Texas Takes Charge of Oxy's Brown Pelican Storage Bid

Texas regulators, not the EPA, now oversee construction of one of the country's largest carbon storage sites. Occidental's Brown Pelican project near Odessa already holds federal approval to store 8.5 million metric tons of CO2 over 12 years. That approval now moves under Texas Railroad Commission oversight, a faster path than the old federal review.

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What is the Brown Pelican project?

Oxy Low Carbon Ventures, a subsidiary of Occidental Petroleum, designed Brown Pelican to store carbon dioxide captured by its nearby STRATOS direct air capture facility. STRATOS pulls CO2 straight from the atmosphere near Odessa, Texas.

The captured gas travels a short pipeline to three injection wells drilled into the Lower San Andres formation, more than 4,500 feet underground. Oxy plans to inject 0.385 million metric tons a year for the first two years, then 0.77 million metric tons a year for a decade after that.

Over the full 12 year injection period, the project is designed to permanently store 8.5 million metric tons of CO2 (Railroad Commission of Texas, 2025).

Why did permitting authority shift to Texas?

The EPA granted Texas primary enforcement authority over Class VI wells on November 12, 2025, effective December 15, 2025. Brown Pelican's permit is one of 18 Class VI applications the Railroad Commission of Texas inherited from the federal review queue that same month.

Texas becomes the sixth state to win this authority, following a wave of states that secured Class VI primacy in 2025 alone. The state received a 1.93 million dollar EPA grant to help stand up its review program.

That certainty matters for developers. Texas bypassing the federal backlog gives projects like Brown Pelican a clearer runway toward construction, instead of an open ended wait in line.

Stratos and Brown Pelican form a closed loop

STRATOS is designed to capture up to 500,000 metric tons of CO2 every year, making it one of the largest direct air capture facilities built to date. Brown Pelican gives that captured carbon a permanent home just down the pipeline.

BlackRock committed 550 million dollars to help build STRATOS through a joint venture with Occidental. That capital backing helped push the facility toward commercial operations.

Corporate buyers have already lined up behind STRATOS. Microsoft agreed to purchase 500,000 metric tons of carbon removal credits from the facility, and Bain and Company signed on for 9,000 metric tons over three years.

What does this mean for carbon storage investment in Texas?

Faster state review shortens the gap between a signed permit and revenue. Developers can only claim the federal 45Q tax credit, worth up to 85 dollars per metric ton stored, once a well is permitted and operating.

Brown Pelican is not the only project benefiting from the handoff. Texas's own primacy grant pulled 64 applications out of the EPA's backlog in one move, and several other Texas projects are now working through that same faster state review.

Texas has set a target of issuing roughly 25 Class VI permits within its first two years of primacy. That pace would mark a sharp change from the years long EPA queue that many CCS developers previously faced.

Milestone	Date
Brown Pelican Class VI application filed	May 2022
EPA approves Class VI permits for Brown Pelican	April 2025
EPA grants Texas Class VI primacy	November 2025
Texas primacy takes effect, RRC assumes oversight	December 15, 2025

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Texas is not the only state moving on this. California brought its first operational CCS project online in May 2026, a sign that underground storage is moving from pilot projects to working infrastructure nationwide.

Brown Pelican shows what a permitted project looks like once it lands on a faster regulatory lane. With Texas now running 18 inherited applications on its own clock, more projects could reach construction sooner than the old federal timeline allowed.

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