Occidental Petroleum Corporation (OXY.US) bluntly states that "carbon capture" faces financing pressure: voluntary market difficult to sign long-term contracts + asymmetric risk of sequestration.

The head of the carbon removal business unit at Occidental Petroleum Corporation, a giant, U.S.-based energy corporation, stated that in order for start-ups developing direct air capture projects to scale up this technology, they need to go beyond traditional financing models to expand the technology, meaning that direct air capture projects currently do not have "bankable" funding. Occidental Petroleum Corporation (OXY.US) is one of Warren Buffet's long-time favorite stock holdings, and Berkshire Hathaway Inc., under Buffet's umbrella, has been heavily investing in Occidental Petroleum Corporation's stock in recent years. "The idea that direct air capture will become 'bankable' is somewhat mythical," stated Anthony Cottone, President and CEO of 1PointFive, at the BloombergNEF Summit on Thursday in Houston. Cottone mentioned that lenders want to see a more long-term revenue scale, and customers in the voluntary carbon market are not always willing to sign longer-term contracts. Successfully capturing and removing carbon from the air also involves storage technology, and companies involved in carbon storage and sequestration take on greater risks with less economic return. He stated that this "asymmetric risk" makes it "very difficult for direct air capture start-ups to scale up." He also mentioned in his recent remarks that a more realistic model for expanding the carbon removal and storage market is for "a single entity" to have ownership of the entire carbon asset chain from capture to storage and sequestration, advocating for an integrated approach. He also suggested that transitioning from voluntary carbon markets to compulsory global regulated markets could also be helpful. It is known that 1PointFive, a subsidiary of Occidental Petroleum Corporation, has been accelerating the commissioning of its direct air capture plant in Texas, which is expected to capture 500,000 tons of carbon dioxide annually once completed by the end of this year. This will make it the largest direct air capture plant globally. Cottone stated that this traditional American oil and gas giant has invested heavily in this speculative carbon capture technology because it can bring higher growth rates to the company's "core business." What is the "direct air capture model" focused on by Occidental Petroleum Corporation? Direct Air Capture (DAC) is a technology that directly extracts carbon dioxide (CO) from ambient air using chemical/physical absorbents, as opposed to capture at emission sources (such as power plants); the captured CO can be geologically stored or used for utilization (fuel, building materials, etc.). Occidental Petroleum Corporation has been continuously investing in DAC research/deployment in recent years: for example, its subsidiary 1PointFive is constructing the STRATOS plant in Texas, aiming to capture 500,000 tons of CO annually and has received EPA underground injection permits; Occidental Petroleum Corporation is also advancing the DACHub Group, Inc. Class A project in South Texas and has secured up to $500 million in support from the U.S. Department of Energy. Occidental Petroleum Corporation's carbon capture technology mainly comes from its acquisition of Carbon Engineering (acquired in 2023 for $1.1 billion): using liquid solvent (KOH) absorption + calcium loop regeneration, which belongs to the two mainstream DAC pathways along with Climeworks' solid amine adsorption + temperature/vacuum regeneration. In terms of process planning, large fans bring air into contactors, where CO in the air is captured by solutions (such as KOH) or solid amines; the absorbent is then regenerated through heating/pressure reduction/electrochemical methods and releases high-purity CO for storage or utilization. From a practical business perspective, current reliance on voluntary carbon removal (CDR) contracts and government funding/tax incentives means banks are still forming their preference for "mortgagable cash flows," which is why Occidental Petroleum Corporation executives have said that it is currently difficult to be "bankable" in the short term.