Occidental Petroleum bluntly stated that "capturing carbon" faces financing pressure: voluntary markets struggle to sign long-term contracts + asymmetric storage risks

According to the Zhitong Finance APP, the head of the carbon removal business unit at the American energy giant Occidental Petroleum Corp. stated that startups developing direct air capture projects need to move beyond traditional financing models to scale this technology, meaning that the direct air capture model currently lacks "bankability." Occidental Petroleum (OXY.US) has long been one of Warren Buffett's heavily invested stocks, and in recent years, Buffett's Berkshire Hathaway Inc. has significantly increased its holdings in Occidental Petroleum shares. "The notion that direct air capture will be 'bankable' is somewhat mythical," said Anthony Cottone, president and general manager of 1PointFive, at the BloombergNEF "Tomorrow's Barrel Summit in the Age of AI" held in Houston on Thursday. Cottone stated that lenders want to see more long-term revenue scales, while 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 sequestration technology, and the risks associated with carbon storage and sequestration companies are greater, with lower economic returns. He noted that this "asymmetrical risk" makes it "very difficult for direct air capture startups to achieve scalability." In his latest remarks, he also mentioned that a more realistic model for expanding the carbon removal and sequestration market is to have "a single entity with aligned interests" own the entire carbon asset chain from capture to storage and sequestration, advocating for a whole-chain operation, and added that transitioning from a voluntary carbon market to a globally regulated market with mandatory requirements could also be helpful. It is understood that Occidental Petroleum's 1PointFive has been accelerating the operation of its direct air capture plant in Texas, which is expected to capture 500,000 tons of carbon dioxide annually after its completion at the end of this year. This will make it the largest direct air capture plant in the world. Cottone stated that this traditional American oil and gas giant is making significant investments in this speculative carbon capture technology because it can help bring higher growth rates to the company's "core business." What is the "direct air capture model" that Occidental Petroleum focuses on? Direct air capture (DAC) is a technology that uses chemical/physical absorbents to extract carbon dioxide (CO₂) directly from ambient air, which is completely different from capture technologies at emission sources (such as power plants); the captured CO₂ can be geologically sequestered or utilized (for fuels, building materials, etc.). In recent years, Occidental Petroleum has been continuously increasing its investment in the research and deployment of DAC: for example, its subsidiary 1PointFive is constructing the STRATOS plant in Texas, aiming to capture 500,000 tons of CO₂ annually, and has obtained injection permits from the U.S. EPA; Occidental Petroleum is also advancing the DAC hub in South Texas and has received up to $500 million in support from the U.S. Department of Energy Occidental Petroleum's carbon capture main technological route comes from its acquisition of Carbon Engineering (acquired for $1.1 billion in 2023): it uses liquid solvent (KOH) absorption + calcium looping regeneration, which belongs to two mainstream DAC routes alongside Climeworks' solid amine adsorption + temperature/vacuum swing regeneration. From a process planning perspective, large fans draw air into the contactor, where CO₂ in the air is captured by binding with the solution (such as KOH) or solid amine; subsequently, the absorbent is regenerated and high-purity CO₂ is released for storage or utilization through methods such as heating/depressurization/electrochemical processes. From a practical commercial standpoint, it currently relies heavily on voluntary carbon removal (CDR) contracts and government funding/tax incentives, while the "bankable cash flow" favored by banks is still in formation, which is why executives at Occidental Petroleum have stated that it is "difficult to be bankable in the short term."