It looks like Occidental’s big carbon capture and storage (CCS) plan is being made a reality thanks to major funding from the Department of Energy (DoE), showing an increasing trend for CCS financing in the U.S. Earlier this year, U.S. oil and gas company Occidental Petroleum Corporation (OXY) announced big decarbonisation plans to ensure it could continue with its oil production while adhering to green transition expectations for as long as possible. The firm has now received major funding from the DoE to develop its massive direct air capture technology.
The DoE has decided to invest up to $1.2 billion in direct air capture (DAC) technology, an industry that is underdeveloped at present and needs scaling up to put the technology into commercial use. The funding comes from the Bipartisan Infrastructure Law and will go towards two projects, one by Battelle in Louisiana and one by OXY in Texas. The hope is that the systems will eventually remove more CO2 from the air than all current CCS operations combined. The projects will be the first two commercial-scale DAC operations in the U.S.
Jennifer Granholm, the DoE Secretary, stated, “Once they’re up and running these hubs are expected to remove more than 2 million metric tons of carbon dioxide from the atmosphere every year, which is like taking nearly half a million gas-powered cars off the road.”
Occidental’s operations will be developed on 106,000 acres of leased land, south of Corpus Christi. The firm’s CEO Vicki Hollub believes the hub will be able to remove up to 30 million tonnes metric tons of CO2every year using DAC technology once fully operational. OXY will use a huge structure of fans to suck carbon directly from the air. The carbon will then be pumped thousands of feet underground into geological formations, where it can remain for hundreds of years. The company announced in April that it would be investing over $1 billion to develop the first of its plants to be fitted with this technology. Occidental hopes to capture 500,000 metric tonnes of CO2 annually with its DAC system, equivalent to the emissions from around 111,000 cars. Its first plant is expected to launch in 2024, followed by up to 135 more plants using the technology.
There are currently around 18 DAC plants worldwide, in Europe, the U.S. and Canada, capturing around 0.01?Mt?CO2/year. But to achieve net-zero carbon emissions by 2050, the technology needs to be scaled up rapidly for commercial use. Enough DAC-enabled plants to capture almost 60 Mt?CO2/year would need to be developed to be on track to achieving decarbonisation goals. But, to date, many energy firms have avoided using this kind of technology due to the uncertainty of its success on a commercial scale. Many scientists and energy experts remain sceptical of the technology, as they wait and see whether OXY will be able to utilise the giant vacuum successfully.
In Louisiana, the U.S. non-profit Battelle plans to use DAC technology developed by Swiss-based Climeworks and Heirloom. Climeworks currently owns the biggest DAC facility in the world, located in Iceland and removes around 4,000 tonnes of carbon each year. Andrew Fishbein, the senior climate policy manager for Climeworks, explained “We have to scale up in the next 20 years at the same pace that the solar and wind industries have done in the past two decades, which they did with strategic and forward-looking policies. The DAC Hubs program is a vital investment for DAC to reach climate impact at scale.” Heirloom, a start-up based in California, uses limestone to remove CO2 from the air, with a current backing of $54 million. Battelle is also partnering with Gulf Coast Sequestration to manage the storage of the carbon underground.
Battelle’s Project Cypress DAC Hub will provide thousands of jobs to the local community and help to advance Louisiana’s green technology capabilities, according to the firm. Battelle Energy and Resilience Division Manager Shawn Bennett stated, “Direct Air Capture technology is an important bridge to a future that greatly reduces the amount of legacy carbon dioxide in our atmosphere. But in addition to that, Project Cypress will be developed to the benefit of the local community, maximizing local job opportunities for the energy transition.” The company expects to help transform Louisiana from a fossil-fuel-dominant region to a green energy hub, using the knowledge and skills of the existing workforce to support this development.
Further funding for DAC technology is expected from the DoE next year, with the construction of two more hubs. The development of DAC facilities will be just one of the ways in which the government will support CCS, with additional funding designated for the construction of more conventional CCS systems across the country. For example, in August last year, the DoE announced it would be investing $31 million to advance carbon capture and storage for natural gas power and Industrial Sectors. And in October it announced further funding of $7 Billion for carbon capture, transport, and storage infrastructure.
By Felicity Bradstock for Oilprice.com
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