The Permian Basin has been the center of oil and gas production nationally – even globally – amid its unconventional shale boom.
Now the region stands to be the global center of efforts to capture and eliminate carbon emissions, helping the environment and climate change. That’s because the region will be the site of the world’s largest Direct Air Capture and sequestration facility in the next few years.
“Direct Air Capture technology is known,” Jim McDermott, chief executive officer of 1PointFive and founder and managing partner of Rusheen Capital Management, said in a phone interview. “It’s time to scale that technology up. The Permian is beneficial because people know carbon capture, and the region can safely store it. The Permian Basin will play a large role and, if the solutions work, that will have a global impact.”
1PointFive – named for the international protocol of limiting global warming to 1.5 degrees – is a just-formed joint venture between Oxy Low Carbon Ventures, a subsidiary of Occidental Petroleum, and Rusheen to finance and deploy the technology.
“Our focus is to design, build, own and operate Direct Air Capture plants, first in the Permian Basin and use for atmospheric carbon capture and permanently put it away in Occidental fields,” McDermott said.
When he was on the board of Carbon Engineering, the Canadian clean energy company that developed the DAC technology that is being licensed to 1PointFive, he met Vicki Hollub, chief executive officer of Occidental. McDermott said she was instrumental in moving the project forward.
He met with Richard Jackson, president of Oxy Low Carbon Ventures and chairman of 1PointFive. “Richard and I talked about the need – this is exciting technology – to build a plant as quickly as we can. The Permian Basin is an amazing place in terms of infrastructure for CO2. Occidental has billions of dollars in infrastructure and the most well-developed CO2 operations. The Permian has a CO2 management system, and Texas has very efficient deregulated electric grid. West Texas also has some of the lowest-cost wind and solar power and low-cost storage capacity.”
Engineering and design for the first facility is underway and, while the COVID-19 pandemic caused some delays, McDermott said it is on target for construction to begin in 2022, with completion set for roughly two years later. A site in the Permian has been selected but is not being disclosed, he said. That first facility will be followed by at least 27 more, and McDermott said he envisions thousands of such plants being constructed around the nation and around the world.
“This is an enormous opportunity for the oil and gas industry in West Texas and the Permian Basin to lead the world in decarbonizing fossil fuels and long-term sequestration,” he said.
McDermott added, “Oil companies know the subsurface, oil and gas and minerals better than anyone.”
The challenge is figuring out what to do with that carbon, he said, and the key to answering that question is using the existing skills so prevalent in the Permian in CO2-based enhanced oil recovery and repositioning them in a different direction.
“That’s what energy transition looks like,” he said
