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CRC is applying for a permit to arrest and store carbon in East Kern

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August. 6 – Domestic oil producer California Resources Corp. said this week it has applied for a federal permit to arrest and bury up to 10 million metric tons of carbon dioxide in a depleted oil and gas reservoir in the Elk Hills area near Tubman.

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Its previous proposal to arrest and use carbon dioxide rising from the chimneys of its Elk Hills power plant would likely jump out, and the CRC said the unused proposal could start pumping out about 1 million metric tons per year of carbon dioxide — 2.2 billion pounds, or roughly the equivalent of Annual emissions of about 200,000 passenger cars – within four years.

By October, the company plans to apply for another permit from the US Environmental Protection Agency to operate a similar carbon arrest and sequestration facility nearby that would bring the project’s capacity to 40 million metric tons.

The joint project, called Carbon TerraVault I, could become the first to take advantage of what scientists see as Kern County’s massive potential to absorb greenhouse gases from the atmosphere and permanently store them underground as a way to slow climate change.

Locally, there has been talk of using the province’s industrial expertise to manage carbon arrest and storage projects, which are seen as costly and energy-intensive. To date, CRC is the only domestic company that has publicly proposed such a project.

“CRC is elated to be the number one driver of carbon arrest and sequestration in California and to aid the state make progress on its carbon impartial goals,” the Santa Clarita-based company said in a Thursday news release.

A spokeswoman for the California State Energy Commission said Friday that county department officials are aware of the project but that neither agency will have an official role in reviewing or approving it. She noted that a multi-agency group is considering CCS and that it may be brought up during the California Air Resources Board’s upcoming climate change scoping plan update process.

CRC President and CEO Mark A. “Mac” McFarland said during an earnings call Thursday that the company has not yet settled on how to obtain, arrest or transfer carbon at the facility. But he said the data, studies and analyzes support the feasibility of the project, presenting a partial financial status of the project.

MacFarland said the California Low Carbon Fuel Standard can be relied upon to preserve about $200 per ton of carbon sequestered. This does not include what he said is a federal tax credit of up to $50 per ton, for annual revenue and savings of about $250 million in TerraVault I. He did not provide an estimate of what it would cost to build or operate the facility.

He told analysts that CRC has a major advantage over its competitors in the emerging field of CCS, where the company has depleted oil reservoirs where carbon will be stored. Anyone else trying to purchase such a tank would have to spend one to two years doing it. In addition, competitors in other states will not be competent to access revenue from California’s LCFS program, McFarland added.

Carbon TerraVault I wouldn’t necessarily forbid CRC from moving forward with its earlier proposal to remove CO2 from the emissions stream for the 550-megawatt Elk Hills power plant. But MacFarland described that earlier project, called CalCapture, as more complicated. He confirmed that CalCapture is still being evaluated by the company.

CalCapture will use CO2 to aid CRC produce oil in Elk Hills because the soda gas makes the crude oil less viscous and easier to extract.

“We persevere to move forward with the CalCapture project, but it has a distinct economic range than our CCS project,” he said.

In January 2020, scientists at Lawrence Livermore National Laboratory released a study concluding that California could meet its combative climate goal by burying or offsetting 125 megatonnes per year of carbon dioxide. He specifically mentioned the enormous geological capacity of Kern County’s oil formations to permanently store carbon dioxide.


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