In yet another bet on direct carbon capture (DAC), Houston-based Occidental has agreed to purchase a DAC technology company for $1.1 billion.
Occidental says its all-cash acquisition of Canada-based Carbon Engineering is set to close by the end of 2023. Carbon Engineering was founded in 2009.
Under the deal, Carbon Engineering would become a wholly owned subsidiary of Oxy Low Carbon Ventures, the investment arm of Occidental. Carbon Engineering employees will work with teams at Occidental and its low-carbon subsidiary, 1PointFive, on DAC technology. The company’s R&D and innovation units will remain in Squamish, British Columbia.
Occidental has been a key DAC partner of Carbon Engineering since 2019.
“We look forward to continuing our collaboration with the Carbon Engineering team, which has been a leader in pioneering and advancing DAC technology,” Vicki Hollub, president and CEO of Occidental, says in an August 15 news release. “Together, Occidental and Carbon Engineering can accelerate plans to globally deploy DAC technology at a climate-relevant scale and make DAC the preferred solution for businesses seeking to remove their hard-to-abate emissions.”
Billionaire Warren Buffett’s Berkshire Hathaway conglomerate owns about one-fourth of the shares of publicly traded Occidental.
In conjunction with Carbon Engineering, Occidental’s 1PointFive is building Stratos, the world’s largest DAC plant. The Ector County facility, scheduled to begin operating in mid-2025, is projected to extract up to 500,000 metric tons of carbon dioxide from the air each year. It’s anticipated that Stratos will employ more than 1,000 people during construction and up to 75 people once the plant is up and running.
Occidental and Carbon Engineering are adapting Stratos’ engineering and design features for a DAC plant to be built on a site at South Texas’ King Ranch. The South Texas DAC Hub, which is on track to create about 2,500 jobs, recently received a roughly $600 million grant from the U.S. Department of Energy (DOE).
1PointFive plans to open as many as 135 DAC facilities around the world by 2035, with the capacity to capture 100 million metric tons of carbon dioxide (CO2) per year.
DAC technology pulls carbon dioxide emissions from the atmosphere at any location and permanently stores the CO2 or uses it for other purposes. By contrast, carbon capture sucks carbon dioxide from the air near where emissions are generated and then permanently stores the CO2 or uses it for other purposes.
A DAC system vacuums about 50 percent to 60 percent of the carbon dioxide from the air that passes through the system’s fans.
DAC “is shaping up to be a key component of meeting net-zero emissions goals in the United States,” according to the National Renewable Energy Laboratory.