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.

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 ), 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.