Carbon capture and storage company 1PointFive, a direct subsidiary of Occidental, one of the largest oil producers in the US, has secured up to $500 million in funding from the U.S. Department of Energy’s Office of Clean Energy Demonstrations (OCED).
This funding will support the development of 1PointFive’s South Texas Direct Air Capture (DAC) Hub, a large-scale project that will host a DAC facility with an initial removal capacity of 500,000 metric tons of CO2 per year.
Spanning over a territory of 106,000 subsurface acres on King Ranch in Kleberg County, Texas, the site will be constructed in line with a concept to advance its carbon removal capacity to over 1 million metric tons in the future.
The DOE funding allocated for this project will be released in several tranches, and the first portion of $50 million will be used to bolster the current operations of 1PointFive at the South Texas DAC Hub.
This work will include engineering activities, obtaining permissions, and the procurement of long-lead equipment.
As part of the hub’s development strategy, 1PointFive has also included a community benefits plan intended to foster engagement with the local population, providing hiring opportunities as well as pathways for educational and professional qualifications.
Commenting on the news for the funding, Kajsa Hendrickson, Director of Policy at Carbon180, an NGO focused on scaling carbon removal, stated, “As one of the first commercial scale carbon removal projects in the U.S., the South Texas DAC Hub will have long-standing impacts on the future of the industry.”
She added, “It’s critical we discuss how to build programs that are just, equitable, and science-driven—while ensuring the wants and needs of local communities are prioritized along the way.”
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While the total amount of the award for the South Texas DAC Hub is set to be up to $500 million, which will go towards the construction of the initial DAC facility at the site, in the future the award might be increased up to $650 million, a boost that would support the site’s expansion into a regional carbon network in South Texas.
According to project developers, the DAC site has the capacity to grow to up to 30 million metric tons of carbon removed annually, with the possibility to store up to 3 billion metric tons of CO2 in saline formations.
Erin Burns, the Executive Director at Carbon180, pointed out that together with Project Cypress, awarded in March 2024, the South Texas DAC Hub marks yet another colossal investment in carbon removal.
“Now that both megaton hubs have their awards, there’s a lot at stake. As the sector continues to scale, the focus should be on how we drive innovation in direct air capture to meet climate goals and support communities. These hubs have the potential to shape the future of the carbon removal industry, and continued investment in community-focused policy will ensure we lay the foundation for an industry rooted in transparency and accountability,” she stated.
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