Occidental Petroleum Corp. has signed a deal to buy Canadian company Carbon Engineering Ltd. for US$1.1 billion. The Occidental Petroleum headquarters building is seen in Los Angeles on Jan.26, 2010. THE CANADIAN PRESS/AP/Reed Saxon
CALGARY – A Canadian company that is pioneering the use of direct air capture technology to remove carbon dioxide directly from the atmosphere has been acquired by U.S. oil company Occidental Petroleum.
The US$1.1-billion deal will see Squamish, B.C.-based Carbon Engineering Ltd. become a wholly owned subsidiary of Oxy Low Carbon Ventures, an Occidental company that is investing in a range of new emissions-reduction technologies.
Carbon Engineering – which was founded in Calgary by Harvard professor David Keith – has already been working for years with Oxy subsidiary 1PointFive, which is aiming to commercialize the large-scale deployment of carbon capture, utilization and sequestration technology.
1PointFive is currently using Carbon Engineering’s technology to construct what it says will be the largest direct air capture project in the world, in Ector County, Texas.
Unlike the more common form of carbon capture and storage (CCS) technology – which captures emissions from industrial flue stacks and sequesters them safely deep underground – direct air capture technology removes harmful C02 emissions directly from the air for safe storage underground.
Advocates say direct air capture technology has the potential to not only reduce current greenhouse gas emissions, but also to begin removing the large quantities of CO2 emitted in the past that remain trapped in the earth’s atmosphere.
While the technology is very expensive, increasingly aggressive climate policies by governments around the world is making its deployment more feasible. The U.S. Inflation Reduction Act contains generous subsidies for direct air capture projects, and in Canada, the federal government is also hammering out details of its promised tax credit for carbon and direct air capture deployment.
“The past several years has seen major progress in the number of countries and markets implementing climate policy, and in the types of support for (direct air capture) and low carbon fuels,” Carbon Engineering Ltd. states on its website.
“By 2050, we believe direct air capture facilities have the potential to be playing a mainstream and significant role in the global effort to achieve net zero emissions and restore safe levels of CO2 in the atmosphere.”
According to 1PointFive, the plant under construction in Ector County, Texas is expected to capture up to 500,000 metric tonnes of carbon dioxide per year with the capacity to scale up to 1 million metric tonnes per year.
1PointFive has announced a scenario to deploy 70 direct air capture facilities worldwide by 2035, under current compliance and market scenarios.
This report by The Canadian Press was first published Aug. 16, 2023.
