Occidental Petroleum Corp., a major player in the oil industry based in Houston, is set to acquire Canadian clean-tech innovator Carbon Engineering Ltd. in a deal valued at US$1.1 billion. This acquisition aims to amplify the development of facilities dedicated to extracting substantial amounts of carbon dioxide (CO2) from the atmosphere.
Currently, 1PointFive, a subsidiary of Occidental, is leveraging Carbon Engineering’s advanced technology to construct a direct-air-capture (DAC) establishment in West Texas. This facility is anticipated to eliminate up to one million tonnes of CO2 annually. In a recent development, these partner companies secured U.S. federal grants to kickstart another ambitious project near Corpus Christi, Texas. This carbon-capture hub promises to scale up to 30 times the initial project’s size.
The acquisition of Carbon Engineering, headquartered in Squamish, B.C., marks another instance of U.S. and other international giants snapping up Canadian technology and clean-tech enterprises. Their interest often peaks when these Canadian firms showcase their capabilities to scale and commercialize. Occidental and Carbon Engineering first joined forces in 2019.
Vicki Hollub, Occidental’s CEO, stated, “The purchase of Carbon Engineering not only signifies our commitment to driving technology innovation but also to expediting DAC cost reductions. We’re excited about the potential new revenue avenues, encompassing technology licensing and royalties.”
Founded by Ottawa-born physicist David Keith, who presently serves at the University of Chicago, Carbon Engineering earned early endorsements from notable figures such as Microsoft co-founder Bill Gates and Canadian financier Murray Edwards. Investors include eminent names like Air Canada, Airbus SA, Chevron Corp., and Canadian billionaire Peter J. Thomson.
Expressing his enthusiasm, Daniel Friedmann, CEO of Carbon Engineering, mentioned, “Our strengthened alliance with Occidental will enhance our capacity to lead global efforts in large-scale CO2 removal and foster our journey towards a net zero future.”
Unlike traditional carbon-capture projects, Carbon Engineering’s solution involves drawing ambient air with fans, separating the CO2 through a chemical procedure, and then either storing it underground or utilizing it to produce sustainable fuels. This innovative approach allows for DAC facilities to be established virtually anywhere, given the presence of renewable energy, suitable land, and the right geology for CO2 storage.
The partnership began the Stratos project last year, a plant that comes with a US$1 billion price tag. Renowned entities like Airbus, Shopify, and the NFL’s Houston Texans have already secured carbon removal credits from this initiative.
The collaboration received a significant endorsement when the U.S. Department of Energy allocated US$1.2 billion for two DAC hubs, with one rival project proposed by Switzerland-based Climeworks AG.
Occidental has outlined its payment plan for the acquisition, which will be distributed over three annual installments, with the initial payment due after the deal finalizes later this year. Following the acquisition, Carbon Engineering will operate as a fully owned subsidiary of Oxy Low Carbon Ventures, ensuring continuity for its employees and retaining its innovation hub in Squamish.
