The head of Occidental Petroleum Corp.'s carbon removal business division stated that startups developing direct air capture projects need to move beyond conventional financing models to scale this technology effectively, indicating that direct air capture currently lacks "bankability." Occidental (OXY.US) represents one of Warren Buffett's long-term major holdings, with Berkshire Hathaway Inc. substantially increasing its stake in Occidental shares in recent years.

"There's somewhat of a mythology around direct air capture becoming 'bankable,'" said Anthony Cottone, President and General Manager of 1PointFive, during Thursday's BloombergNEF Future of the Barrel Summit in Houston, themed "AI Era Tomorrow."

Cottone explained that lenders seek more extended revenue visibility, while voluntary carbon market customers don't always commit to longer-term contracts. Successfully capturing and removing carbon from the atmosphere also involves storage technology, where carbon storage and sequestration companies face greater risks with lower economic returns.

This "asymmetric risk" makes it "extremely challenging for direct air capture startups to achieve scale," he noted. In his recent remarks, Cottone suggested that a more realistic approach to expanding carbon removal and storage markets would involve "an aligned entity" owning the entire carbon asset portfolio from capture to storage and sequestration, advocating for integrated operations. He added that transitioning from voluntary carbon markets to mandatory global regulatory markets could also provide assistance.

Occidental's subsidiary 1PointFive continues accelerating the deployment of its direct air capture facility in Texas, which upon completion by year-end is expected to capture 500,000 tons of carbon dioxide annually. This would make it the world's largest-scale direct air capture facility.

Cottone indicated that this traditional American oil and gas giant invests heavily in speculative carbon capture technology because it can help drive higher growth rates for the company's "core business."

**What is Occidental's Focus on "Direct Air Capture"?**

Direct Air Capture (DAC) represents a category of technologies using chemical/physical absorbents to extract carbon dioxide (CO₂) directly from ambient air, differing completely from point-source capture technologies (such as power plants). The captured CO₂ can be geologically stored or utilized (for fuels, building materials, etc.).

Occidental has consistently increased its investment in DAC research and deployment in recent years. For instance, its subsidiary 1PointFive is constructing the STRATOS facility in Texas, targeting annual capture of 500,000 tons of CO₂, and has received underground injection permits from the EPA. Occidental is also advancing a DAC hub in South Texas with up to $500 million in support from the U.S. Department of Energy.

Occidental's carbon capture technology primarily stems from its acquisition of Carbon Engineering (acquired for $1.1 billion in 2023), employing liquid solvent (KOH) absorption with calcium cycling regeneration. This differs from Climeworks' solid amine adsorption with temperature/vacuum swing regeneration, representing two mainstream DAC approaches.

From a process perspective, large fans direct air into contactors where atmospheric CO₂ combines with solutions (such as KOH) or solid amines for capture. Subsequently, heating/depressurization/electrochemical methods regenerate the absorbent and release high-purity CO₂ for storage or utilization.

From a commercial standpoint, current operations largely depend on voluntary carbon dioxide removal (CDR) contracts and government funding/tax incentives. The "collateralizable cash flows" favored by banks remain under development, providing context for why Occidental executives describe the technology as "difficult to make bankable in the short term."