California Resources Corp. (CRC), the largest producer in the state, said it would capture carbon emissions at a planned blue hydrogen facility at the Elk Hills Field in Kern County.

CRC’s carbon dioxide (CO2) management agreement is with Carbon TerraVault JV Holdco LLC (CTV JV) and Lone Cypress Energy Services LLC.

“This CTV storage project is a meaningful step forward in CRC’s rollout of carbon capture and sequestration technology across the state and is the first of, what we believe, will be many projects to come,” CRC CEO Mac McFarland said. 

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CTV JV is a carbon management partnership focused on carbon capture and sequestration (CCS) development, and was formed between Carbon TerraVault (CTV), a subsidiary of CRC, and Brookfield Renewable. Lone Cypress is an independent energy company focused on developing low-carbon hydrogen generation facilities and energy infrastructure.

The project would sequester 100,000 metric tons/year of CO2 at the Lone Cypress hydrogen project. The plant is set to be California’s first blue hydrogen facility, with production of 30 tons/day and the potential to double output.

Blue hydrogen is produced from natural gas. The CO2 generated during the methane reforming process would be captured and stored permanently underground, CRC said. The project would employ a proprietary steam methane reformation technology with an integrated carbon capture system.

A final investment decision is targeted in late 2023, with full operations by the end of 2025, CRC said.

“California is at the forefront of the global energy transition and through this partnership, we intend to be a leader in its low-carbon fuels market,” said Lone Cypress President Greg Brooks. “We are excited to generate the first blue hydrogen molecule in the state of California and provide the market with a low-cost, low-carbon option to meet its decarbonization goals.”

The construction process and associated carbon capture infrastructure would provide at its peak about 125 temporary construction jobs and 18 permanent technical jobs, CRC said.

In CRC’s latest earnings call, McFarland said he saw “tremendous opportunity with the passing of the Inflation Reduction Act” and its associated expansion of Internal Revenue Service Section 45Q tax incentives for CCS.

CRC is aiming for full scope net-zero emissions by 2045. Executives said the global CCS project pipeline has grown by 44% in the last year.

The carbon capture strategy is in line with California’s drive to lower emissions. Last year, the California Energy Commission approved $1.4 billion in funding to build out the state’s electric vehicle charging and hydrogen refueling infrastructure.