Oklo, Diamondback Energy Mulling 20-year PPA on Nuclear to Electrify Permian Basin Oil and Gas Operations

April 10, 2024
A series of 50-MW Aurora powerhouses could act as nuclear-powered microgrids to provide carbon-free electricity to counter the emissions involved in production from the shale plays. The agreement between Oklo and Diamondback is tentative and non-binding as both sides work out the logistics

Oil and gas producer Diamondback Energy has signed a non-binding letter of intent (LOI) exploring a power purchase agreement for advanced, small reactor nuclear to potential electrify much of its operations in the shale oil-rich Permian Basin of west Texas.

Next-gen nuclear reactor developer Oklo announced the 20-year LOI with Diamondback. Under the proposed deal, Oklo’s future Aurora powerhouses would supply electric power to Diamondback’s E&P subsidiary in the region near Midland, Texas.

A series of 50-MW Aurora powerhouses could act as nuclear-powered microgrids to provide carbon-free electricity to counter the emissions involved in production from the shale plays. The agreement between Oklo and Diamondback is tentative and non-binding as both sides work out the logistics and, of course, the nuclear developer gaining regulatory approval, additional future financing and building the projects.

“By developing and providing a low-cost, high-reliability and emission-free energy source, Oklo is poised to help meet the growing energy requirements of operators like Diamondback,” Oklo co-founder and CEO Jacob DeWitte said in a statement.

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Oklo has received a site use permit from the U.S. Department of Energy, fuel material award from the Idaho National Laboratory and made its license application to the U.S. Nuclear Regulatory Commission. Last year, Oklo announced a merger with AltC Acquisition Corp. to create a publicly traded company and generate up to $500 million in capital for accelerating Oklo’s business plan and fund deployment of the first Aurora powerhouse.

Other early supporters of Oklo include OpenAI CEO Sam Altman, one of the data sector leaders who is bullish on next-gen nuclear power to help meet the needs of future data center development and net zero goals.

Interest in nuclear energy to help meet net zero goals is increasing, although some microgrid developers are skeptical on whether advanced, small modular reactors can be safe, cost-effective or even socially accepted as on-site or nearby power resources.

Diamondback Energy is focused entirely on the Permian Basin with a reported 1.8 billion barrels of oil equivalent proved reserves. Last month, news reports indicated that Diamondback and rival producer Endeavor Energy Resources were in final talks over a possible $50 billion merger.

 

About the Author

Rod Walton, Managing Editor | Managing Editor

For Microgrid Knowledge editorial inquiries, please contact Managing Editor Rod Walton at [email protected].

I’ve spent the last 15 years covering the energy industry as a newspaper and trade journalist. I was an energy writer and business editor at the Tulsa World before moving to business-to-business media at PennWell Publishing, which later became Clarion Events, where I covered the electric power industry. I joined Endeavor Business Media in November 2021 to help launch EnergyTech, one of the company’s newest media brands. I joined Microgrid Knowledge in July 2023. 

I earned my Bachelors degree in journalism from the University of Oklahoma. My career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World, all in Oklahoma . I have been married to Laura for the past 33-plus years and we have four children and one adorable granddaughter. We want the energy transition to make their lives better in the future. 

Microgrid Knowledge and EnergyTech are focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.

Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.

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