California Resources Corp. (CRC) on Jan. 6 said the company approved its carbon capture and storage project at the Elk Hills cyrogenic gas plant, marking a first for the state. (Source: Shutterstock)
California Resources Corp. (CRC) on Jan. 6 said the company approved its carbon capture and storage project at the Elk Hills cyrogenic gas plant, marking a first for the state.
The approval by CRC and its carbon management business, Carbon TerraVault, followed receipt of required Class VI well permits for underground CO2 injection and storage from the U.S. Environmental Protection Agency.
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CRC will invest between $14 million and $18 million to capture CO2, the company said in a news release. The internal rate of return for the project is expected to be at the high-end of its previously disclosed range of 10% to 30%.
“This project strengthens Carbon TerraVault’s economic opportunities and positions us to create lasting value for our shareholders and partners,” said Francisco Leon, CRC’s president and CEO. “Carbon TerraVault remains at the forefront of providing innovative decarbonization solutions that support a cleaner, affordable and reliable energy future for California.”
CRC and partner Brookfield are targeting first injection in late 2025. Plans are to store up to 100,000 metric tons of CO2 per annum from the plant in Kern County into the 26R Reservoir. The reservoir, which is one of two depleted oil and natural gas reservoirs that make up the CTV I storage site, has an estimated capacity of up to 38 million metric tons of CO2.
“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,” said California Natural Resources Secretary Wade Crowfoot. “Simply put, getting projects like this operating in a safe and effective way is critical for our climate progress.”
The project is expected to lower Scope 1 and Scope 2 emissions from the Elk Hills Power Plant by up to 7%, according to CRC.
The JV anticipates generating EBITDA of $50 to $60 per metric ton in sequestration fees paid by CRC, the company said. It also anticipates the project will qualify for $85 per metric ton in 45Q tax credits.
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