U.S. EPA Releases Draft Class VI Permits to CRC’s Carbon TerraVault for CO2 Injection and Storage in California
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Insights
The Environmental Protection Agency's (EPA) issuance of draft Class VI well permits for California Resources Corporation (CRC) and Carbon TerraVault (CTV) represents a pivotal advancement in the realm of carbon capture and storage (CCS), a technology that is increasingly integral to climate change mitigation strategies. The permits facilitate the injection and storage of carbon dioxide in depleted oil and natural gas fields, a method that leverages existing geological formations for environmental benefit.
The environmental economic implications of this development are multifaceted. In the short-term, the project is expected to create job opportunities within the clean energy sector, potentially stimulating local economies in Kern County. The injection rate of 1.46 million metric tons of CO2 per year, with an estimated capacity of 38 million metric tons, could contribute significantly to California's climate goals, potentially establishing a model for other states to follow.
In the long-term, successful implementation of CCS at the Elk Hills Field could lead to widespread adoption of this technology, reducing the carbon footprint of industrial activities. However, the costs associated with CCS development and the long-term viability of such storage methods must be carefully considered. Economically, the trade-offs between investment in CCS and other renewable energy sources will be a subject of analysis for stakeholders.
From an industry perspective, the draft permits for underground CO2 sequestration using depleted oil and natural gas fields are an innovative approach to CCS. This initiative by CRC and CTV is a first in the nation, potentially setting a precedent for the energy sector. The Elk Hills Field's designation as a 'premier CO2 sequestration site' underscores the strategic importance of the location.
Industry stakeholders will monitor the progress of these projects closely, as they could influence future investments in CCS technology and infrastructure. The collaboration with clean technology companies suggests a potential shift in the energy industry towards more sustainable practices. However, the success of such projects depends on technological efficacy, regulatory compliance and market receptivity to CCS as a viable climate solution.
Moreover, the public review and comment period for the EPA permits indicates a level of transparency and community engagement that is essential for the social acceptance of CCS projects. The industry will benefit from observing the public's response to these developments, as it may shape future regulatory and community relations strategies.
The EPA's draft permits for CRC's CCS project have significant implications for energy policy, particularly in the context of California's aggressive climate goals. The policy framework that allows for the conversion of depleted hydrocarbon reservoirs into carbon storage facilities is an example of innovative regulatory adaptation to new environmental technologies.
As an energy policy expert, it is evident that this move aligns with broader policy initiatives aimed at reducing greenhouse gas emissions. The policy support for such projects could serve as a catalyst for similar initiatives in other regions, potentially influencing national energy policy. The role of public review and the 90-day comment period are also critical in ensuring that policy decisions are made with community input, which is essential for the long-term success and legitimacy of such projects.
It is important to note that while the project offers substantial capacity for CO2 storage, the regulatory, environmental and social hurdles must be navigated carefully. The policy implications extend beyond the immediate project, as success or failure could impact future legislative actions and public perception of CCS as a tool for combating climate change.
Milestone Represents Nation’s First for Use of Depleted Oil and Natural Gas Fields to Capture CO2
The proposed wells are California’s first draft permits for underground CO2 sequestration, as well as the first draft permits utilizing a depleted oil and natural gas field in the
“This is a significant milestone for
The 26-R reservoir at Elk Hills has an expected injection rate of 1.46 million metric tons (MT) per annum and a total estimated capacity of up to 38 million MT. The reservoir is part of CTV I which has a total estimated storage of up to 46 million MT. The Elk Hills Field spans nearly 75 square miles and is of particular focus for future CCS projects due to its significant storage potential through multiple depleted hydrocarbon reservoirs and its industrial location. The California Energy Commission has referred to the Elk Hills Field as “one of the premier CO2 sequestration sites in the
The draft EPA permits are available for public review and comment for the next 90 days. CTV is committed to continuing its engagement with
About Carbon TerraVault
Carbon TerraVault (CTV) is CRC’s carbon management business and is developing services to capture, transport and permanently store CO2 for its customers. CTV is engaged in a series of CCS projects that will inject CO2 captured from industrial sources into depleted underground reservoirs and permanently store CO2 deep underground. For more information, visit www.carbonterravault.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that CRC believes to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts are forward-looking statements, and include statements regarding CRC's future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and plans and objectives of management for the future. Words such as "expect," "could," "may," "anticipate," "intend," "plan," “ability,” "believe," "seek," "see," "will," "would," "estimate," "forecast," "target," "guidance," "outlook," "opportunity" or "strategy" or similar expressions are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Although CRC believes the expectations and forecasts reflected in its forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond CRC's control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause CRC's actual results to be materially different include: (i) EPA’s decision to issue or withhold final Class VI permits and the availability or timing of, or conditions imposed on, any final Class VI permits issued to CRC; (ii) regulatory actions and changes that affect CRC, including any other permits and approvals necessary for CRC's carbon management business; (iii) CRC's ability to claim and utilize tax credits or other incentives in connection with its CCS projects; (iv) CRC's ability to realize the benefits contemplated by its energy transition strategies and initiatives, including CCS projects and other renewable energy efforts; (v) CRC's ability to successfully identify, develop and finance carbon capture and storage projects and other renewable energy efforts including those in connection with the Carbon TerraVault; (vi) CRC's ability to convert its Carbon Dioxide Management Agreements (CDMAs) to definitive agreements and enter into other offtake agreements; (vii) CRC's ability to maximize the value of its carbon management business and operate it on a stand-alone basis; (viii) CRC's ability to successfully develop infrastructure projects and enter into third party contracts on contemplated terms; and (ix) those expressed in its forward-looking statements include those factors discussed in Part I, Item 1A – Risk Factors in CRC's Annual Report on Form 10-K and its other SEC filings available at www.crc.com. CRC cautions you not to place undue reliance on forward-looking statements contained in this press release, which speak only as of the filing date, and CRC undertakes no obligation to update this information. This press release may also contain information from third party sources. This data may involve a number of assumptions and limitations, and CRC has not independently verified them and do not warrant the accuracy or completeness of such third-party information.
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Richard Venn (Media)
818-661-6014
CRC.Communications@crc.com
Joanna Park (Investor Relations)
818-661-3731
Joanna.Park@crc.com
Source: California Resources Corporation
FAQ
What are the details of the draft Class VI well permits received by California Resources Corporation (CRC) and Carbon TerraVault (CTV)?
What is the expected injection rate and total estimated capacity of the 26-R reservoir at the Elk Hills Field?
Why is the Elk Hills Field considered an optimal site for the safe and secure sequestration of CO2?
What are the expected outcomes of the partnership between CTV and clean technology companies for greenfield projects at Elk Hills?
