U.S. EPA Approves Texas’ First CO2 Injection Well

By Valerie Volcovici

WASHINGTON, April 7 (Reuters) – The U.S. Environmental Protection Agency on Monday issued Texas’ first permit to allow drilling to inject and store carbon dioxide to oil company Occidental OXY.N.

The company’s Oxy Low Carbon Ventures received a so-called Class VI permit to drill three CO2 wells in Ector County in the Permian Basin for its Stratos direct air capture joint venture with asset manager BlackRock BLK.N, to inject 8.5 million metric tons of CO2.

“EPA is committed to approving permits as quickly as possible and ensuring they meet requirements to protect drinking water sources,” said EPA Regional Administrator Scott Mason.

Carbon sequestration had been a key part of former President Joe Biden’s administration, which sought to reduce emissions that cause global warming. Biden’s 2022 Inflation Reduction Act had included billions of dollars’ worth of subsidies for CCS projects.

The future of those tax credits is uncertain as Republicans seek to slash tax credits to achieve steep spending cuts in the budget reconciliation process. The Trump administration is weighing a cut in federal support for two major DAC projects, including another Occidental DAC project in Texas.

In its announcement, the Trump EPA did not mention reducing emissions but said the technology “will provide well-paying jobs and can be implemented in an environmentally responsible way.”

Texas had received a surge of interest from companies hoping to bury carbon dioxide in its oilfields, with 43 projects seeking federal permits for injection.

But concerns are also growing that pumping CO2 into the ground could exacerbate earthquakes and well blowouts happening in the Permian Basin as Texas struggles to manage wastewater disposal under a different federal well permitting program, potentially undermining public support.

The Texas Railroad Commission, which oversees wastewater injection, is also seeking authority from the EPA to oversee its own permitting program for carbon sequestration to speed up approvals.

(Reporting by Valerie Volcovici in Washington; Editing by Matthew Lewis)