SHREVEPORT, Louisiana — Startups seeking to vacuum carbon dioxide from the skies have long had an uneasy relationship with the oil giants fueling global warming.
But with President-elect Donald Trump returning to the White House, direct air capture companies’ connections to the oil industry may be their greatest political asset.
Direct air capture is a “clean version” of oil production, said Shreveport Mayor Tom Arceneaux, a Republican who works at an oil- and gas-focused law firm. Oil companies have the deep pockets, workforce and infrastructure know-how to develop DAC plants as well as transport and bury massive quantities of captured CO2, he argued.
He spoke to POLITICO’s E&E News a week before Trump’s victory at an open house for a planned $1 billion direct air capture hub that would stretch the length of western Louisiana. The president-elect is an oil booster who rejects mainstream climate science.
“This is complementary to our oil and gas industry,” Arceneaux said of the massive project that’s intended to limit climate change, known as Project Cypress. “People in the business and economic development community are aware of it, and they’re very excited.”
The hub, which is being funded by the Biden administration, would be the world’s largest DAC project and include plants here and near Vinton, a rural town almost 200 miles to the south, near the coast. Both facilities would send carbon dioxide to a storage site located in between them.
Project Cypress is being developed by the direct air capture startups Climeworks and Heirloom, and coordinated by the scientific nonprofit Battelle. The tech companies use fans, carbon-absorbing materials, heat and electricity to filter CO2 from the atmosphere.
Climate scientists say widespread deployment of direct air capture and other carbon removal technologies will be required to limit the damage caused by global warming, along with steep emissions cuts. But Trump will take office as emissions are on the rise and with the carbon removal industry in its infancy.
Completion of Project Cypress is contingent on $550 million in matching funds that the Biden administration has awarded. But just $50 million has been distributed by the Energy Department so far, raising questions about whether Trump might cut off support for the hub.
The department is also supporting the development of a similarly massive DAC hub in southern Texas and intends to help fund two additional hubs — plans that could be upended by Republicans' decisive election gains. The party will control the White House and hold narrow majorities in the Senate and House for at least the next two years.
The future of Project Cypress and the rest of the $3.5 billion DAC hub program will now be shaped by Trump and Chris Wright, the oil executive he's picked to lead the Energy Department. The former and future president has dismissed global warming as a "hoax" and downplayed the need to reduce climate pollution.
‘A fig leaf to emit even more’
Trump's return to power will put Climeworks and Heirloom in an uncomfortable position: It may now be in their best interest to cozy up to an industry they had previously tried to avoid.
Founded in 2020, California-based Heirloom spoke out against the oil and gas industry’s influence on direct air capture efforts last year after Occidental Petroleum purchased Carbon Engineering, another DAC developer. The CEOs of Occidental and Exxon Mobil have both suggested that direct air capture could be used as a way to continue pumping crude.
"We must ensure that our industry isn't used as a fig leaf to emit even more and protect against [carbon dioxide removal] excusing expansions of fossil fuels," Heirloom leaders wrote in a joint statement of principles. To ensure that doesn't happen, Heirloom's top executives said they "will not grant equity to companies whose core business is the production of oil and gas, nor will we name any of its industry representatives to the company board."
Carbon Engineering founder David Keith acknowledged that selling his startup to Occidental for $1.6 billion last year might hinder climate action.
"Big oil will try to use carbon removal to defend the status quo," he wrote in an op-ed for The Economist after closing the deal.
At the same time, Keith argued that oil companies' investments in direct air capture could water down their opposition to policies that seek to limit emissions: "My hope is that this blurring of interests will lubricate the political bargains needed to accelerate climate progress."
Climeworks, which was one of the first direct air capture companies when it launched in 2009, has also sought to distance itself from the oil and gas industry.
The Swiss startup's website defines responsible deployment of direct air capture as when it is "used to neutralize residual and historic emissions, which will be necessary to enable net zero." Climeworks also says its plants use only renewable energy, power derived from burning trash, or heat from fossil fuel facilities that would otherwise be vented away.
The tech companies' wariness about the fossil fuel industry is driven in part by environmental concerns — and notably doesn't apply to oil workers whose skills they value. The founders of both startups have spoken about the need to deploy direct air capture and other carbon removal technologies.
"I grew up in southeast India where I saw it firsthand: those who have contributed the least to climate change [are] suffering the most from its impacts," Heirloom CEO Shashank Samala said last year at the unveiling of its first commercial plant in central California. "We founded this company as our way to show compassion to the people and places and species that are most impacted by climate change."
‘Offset the brown electrons’
The co-founders of Climeworks were drawn to carbon removal by their shared passion for skiing, a sport threatened by a warming planet.
"Had we stopped emitting 20, 30 years ago, or at least substantially reduced our emissions, Climeworks and this whole emerging industry around us would likely not be here today," Jan Wurzbacher, the company's co-CEO said in a 2022 TED Talk. "And for the climate, that would probably be the better solution. However, that's not where we are today."
There are also business reasons for the startups to avoid fossil fuels.
Both companies mainly sell carbon removal credits, which reflect the total amount of CO2 the plants are designed to scrub from the sky minus the amount of climate pollution produced by their facilities. So the more oil and gas they use to develop and operate the plants, the fewer credits they have to sell to tech giants, Wall Street banks and the federal government — a customer they likely lost with Trump's win.
The Project Cypress facilities have already racked up thousands of tons of emissions that the companies have committed to zeroing out when they come online. That includes the carbon costs associated with their community engagement efforts and eventually the construction, materials and energy used to build the plants.
Last month, the companies and Battelle collectively flew in more than a dozen representatives to the open houses.
Each startup also employs engagement leaders who live hundreds or — in Climeworks' case — thousands of miles from Shreveport and Vinton. That requires the companies' officials to do a lot of driving or flying to sit down with local politicians, regulators and community members.
Lesley Matthews, who leads Climeworks’ stakeholder efforts, splits her time between Louisiana and her home in Calgary, Canada. The former oil and gas company official said Climeworks is looking to hire someone who lives closer to Vinton, in part to cut down on her travel emissions.
Then there is the challenge of securing emission-free power from Louisiana's high carbon grid. More than half of the generation mix of Entergy, the state's main power utility, comes from natural gas and coal plants.
"We're working through that strategy, in terms of how we offset the brown electrons with the green electrons," Darcee Adam, Climeworks' project director, said while standing beside the former rice field that the company plans to plow under.
Like many areas in Louisiana, the Climeworks site abuts an oil well pad. On a cloudy October morning, noise from its gas flare interrupted a chorus of warblers and crickets.
"As soon as we're taking energy off the grid to produce carbon dioxide removal certificates, we need to be having renewable energy come into the grid," Adam said. "Otherwise it kills our lifecycle analysis."
Neighbors unaware of Project Cypress
Back at the Shreveport open house, a reporter asked Mayor Arceneaux what his constituents thought of the industrial climate project planned on the edge of town.
"The public at large, if you said Heirloom or Cyprus, I'm not sure they would know what you're talking about," he told E&E News.
Turnout at the event — held in a cavernous room of the city's convention center — seemed to support Arceneaux's observation. Shreveport is Louisiana's third-largest city, with a population of almost 178,000 people, more than 56 percent of whom are Black, according to the Census Bureau.
But the three-hour open house attracted roughly 100 attendees, and only a handful were people of color. That was in spite of the focus the Biden administration has put on involving the public in the development of direct air capture hubs, a climate technology that some environmentalists from communities of color remain skeptical of.
The limited turnout at the evening event was not due to a lack of effort by Heirloom, according to spokesperson Christian Theuer. Ahead of the open house, the company issued a media advisory, paid for radio and print ads with several local outlets, and personally contacted 180 people or organizations in Shreveport, he said.
The event featured information tables with federal regulators from the Energy Department and Pipeline and the Hazardous Materials Safety Administration as well as representatives of Battelle, Heirloom and Climeworks. Several officials from CapturePoint, which is planning to build two 100-mile pipelines connecting the DAC plants to the company's storage wells, were also in the room.
Heirloom aims to build two DAC facilities near Shreveport. One would be constructed without Energy Department grants, and is designed to pull up to 17,000 metric tons of carbon from the sky annually when it comes online in 2026.
The other Heirloom facility, which is part of Project Cypress, is slated to start up in 2027 with an initial capacity of 100,000 tons per year. It could eventually triple in size, with additional federal support.
If all goes as planned, the two Heirloom facilities would annually be capable of removing energy-related pollution produced by 41,000 homes, according to EPA data.
Both Heirloom plants would be adjacent to oil and gas well pads. That's not for a strategic reason: The concentration of CO2 in the atmosphere is roughly equivalent around the globe. It's a reflection of Louisiana's reliance on fossil fuels — a dependency the Biden administration had hoped to break.
"Oil and gas has been here [for] a hundred years, so you've got to live with it," said Bill Altimus, the president of the Port of Caddo-Bossier, which owns the plots of land Heirloom plans to develop in Shreveport.
The following night, federal regulators and corporate officials reconvened in a stuffy conference room at Sowela Technical Community College in Lake Charles.
The school is more than 30 miles away from the field where Climeworks plans to build the world's largest DAC plant. It would be capable of removing up to 1 million metric tons of carbon dioxide from the sky each year — an amount equivalent to more than the annual emissions of two natural gas-fired power plants, according to the EPA.
Climeworks plans to build its southwestern Louisiana megafacility in two phases. The first plant would be capable of removing up to 300,000 tons annually when it comes online at the end of 2027.
That’s larger than any DAC plant in operation today and would be second only to the 500,000 ton facility Occidental is constructing in West Texas. (With the Energy Department's backing, Occidental is also developing a DAC hub in southern Texas that would be twice that size.)
The Lake Charles open house was more demographically representative of Calcasieu Parish, which is a quarter Black and includes Vinton.
But many of the people who live closest to the planned DAC facility weren't in attendance, according to Cynthia Robertson, the executive director of the local environmental group Micah 6:8 Mission.
"The folks that typically are at things like this benefit from it — or they're trying to figure out how to benefit from it," she said.
Developers 'feeling confident'
The difficulty that developers of Project Cypress had in connecting with local people might have been a significant stumbling block if Vice President Kamala Harris had beaten Trump. She and President Joe Biden had placed a priority on including the voices and perspectives of impacted communities in government-funded infrastructure developments.
The potential lack of community buy-in might be less troublesome to Trump, who campaigned on promises to slash government mandates and other red tape for businesses — a central focus of his first term in office. The Trump transition team didn't respond to a request for comment.
A bigger risk for Climeworks, Heirloom and other DAC startups is that federal subsidies could be curtailed or eliminated next year, when Trump and his allies in Congress will look for ways to offset tax cuts the president-elect promised voters.
On the campaign trail, Trump repeatedly vowed to repeal the $1.6 trillion in climate-related spending authorized by the Inflation Reduction Act and other Biden-era laws. Billions in funding from those measures are intended to promote the removal of carbon from the atmosphere via direct air capture.
Vikrum Aiyer, Heirloom's head of climate policy, suggested that the oil industry's growing interest in DAC could protect the hub program and the $180 per ton subsidy the startup plans to begin collecting when its Louisiana facilities are up and running. He is one of four Heirloom officials who signed onto the company's oil-bashing statement of principles.
"There's an embedding of energy majors from the oil and gas industry — huge Trump donors and folks that are advising everything from the campaign to Project 2025 — that are seeing the promise, and trafficking in the promise, of these types of investment tax credits to create jobs in this industry," Aiyer told E&E News in a Shreveport hotel bar.
"We are feeling confident that we'll be able to continue to build," he said before the election. "But of course, we would welcome an opportunity to sit down with either president's administration to not take that for granted."
