Oxy's cleantech arm scores Amazon DAC investment

carbon capture client

Amazon has agreed to buy 250,000 metric tons of carbon removal credits from 1PointFive’s first DAC plant. Photo via 1pointfive.com

Houston-based cleantech company 1PointFive is among the recipients of e-commerce giant Amazon’s first investments in carbon-fighting direct air capture (DAC).

Amazon has agreed to buy 250,000 metric tons of carbon removal credits from Stratos, 1PointFive’s first DAC plant, over a 10-year span. That commitment is equivalent to the amount of carbon stored naturally across more than 290,000 acres of U.S. forecasts, says Amazon.

Financial terms of the deal weren’t disclosed.

1PointFive is a carbon capture, utilization, and sequestration (CCUS) subsidiary of Houston-based energy company Occidental Petroleum.

The carbon captured for Amazon will be stored deep underground in saline aquifers — large geological rock formations that are saturated in saltwater.

As Amazon explains, DAC technology filters CO2 from the atmosphere and stores it in underground geological formations. Aside from being stored, removed carbon can be used to make building materials like bricks, cement, and concrete.

1PointFive is constructing its first DAC plant in Ector County, which is anchored by Odessa. The facility is expected to be the world’s largest DAC plant, capturing up to 500,000 tons of CO2 per year. Amazon Web Services (AWS) will provide real-time performance data for the plant.

“Amazon’s purchase and long-term contract represent a significant commitment to direct air capture as a vital carbon removal solution,” Michael Avery, president and general manager of 1PointFive, says in a news release. “We are excited to collaborate with Amazon to help them achieve their sustainability goals.”

1PointFive broke ground on the Stratos plant in April. Its project partners include British Columbia-based Carbon Engineering and Australia-based Worley. The plant is expected to be fully operational by mid-2025.

1PointFive envisions establishing more than 100 DAC facilities around the world by 2035.

The Amazon deal isn’t the only major deal for 1Point5 this summer.

In August, the U.S. Department of Energy (DOE) announced a $600 million grant for a 1PointFive-operated DAC hub that will be built in South Texas. The more than 100,000-acre hub, comprising 30 individual DAC projects, eventually may remove and store up to 30 million metric tons of CO2 per year.

Also in August, Japan’s All Nippon Airways (ANA) said it reached an agreement with 1PointFive to buy 10,000 metric tons of carbon removal credits per year over a three-year period starting in 2025. The credits will be generated by 1PointFive’s Stratos plant.

In the U.S., DAC has gotten a huge boost from the federal government. The Inflation Reduction Act, passed in 2022, includes tax credits for capturing and storing carbon via DAC.

The International Energy Agency says 27 DAC plants have been commissioned around the world, with at least 130 more in the development stage. One forecast predicts the value of the global market for DAC systems will climb past $2.3 billion by 2030.

Occidental says its all-cash acquisition of Canada-based Carbon Engineering is set to close by the end of 2023. Photo via carbonengineering.com

Oxy acquires carbon capture co. in $1.1B deal

betting on dac

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.

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Energy giant Shell lists Houston HQ for sale for $325 million

asset offload

Energy giant Shell has put its U.S. headquarters in Houston’s Energy Corridor on the market and is exploring the sale of its U.S. chemical business.

Green Street News reported Shell just listed its longtime Energy Corridor campus at 150 N. Dairy Ashford Road. The asking price is $325 million, The Real Deal reported. Shell plans to lease back half of the nearly 1.5 million-square-foot Woodcreek campus for 15 years.

A sale-leaseback deal could transform the 43.6-acre campus into a multitenant hub, CoStar News reported.

“Houston is a critical hub for Shell globally and the headquarters of our U.S. businesses,” a Shell spokesperson told the Houston Business Journal. “We remain committed to Houston and are evaluating opportunities to optimize our Woodcreek campus as part of our ongoing review of workplace needs while maintaining a strong presence in the city.”

Shell occupied its first building at the West Houston campus in 1980. The company employs more than 6,000 people in Texas.

Shell is one of the highest-profile businesses occupying space in the Energy Corridor. It’s home to 67,000 workers, more than 27 million square feet of office and mixed-use space, and 3.8 million square feet of retail and restaurant space.

Shell considers $8B sale of chemical business

As the company seeks to unload its Woodcreek campus, The Financial Times reported Shell is looking into selling its U.S. chemical business. The price tag: $8 billion.

Potential buyers include Spring-based ExxonMobil and Houston-based LyondellBasell.

Shell operates four chemical plants in Texas, Louisiana and Pennsylvania, producing an array of chemicals for use in plastics, detergents and pharmaceuticals.

Shell CEO Wael Sawan said last year that the company had spent $45 billion in capital “that is underperforming for us,” split between its chemical business and renewable energy arm.

Shell also agreed to sell its solar and wind power business in India this summer. Read more here.

Trump continues to champion data center growth despite rising voter concerns

Data Development

President Donald Trump, speaking alongside cryptocurrency leaders at the White House, made a statement that Republican and Democratic candidates alike wouldn't touch.

“If I were the mayor of a town or the governor of a state, and I had a chance to get a big plant in, an AI plant or a data center,” Trump said, “I would absolutely want it because the jobs are enormous and the money paid, the taxes paid, are just enormous.”

It's not the kind of message anyone is using in competitive midterm races.

The race to build data centers, which power artificial intelligence and cloud computing, has run aground amid frustration from voters who don't want to live near the massive warehouse campuses. Even the Senate Republicans' campaign arm warned that anger over data centers — some of which dwarf football stadiums and use more energy than small cities — could cost them a seat.

Opposition stretches across the political spectrum because of fears that the behemoths will jack up electricity bills, drain people's water wells, create unhealthy amounts of air and noise pollution and forever change a community's character — all while getting lucrative tax breaks from states competing for their business.

Trump has framed data centers as a necessary component of a top national and economic security priority: winning the AI race against China. However, he also has acknowledged concern over rising electricity bills, previously saying “it’s only fair” for the companies to shoulder their costs.

He also suggested this week that data centers need “a little public relations help.” In recent months, he has gotten tech giants to sign a voluntary pledge to shield U.S. consumers from higher utility bills from data centers, even as he pushes to streamline the process for companies and utilities to build their own power plants.

But building power plants doesn't happen overnight, and the immediate political reality for candidates across the country is far different.

“It is yet another dimension in which the White House appears tone deaf — tone deaf at best and indifferent to the interest of other Republican candidates at worst,” said James Henson, the director of the Texas Politics Project at the University of Texas, Austin, a nonpartisan research organization.

Republican committee issues warning over data centers in Ohio

Statewide candidates from Nevada to Pennsylvania, both Republican and Democratic, are weaponizing data centers against their opponents, and candidates who absorb those attacks are subsequently trying to distance themselves from them.

In Ohio, a data center hot spot with closely contested races for governor and U.S. Senate, the National Republican Senatorial Committee warned in a memo Tuesday that Sen. Jon Husted is vulnerable to losing his seat because of the centers.

Democratic nominee Sherrod Brown is airing attack ads against Husted that call him the “face of data centers in Ohio” as people gather signatures for a statewide referendum to ban their construction.

The Republican memo said it's been a “sleeper issue for the entire election cycle.”

“Brown is using it because it works,” the NRSC said. “More than any other thing in this race, data centers are the anchor hanging around Husted’s neck. If he loses and data centers get the blame, politicians across the country will take notice — and they will not go near the next one.”

The memo suggested voters may balk at Democratic candidates who want to stop data center construction altogether in favor of a Republican candidate who only wants data centers built if a community approves it in a local vote and it pays for its own power, water and other utilities.

Most registered voters oppose building a data center in their area, according to a July Fox News poll.

Still, the issue falls behind other voter concerns, such as cost of living, as November looms. A Quinnipiac Poll conducted in June asked voters what issues were important in deciding who to vote for in U.S. House elections, and about 4 in 10 mentioned AI data centers.

Trump’s statement already put to use in Nevada race

In Nevada, Democrat Aaron Ford quickly tied Trump’s statement to Republican Gov. Joe Lombardo, characterizing them as being in “lockstep on data centers.”

In a statement, Ford said Trump and Lombardo are “Nevada data centers’ biggest cheerleaders” who “only care about catering to their ‘billionaire friends’ while Nevadans pay the price.”

Ford this week unveiled a policy platform in which he said he would halt new state tax breaks for data centers — he estimated them at $200 million currently — while auditing existing projects to ensure they are delivering on promises. He also said he would ensure data centers pay for their electricity needs, do not deplete Nevada’s water supply and help local governments negotiate strong benefits agreements with developers.

Texas' governor changed course and got a jab from Trump

Texas Gov. Greg Abbott, who last November celebrated Google’s announcement of a $40 billion investment there by calling the state “the epicenter of AI development,” is under attack from his Democratic challenger, Gina Hinojosa, over his pursuit of data center development.

Abbott has since changed course by promising tougher action, such as removing the state’s sales tax exemption and holding up projects to review their energy usage.

Trump criticized the shift, saying “I think it's a mistake” in a recent interview with Punchbowl News.

Asked about Trump's support for data centers, Abbott's office said the governor's “top priority is to protect Texans’ safety and quality of life and ensure the integrity of our power grid and water supply.”

“Simply put, Texans must come first,” Abbott's office said.

Data centers complicated Wisconsin governor race

While Trump embraces data centers, even some of his allies are using them for political attacks. U.S. Rep. Tom Tiffany, running for Wisconsin governor, released a TV ad this week branding his Democratic opponent as “Data Center David Crowley.”

The ad includes a clip of Crowley saying Wisconsin could become the “AI and data hub not only for the entire country, but for the entire globe.”

Crowley has said local communities must have veto authority while also calling data centers a part of the modern economy that could bring significant economic benefits to the state.

Tiffany, who Trump has endorsed, has also said positive things about data centers. In January, Tiffany called data centers “exciting new technology,” in an interview with PBS Wisconsin. And last December, he voted for a bipartisan bill known as the SPEED Act, which is designed to accelerate construction of new AI infrastructure projects like data centers. It hasn't passed the Senate.

Neither Tiffany nor Crowley support a moratorium on new data center construction.

Tiffany has called for repealing the state tax incentive for data centers, while Crowley has not. They both have called for stricter regulation.

Crowley, at an event Wednesday where he received the endorsement of the environmental group Clean Wisconsin, downplayed the attacks Tiffany has made against his data center position.

“He’s getting very good at saying one thing and doing something different,” Crowley said, pointing to Tiffany’s votes in support of the SPEED Act.

“What Congressman Tom Tiffany’s doing is lying because he’s trying to run away from his record in Congress,” Crowley said.

Houston startup wins Space Force contract to advance quantum energy generator

quantum contract

Houston-based quantum energy technology startup Casimir Inc. has been awarded an STTR Phase I contract from the U.S. Space Force's SpaceWERX to support the development of the company's solid-state generator for potential use by the Department of the Air Force.

SpaceWERX is the innovation arm of the U.S. Space Force and a division within AFWERX, the incubator and innovation arm of the United States Department of the Air Force. The Air Force Research Laboratory and SpaceWERX, along with many other government agencies, help support innovation through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants and contracts.

As part of the new contract, Casimir will work to refine a fully independent generator. Casimir’s solid-state power technology could support national security missions by providing reliable power even in difficult-to-service environments.

In May, Casimir emerged from stealth, netting a $12 million seed round to commercialize its quantum energy chip. The semiconductor chips can generate power from quantum vacuum fields without the need for batteries or charging. The company aims to include the chips in large-scale energy systems that can power homes, commercial infrastructure and electric vehicles.

“This STTR funds some analysis work to address our proposed scaling approach of making our chips multi-layer to increase aggregate power,” Harold “Sonny” White, founder and CEO of Casimir, tells Energy Capital.

White adds that the company will work with Texas A&M to develop chip planarization techniques to support Casimir’s plans to scale. Additionally, White says the company is working with the U.S. Space Force to explore more applications for its technology.

“Casimir’s technology brings a new capability to the market in the form of our persistent power chips,” White adds. “This approach will be relevant to ultra-low-power electronics, and with the scaling approach we are developing, connected with the STTR work, will eventually be relevant to consumer electronics and beyond.”

Casimir has previously reported that it plans to commercialize its first-generation MicroSparc chip by 2028. The chips are expected to power devices for years without the need for replacements.

The total funding for this project has not yet been disclosed.