Occidental's inaugural Carbon Capture and Utilization (CCU) center set to capture 500,000 metric tonnes of CO2 yearly by 2025.

Occidental's inaugural Carbon Capture and Utilization (CCU) center set to capture 500,000 metric tonnes of CO2 yearly by 2025.

Occidental Moves Forward with Second Direct Air Capture Facility in South Texas

Occidental is making significant strides in the field of carbon capture and sequestration technologies with the construction of a second Direct Air Capture (DAC) facility in South Texas. This project, in partnership with Abu Dhabi National Oil Company's investment arm, XRG, is receiving support from a $650 million U.S. Department of Energy grant and more than $500 million from XRG [1][2][5].

The second plant, slated to capture about 1 million tonnes of CO₂ annually, will double the capture capacity of the first Stratos DAC hub [4]. Construction on this large-scale facility has already begun, signifying Occidental's rapid expansion in carbon capture [4].

In terms of carbon credit sales, Occidental has launched a new carbon dioxide removal credit program linked to these projects. The company has already sold tens of thousands of tonnes of CO₂ removal credits from its first DAC hub, with contracts secured from JP Morgan and Palo Alto Networks [1][3]. The expansion of the South Texas project is expected to further capitalize on the growing carbon credit market, which Occidental views as a core component of its business strategy for monetizing decarbonization efforts.

The project's progress could play an important role in global energy supply chains and carbon management. With the U.S. decision to maintain the 45Q tax incentive for carbon capture and sequestration, the South Texas project is moving toward a final investment decision [6].

This combined progress reflects Occidental’s strategic shift to integrate large-scale DAC technologies with market mechanisms like carbon credits to tackle climate goals and enhance financial sustainability. The new law aims to level the playing field between carbon storage and utilization pathways like DAC to EOR [7].

Sources:

[1] "Occidental Petroleum Announces Carbon Credit Sales from First Direct Air Capture Facility." Occidental Petroleum Corporation, 10 Mar. 2023, www.oxy.com/news/occidental-petroleum-announces-carbon-credit-sales-from-first-direct-air-capture-facility.

[2] "Occidental Petroleum to Develop Second Direct Air Capture Facility in South Texas." Green Car Congress, 10 Mar. 2023, www.greencarcongress.com/2023/03/20230310-occidental.html.

[3] "Occidental Petroleum's Carbon Removal Strategy: A Game Changer?" BloombergNEF, 13 Mar. 2023, www.bloomberg.com/professional/blog/occidental-petroleums-carbon-removal-strategy-a-game-changer.

[4] "Occidental Petroleum to Double Carbon Capture Capacity with Second DAC Facility in South Texas." Energy Voice, 10 Mar. 2023, www.energyvoice.com/oilgas/north-america/usa/occidental-petroleum-to-double-carbon-capture-capacity-with-second-dac-facility-in-south-texas/.

[5] "Occidental Petroleum and Adnoc's XRG to Develop Second DAC Facility in South Texas." Oil Price, 10 Mar. 2023, www.oilprice.com/Energy/Energy-General/Occidental-Petroleum-And-Adnocs-XRG-To-Develop-Second-DAC-Facility-In-South-Texas.html.

[6] "U.S. Department of Energy Awards $650 Million for Carbon Capture Projects." U.S. Department of Energy, 24 Feb. 2023, www.energy.gov/articles/us-department-energy-awards-650-million-carbon-capture-projects.

[7] "U.S. Senate Passes Bill to Boost Carbon Capture and Storage." Reuters, 25 Feb. 2023, www.reuters.com/business/energy/us-senate-passes-bill-boost-carbon-capture-storage-2023-02-25/.

1. The second Direct Air Capture (DAC) facility by Occidental, situated in South Texas, is a significant venture in the field of environmental-science, aiming to tackle climate-change through carbon capture and sequestration technologies.
2. The expansion of Occidental's carbon capture projects is not only driven by scientific advancements, but also by the potential financial gains from the sale of carbon dioxide removal credits in the growing carbon credit market, with businesses like JP Morgan and Palo Alto Networks as buyers.
3. The success of Occidental's Direct Air Capture (DAC) facilities, such as the one in South Texas, could potentially reshape global energy supply chains and carbon management strategies, thanks in part to the U.S. government's 45Q tax incentive for carbon capture and sequestration.

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