California Resources Corporation (CRC) and its carbon management arm, Carbon TerraVault (CTV), announced the launching of California’s first carbon capture and storage (CCS) project at CRC’s Elk Hills cryogenic gas plant in Kern County. This is a huge milestone for reducing carbon emissions in the state.
Francisco Leon, CRC’s President and Chief Executive Officer, said,
“We are pleased to advance California’s first CCS project to the next stage of its development highlighting our ability to deliver carbon management solutions while reducing our own emissions. This project strengthens Carbon TerraVault’s economic opportunities and positions us to create lasting value for our shareholders and partners. Carbon TerraVault remains at the forefront of providing innovative decarbonization solutions that support a cleaner, affordable, and reliable energy future for California.”
Source: California Air Resources Board
Carbon TerraVault JV Powers California’s CCS Revolution
CTV is focused on capturing, transporting, and permanently storing carbon dioxide (CO2) emissions. It’s working on several CCS projects to sequester CO2 from industrial sources deep underground, permanently.
Moving on, the Carbon TerraVault Joint Venture (CTV JV) is a partnership between CTV LLC and Brookfield Corporation. CRC holds a 51% stake in the joint venture, with Brookfield owning the remaining 49%. Together, they are advancing CCS solutions for both CRC and other emitters in California. One such project is the 26R reservoir, a depleted formation within CRC’s Elk Hills Field.
Natalie Adomait, Managing Partner at Brookfield said,
“This announcement underscores California’s leadership in carbon capture and sequestration in the United States and reaffirms our commitment to collaborating with the right partners on impactful and economically viable energy solutions that advance the transition to net zero. Together with CRC, we are deploying our clean energy expertise to accelerate decarbonization and drive capital deployment across California’s critical industries.”
The press release highlighted CRC’s plans to begin permanently storing CO2 emissions at the Elk Hills oilfield near Bakersfield by the end of this year. The EPA approved its request to drill four Class VI injection wells, each over a mile deep on December 31, 2024.
- The storage site can hold approximately 38 million metric tons of CO2, with an annual capacity of 1.46 million metric tons.
The EPA also confirmed that the site meets safety standards and will not pose a risk to local drinking water supplies. This approval underscores the 26R reservoir’s importance in Kern County which is a prime hub for both agriculture and oil production.
source: CRC
Efficiency, Incentives, and Emissions Reduction in One Project
The project can capture and permanently sequester up to 100,000 metric tons (KMTPA) of CO2 annually. The captured carbon will be stored in the nearby 26R reservoir.
CRC anticipates several financial and environmental gains from this project:
- The project qualifies for 45Q tax credits, offering $85 per metric ton of CO2 stored. It may also benefit from Low Carbon Fuel Standard (LCFS) credits and reduced Cap-and-Trade (C&T) liabilities, depending on California Air Resources Board (CARB) rule updates.
- The proximity of the 26R reservoir minimizes transportation costs, ensuring cost-effective sequestration.
- Decarbonized gas processing will boost propane recovery by up to 100 barrels of natural gas liquids per day.
- The initiative can cut Scope 1 and 2 emissions from the Elk Hills Power Plant by up to 7%.
Investment and Profitability
Additionally, the capital investment for the capture infrastructure is estimated to be between $14–$18 million, ensuring cost-effective execution and long-term profitability.
The project is expected to deliver strong financial returns, with the joint venture anticipating sequestration revenue of $50–$60 per metric ton through fees paid by CRC. CRC forecasts a high internal rate of return, positioning it at the upper end of its 10%–30% range. This reflects the project’s economic viability.
CRC’s Net Zero Commitment Aligns with California’s Emission Reduction Goals
CRC believes climate change requires action from both government and the private sector. This is why it supports market-based solutions like CCS and direct air capture with storage (DAC+S), which benefit communities and society.
Its sustainability report reveals the commitment to the energy sector’s transition with a 2045 Full-Scope Net Zero goal, covering Scope 1, 2, and 3 emissions. The goal further aligns with California’s 2045 net zero ambition.
California’s Natural Resources Secretary, Wade Crowfoot elaborated,
“This project represents another step forward in California’s world-leading pathway to combat climate change and achieve carbon neutrality over the next two decades. While slashing carbon pollution is the main thrust of our climate programs, capturing and removing carbon from our atmosphere is also essential to meeting our carbon targets. This project, which repurposes fossil fuel extraction infrastructure and expertise to sequester carbon, is a forward-looking way to remove emissions while creating jobs in an emerging sector. Simply put, getting projects like this operating in a safe and effective way is critical for our climate progress.”
source: CRC
Additionally, combating methane emissions is a vital element of its net zero strategy. It aims to reduce methane emissions by 30% from the 2020 baseline by 2030.
CRC also plans to reduce freshwater use by 30% by 2025 which exceeds California’s 15% target. Moreover, it supplies more treated water to California districts than it uses. This is one of the ways the company is helping address the state’s water challenges.
source: CRC
Carbon capture technologies safely capture carbon from industrial processes or the air, then transport and store it permanently underground. Thus, CRC’s role in decarbonizing California is huge with this project in their priority.