 million gallons of gasoline consumed, the EPA said.
Ector County is part of the Midland-Odessa region of West Texas’s Permian Basin, one of the continent's largest sources of oil and gas. Occidental has about 2.8 million acres of land in the Permian Basin, an area that reaches into Southeastern New Mexico. The greater Permian Basin, according to the Railroad Commission of Texas, is responsible for 40 percent of all oil production in the United States.
An Occidental spokesperson said the oil-and-gas company acquired Carbon Engineering to help 1PointFive deploy direct air capture technology as a “large-scale, cost-effective, global carbon removal solution.”
Carbon Engineering, based in Squamish, British Columbia, Canada, would become a subsidiary of Oxy Low Carbon Ventures, once the $1.1 billion deal closes. The Canadian company’s employees would work with Occidental and 1PointFive to bring direct air capture technology to the market. Carbon Engineering’s staff are expected to remain at the company’s Squamish office.