Oxy Forms New Company To Pull Carbon Dioxide From the Air
Oxy Low Carbon Ventures and Rusheen Capital Management have formed a development company to finance the world’s largest carbon-dioxide-capturing facility using Carbon Engineering’s direct air capture technology.
Oxy Low Carbon Ventures, a subsidiary of Occidental, and Rusheen Capital Management, a private equity firm, have formed a development company, 1PointFive, to finance and deploy Carbon Engineering’s large-scale direct air capture (DAC) technology. 1PointFive and Carbon Engineering have signed a licensing agreement enabling the commercial development of the world’s largest DAC facility, a first step toward their aspiration to deliver this technology on an industrial scale throughout the United States.
1PointFive’s mission is to reduce the amount of carbon dioxide (CO2) in the atmosphere using Carbon Engineering’s DAC technology. This technology provides a pathway to bolster Paris Agreement-aligned efforts aimed at limiting increases in global temperature to 1.5°C. In 2018, the Intergovernmental Panel on Climate Change (IPCC) issued a report indicating that, in addition to significant emissions reductions, removing atmospheric CO2 is necessary to attain the 1.5°C goal.
“The formation of 1PointFive is a significant catalyst that will advance our plans to build the world’s largest-scale DAC facility to remove substantial volumes of carbon dioxide emissions from the atmosphere,” said Richard Jackson, Oxy Low Carbon Ventures president and chairman of 1PointFive. “Occidental has over 40 years of carbon dioxide management experience, and Oxy Low Carbon Ventures is applying our technical ingenuity and engineering skill to help make large-scale DAC facilities a reality.”
As announced in May 2019, the engineering and design for the first facility to be built through this agreement is already under way. The companies recently released a first look at the design of the plant, which, when operational, will be the largest DAC plant in the world, capturing up to 1 million metric tons of atmospheric CO2 annually. Currently, the world’s largest individual DAC facilities have the capacity to capture several thousand tons of CO2 per year.
The facility will be in the Permian Basin with a land footprint of approximately 100 acres. More than 25,000 hours of Carbon Engineering, Oxy Low Carbon Ventures, and contractor time has been completed on the design and development work so far. The final front-end engineering design for the facility is slated to begin in the first quarter of 2021, with construction expected to start in 2022.
The CO2 captured at the facility will be permanently stored deep underground in geological formations by Occidental. It will be used in lower-carbon oil production, which permanently stores CO2 as part of the process, and for geologic sequestration to deliver permanent carbon removal, a solution to counteract hard-to-eliminate emissions and help businesses achieve net-zero targets. With DAC, atmospheric CO2 can also be used as a feedstock to create low-carbon products such as plastics and concrete.
Occidental has been permanently storing CO2 for more than 40 years, with nearly 20 million metric tons sequestered in its operations annually. The company has two US Environmental Protection Agency-approved monitoring, reporting, and verification plans to validate the integrity, transparency, and permanence of the entire sequestration process. Occidental’s contributions to the venture include engineering, project development, and other technology performance assistance that will provide support for the development and financing of the DAC plant.
“The Carbon Engineering business model is to license our technology to developers around the world to enable rapid and widespread global deployment of DAC technology,” said Steve Oldham, Carbon Engineering’s chief executive officer. “This partnership marks Carbon Engineering’s first licensing agreement in the US and is a critical next step in the commercialization of DAC technology. It will prove the technology at large, climate-relevant scale, validate the cost, and demonstrate that DAC is now a feasible, available, and affordable tool that can be added to the global climate toolkit.”
The agreement between 1PointFive and Carbon Engineering, as well as the partnership’s first commercial facility, is enabled by effective market-based policies in the US, such as the California Low Carbon Fuel Standard and Federal 45Q tax credit. The continuity and growth of practical carbon-related policies will continue to encourage the establishment of a widespread DAC industry.
“We have an ambitious goal for 1PointFive—to help the world limit global temperature rise to 1.5°—but we also have a powerful and practical vision for what needs to be done,” said Jim McDermott, 1PointFive’s chief executive officer and founder and managing partner of Rusheen Capital Management. “Assessments by major organizations such as the IPCC and the National Academy of Sciences are increasingly clear that, to avoid the dangerous impacts of climate change, we will need to remove billions of tons of CO2 from the atmosphere. A global DAC industry will be key to achieving this. It will also bring significant economic benefits, leading to the development of new industries and thousands of jobs.”