The U.S. Environmental Protection Agency has issued Texas its first Class VI permit for carbon dioxide injection wells, authorizing Occidental’s Oxy Low Carbon Ventures to drill three CO₂ storage wells in Ector County, located in the heart of the Permian Basin. The project — part of Occidental’s Stratos direct air capture joint venture with BlackRock — is approved to inject up to 8.5 million metric tons of captured CO₂.

According to the EPA, Class VI wells are designed to store carbon dioxide (CO2) deep underground within rock formations—a method known as geologic sequestration. This process is a key part of carbon capture and storage (CCS), a technology aimed at cutting down the amount of CO2 released into the air.

CO2 used for geologic sequestration can come from various sources, including emissions captured at industrial sites like steel or cement plants, energy facilities such as power plants, ethanol or hydrogen production, and even directly from the atmosphere.

This marks a major regulatory milestone for carbon capture and storage (CCS) in Texas, a state that has quickly become a focal point for CCS development. Over 40 additional projects are currently awaiting federal permits for CO₂ injection across the state.

However, the approval hasn’t come without controversy. Critics point to the environmental and seismic risks associated with large-scale underground injection, especially in regions like the Permian Basin where wastewater disposal has already been linked to increased earthquake activity and well blowouts. Some community and environmental groups have raised concerns about whether the current permitting process adequately addresses these risks, especially as CCS projects ramp up.

There are also political and economic uncertainties. While the Inflation Reduction Act of 2022 created strong financial incentives for carbon capture projects, including direct air capture (DAC), the future of those subsidies is now uncertain. Ongoing budget negotiations have included proposals to slash clean energy tax credits, and the Trump administration has signaled a shift in messaging — focusing less on emissions reduction and more on job creation and economic impact.

Adding to the regulatory tension, the Texas Railroad Commission is now seeking authority from the EPA to take over permitting for carbon sequestration projects, a move aimed at speeding up approvals. This push for state-level control has sparked debate over whether environmental protections might be weakened in the process.

While the EPA’s decision opens the door for one of the largest DAC projects in the country to move forward, it also underscores the need for careful oversight, community engagement, and transparent risk assessment as CCS efforts scale across Texas.