Oxy Secures Class VI Permits for Stratos DAC Project

Occidental Petroleum subsidiary 1PointFive has landed highly anticipated permits from the U.S. Environmental Protection Agency (EPA), allowing the company to store captured CO₂ in deep underground formations.

Receipt of the so-called Class VI permit for the massive direct air capture (DAC) Stratos project in Texas was announced April 7 as the company continues to progress infrastructure. Located on a 65-acre site in Ector County, Stratos—which is being developed in phases—is designed to capture and store up to 500,000 metric tons of CO₂ annually.

Oxy’s Stratos project is expected to be the world’s largest DAC facility when it comes online later in 2025.

“This is a significant milestone for the company as we are continuing to develop vital infrastructure that will help the United States achieve energy security,” Occidental CEO Vicki Hollub said in a statement. “The permits are a catalyst to unlock value from carbon dioxide and advance Direct Air Capture technology as a solution to help organizations address their emissions or produce vital resources and fuels.”

Oxy said the permits are the first issued by the EPA to sequester CO₂ from a DAC project. Considered a key lever to lower greenhouse-gas emissions, DAC technologies utilize large fans, called air contactors, that suck air into a system containing chemical solutions that absorb CO₂. The CO₂ is then compressed and transported for either re-use or permanent sequestration in deep underground reservoirs. Stratos utilizes technology developed by Carbon Engineering.

DAC is considered nascent compared to other forms of carbon capture and storage such as post-combustion capture that bags CO₂ from exhaust gases of industrial facilities or pre-combustion capture, which traps CO₂ before combustion via processes such as gasification or reforming. DAC extracts CO₂ directly from the atmosphere.

However, Oxy is building on its decades of experience managing CO₂, including the use of CO₂ for EOR, to demonstrate DAC technology at scale.

“EPA is committed to approving permits as quickly as possible and ensuring they meet requirements to protect drinking water sources,” EPA Regional Administrator Scott Mason said April 7. “Oxy Low Carbon Ventures has demonstrated their ability and intention to operate these wells responsibly while creating jobs and supporting the Texas economy.”

The EPA in September 2024 issued a draft permit to Oxy for three proposed wells to store about 722,000 metric tons of CO₂ per year about 4,400 ft belowground for the project.

“The permits, issued under the Safe Drinking Water Act’s Underground Injection Control program, are a critical component of Occidental’s plan to securely and durably store CO₂ captured from the atmosphere,” Oxy said. “Throughout EPA’s rigorous review process, Occidental demonstrated that its technologies, processes, monitoring programs and other procedures meet or exceed federal and state requirements for injection wells that store CO₂ in geologic formations more than one-mile underground.”

The company has said Stratos will have an initial capacity of 250,000 tonnes per annum as it ramps up throughout 2025. Startup operations for the remaining 250,000 tonnes per annum of capacity is expected to begin in mid-2026. In February, the company said the first phase of the project was 94% complete overall with construction 98% complete.

Data from the International Energy Agency show about 27 DAC plants have been commissioned worldwide. Plans are underway for about 130 large-scale DAC facilities designed to capture more than 1,000 tons of CO₂ per year, including Stratos.

The largest commercial-scale DAC facility operating today is Climeworks’ Mammoth in Iceland. The plant has an annual capacity of up to 36,000 tons of CO₂ but the DAC specialist has ambitious companywide plans to scale-up to multi-megaton capacity in the 2030s and gigaton capacity by 2050.

Other DAC plants in operation include Heimdal Inc.’s Bantam plant at CapturePoint’s Oklahoma Carbon Hub.

The plant, which was launched in 2024, is designed to capture more than 5,000 tons of CO₂ annually. Bantam is currently the largest DAC facility in the U.S. The captured CO₂ is used for EOR.

Oxy, which is also developing the South Texas DAC hub and Gulf Coast sequestration projects, is scheduled to deliver its first-quarter 2025 earnings presentation on May 8.