California Resources Corporation (CRC), together with its carbon management subsidiary Carbon TerraVault (CTV), has announced the approval of the state’s first-ever carbon capture and storage (CCS) project, located at CRC’s Elk Hills Cryogenic Gas Plant in Kern County, California.
A Major Step Toward Decarbonization
The CCS project will capture and inject 100,000 metric tons of CO2 annually into the 26R reservoir at Elk Hills. This would be a big deal for California, which intends to reduce its greenhouse gas emissions so that it becomes carbon neutral in 20 years.
CRC CEO Francisco Leon 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.”
He added, “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.”
The approval comes after CRC received Class VI well permits from the EPA for underground CO2 injection and storage. This CRC and Brookfield joint venture captures carbon using existing infrastructure, injecting it into depleted oil reservoirs for decarbonization.
Additionally, the project will create green jobs in carbon capture, supporting California’s leadership in climate innovation and sustainable technology.
Also read: CRC Secures First-Ever EPA Class VI Permits for CO2 Storage
Project Details and Financial Highlights
The CTV I storage site includes the 26R reservoir in Kern County, one of two depleted oil and gas reservoirs. The 26R reservoir can inject 1.46 million metric tons of CO2 annually, with a total capacity of 38 million.
The project will capture and store 100,000 metric tons of CO2 annually, with operations set to begin by late 2025. CRC expects $85 per metric ton in 45Q tax credits, plus potential LCFS credits and reduced Cap-and-Trade liabilities. The sequestration fees will generate $50–$60 per metric ton, with CRC’s return rate likely exceeding 30%. Additionally, the project’s proximity to the 26R reservoir will minimize transportation costs, enhancing its overall profitability.
The capture project will cost between $14 to $18 million in capital spending. The project will also cut Scope 1 and 2 emissions at Elk Hills Power Plant by 7%, helping CRC meet carbon goals.