Texas Trio Eyes a High-Stakes Carbon Venture

Occidental, 1PointFive, and XRG weigh a DAC joint venture that could open new carbon focused investment pathways

8 Aug 2025

A possible partnership in South Texas is giving fresh lift to the idea that carbon removal and traditional energy might evolve together. Occidental, its carbon focused arm 1PointFive, and global investor XRG have begun evaluating a joint venture for a major direct air capture hub on the historic King Ranch. Even at this early stage, the talks are drawing notice from analysts who see the proposal as a glimpse of how the sector may balance climate pressure with long held operational priorities.

The hub would pull carbon dioxide straight from the air, then either store it far below ground or route it into enhanced oil recovery. Supporters say that pairing could shrink the environmental footprint of existing fields by turning familiar tools into part of a wider cleanup effort. As interest in low carbon strategies grows, the South Texas concept is emerging as a test of how far the industry is willing to go to match climate goals with commercial realities.

The project’s momentum is helped by progress at Stratos, a related facility in West Texas now moving through early commissioning. Together, the two sites could offer a model for future hubs along the Gulf Coast. Federal policy remains a powerful tailwind, especially the 45Q tax credit, which has made carbon capture more appealing to investors even though this project has yet to lock in specific incentives.

Still, the hurdles are real. Direct air capture remains expensive, and critics question whether using captured carbon to coax more oil from the ground advances the climate mission. Others counter that a blended approach provides a practical bridge for an energy system that cannot transform overnight. XRG’s role underscores how global financiers are watching the United States as a proving ground for the next wave of climate technology.

For now, the joint venture remains under evaluation, but the idea already hints at an industry seeking a cleaner identity. With long range plans that could scale dramatically, the South Texas vision reads less like an imminent build and more like a signal of where the sector may be heading. If it moves forward, it could mark a moment when carbon and energy begin to work in tandem toward a shared future.