Occidental Petroleum Shares Climb After Winning DOE Grant for Carbon Capture Project

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Bill McColl
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Published August 11, 2023
Occidental Petroleum Corp

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Key Takeaways

  • Occidental Petroleum was chosen by the Department of Energy for a $1.2 billion carbon capture project.
  • A subsidiary and its partners will develop a facility in Texas that captures carbon dioxide from the air.
  • CEO Vicki Hollub said the decision showed Occidental is ready to move the carbon capture technology forward.

Shares of Occidental Petroleum (OXY) advanced 3.3% on Friday after the U.S. Department of Energy (DOE) chose the company to receive hundreds of millions of dollars in grants for a climate change project.

The DOE said it will spend up to $1.2 billion on the development of two commercial-scale direct air capture (DAC) facilities in Texas and Louisiana. The South Texas DAC Hub in Kleberg County, Tex. will be handled by Occidental’s subsidiary, 1PointFive, and its partners. The plant will be designed to remove up to 1 million metric tons of carbon dioxide (CO2) each year and have an associated saline geologic CO2 storage site.

The second site in Calcasieu Parish, La. will be run by the non-profit science and technology firm Battelle and two others. 

Energy Secretary Jennifer Granholm explained that reducing CO2 emissions alone won’t reverse the effects of climate change and that taking out what already is in the atmosphere is critical to reaching the goal of a net-zero global economy by 2050. 

Occidental CEO Vicki Hollub said the DOE’s decision “validates our readiness, technical maturity and the ability to use Oxy’s expertise in large projects and carbon management to move the technology forward.”

The money for the projects is coming from the $1.2 trillion Infrastructure Investment and Jobs Act of 2021.

Occidental Petroleum shares jumped to their highest level since February after the announcement.

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  1. Department of Energy. “Biden-Harris Administration Announces Up To $1.2 Billion For Nation’s First Direct Air Capture Demonstrations in Texas and Louisiana.”

  2. Occidental Petroleum. “1PointFive Selected for U.S. Department of Energy Grant to Develop South Texas Direct Air Capture Hub.”

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