Carbon capture and storage

US DOE Awards Up to $1.2 Billion for Pair of DAC Projects

The projects are expected to remove more than 2 million metric tons of CO2 emissions annually from the atmosphere.

A rendering of Oxy's Permian Basin direct air capture plant to begin construction by the end of next year.
Carbon Engineering

The US Department of Energy (DOE) awarded up to $1.2 billion in federal grants for projects to remove more than 2 million mtpa of CO2 emissions annually in Texas and Louisiana. This major step forward will facilitate the scaling up of direct air capture (DAC) technology.

The selected projects include Project Cypress in Louisiana—led by Battelle, Climeworks Corp., and Heirloom Carbon Technologies—and the South Texas DAC Hub in Kleberg County, Texas, proposed by Occidental Petroleum's subsidiary 1PointFive, in collaboration with Carbon Engineering and Worley.

The DOE said the two projects are expected to remove more than 2 million mtpa of CO2 emissions from the atmosphere—equivalent to the annual emissions from roughly 445,000 gasoline-powered cars—and create 4,800 good-paying jobs in Texas and Louisiana.

In addition to these grants, the DOE also launched initiatives to reduce DAC technology's cost to less than $100 per net metric ton of CO2-equivalent by the end of this decade. These initiatives include a $35-million government procurement program for carbon removal credits and funding for feasibility studies and engineering and design studies for earlier-stage hub projects.

DAC technology operates by using chemical reactions to extract CO2 from the air. The captured carbon can then be stored underground or utilized in various applications. According to the DOE, once deployed at scale, DAC technology can play a vital role in helping the US achieve its goal of neutralizing greenhouse gas emissions by 2050.

The grants, subject to negotiations before disbursement, are the first made by the DOE following the allocation of $3.5 billion from Congress for regional DAC hubs through the bipartisan infrastructure bill.

Project Cypress Hub

The Project Cypress DAC Hub is planned for southwest Louisiana. It is designed to advance the commercialization of DAC and storage powered by renewable energy that will verifiably remove CO2 from the atmosphere, store it safely underground, and generate manufacturing jobs in the US to further the country’s climate goals, according to a release.

“Project Cypress is precisely the kind of program that brings together the many facets of work we do at Battelle,” said Matt Vaughan, Battelle executive vice president of applied science and technology. “Our expertise in large-project management and carbon sequestration during the past 2 decades positioned us to lead this once-in-a-generation opportunity.”

Notification of Selection from the DOE indicates the project can proceed with negotiations leading to an award. Battelle is the prime contractor on the project, with kickoff planned for late 2023.

Gulf Coast Sequestration, a Louisiana-based company, is partnering with Project Cypress to sequester captured CO2. It is in the advanced stages of obtaining Class VI well approval from the US Environmental Protection Agency.

South Texas DAC Hub

The South Texas DAC Hub will be located on the King Ranch in Kleberg County and is expected to include the world’s first DAC plant designed to remove up to 1 million mtpa of CO2.

1PointFive’s lease agreement for the South Texas DAC Hub with the King Ranch covers about 106,000 acres of pore space estimated to accommodate up to 3 billion metric tons of CO2 in saline formations. It is located near industrial emitters on the Texas Gulf Coast, where CO2 also can be captured, transported, and securely sequestered at the hub. Additionally, the hub can potentially remove and store up to 30 million mtpa of CO2 through DAC.

“We appreciate the US Department of Energy’s leadership to advance direct air capture and look forward to our partnership to deploy this vital carbon removal technology at a climate-relevant scale and establish the US and 1PointFive as global leaders in demonstrating the commercial viability of DAC,” said President and CEO Vicki Hollub. “We believe this selection validates our readiness, technical maturity, and ability to use Oxy’s expertise in large projects and carbon management to move the technology forward to reach its full potential.”

The project partners are working on the front-end engineering and design for the first DAC plant slated for the South Texas Hub. The design is being adapted from Stratos, 1PointFive’s first commercial-scale DAC plant under construction in the Permian Basin. The company said that preparations are underway to drill test wells at the South Texas Hub site to gather the geologic data required to obtain a Class VI well permit to sequester CO2.