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Occidental Hopes to Sell the Carbon It Captures at the World’s Biggest Plant

(Bloomberg) —

When Occidental Petroleum Corp. opens the world’s biggest plant for sucking carbon dioxide out of the sky in two years, the oil giant hopes to sell the captured carbon for the manufacturing of a number of products including plastic and synthetic fuel.

At a groundbreaking ceremony Friday deep in the heart of the Permian Basin, Chief Executive Officer Vicki Hollub unveiled the name of the $1.1 billion plant as Stratos. By the time it’s commercially operating in 2025, the 64-acre site will capture 500,000 tons of carbon dioxide annually. 

In addition to sequestering the carbon for the sale of carbon offsets and using it to push out more oil in a process known as enhanced oil recovery, the plant will have a third business use, said Richard Jackson, head of Occidental’s US onshore resources and carbon management.

“What we’re trying to create is a utility of CO2,” Jackson said at the plant’s construction site about an hour west of Odessa, near Notrees, Texas. “There are many, many products we think can consume CO2 and create a true net-zero product we think will be marketable and important.”

Occidental has a goal to build 100 of the direct-air-capture plants by 2035, with future locations to pull about 1 million tons of carbon dioxide annually. A successful build-out is crucial not just for Occidental’s energy-transition strategy but also to demonstrate pulling carbon dioxide directly from the atmosphere is a viable business model. 

“This first facility will not just be a milestone in size, but a cornerstone of learning, informing how we optimize direct air capture plants going forward,” said Michael Avery, president of 1PointFive, a unit of Occidental that’s developing the plant.

(Updates with comment from executive in final paragraph. An earlier version corrected the opening year.)

–With assistance from Kevin Crowley.

© 2023 Bloomberg L.P.


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