Carbon TerraVault: A Beacon of Hope in California's Carbon Neutrality Journey

Carbon TerraVault (CTV), a subsidiary of California Resources Corporation (CRC), has provided a comprehensive update on its 2024 progress, demonstrating significant strides in its mission to capture, transport, and store carbon dioxide (CO2) emissions, contributing to California's emissions reduction goals under the Paris Climate Accord. With a focus on practical and financial aspects, this article explores the key developments, partnerships, and future prospects of CTV's carbon management business.

In 2024, CTV has made substantial progress in obtaining necessary permits and approvals for its CCS projects. The Environmental Protection Agency (EPA) released California's first draft Class VI well permits for underground CO2 injection at the 26R storage vault, located at the proposed Clean Energy Park at Elk Hills Field in Kern County. Additionally, Kern County released the draft Environmental Impact Review (EIR) for the same project, subject to public review and comment. These developments indicate that CTV is on track to secure the required permits for its CCS projects, paving the way for further expansion and implementation.

CTV's funding and grants have also seen significant growth in 2024. The company was awarded two DOE research and development grants under the CarbonSAFE initiative for a total of approximately $18 million. These grants will support research and development projects aimed at de-risking carbon storage. Furthermore, California DAC Hub, led by CTV's subsidiary CTV Direct, LLC, was selected to receive approximately $12 million in DOE funding for a regional initiative focused on the development of California’s first full-scale DAC plus storage (DAC+S) network. These funding sources will enable CTV to advance its CCS projects and attract additional capital.

In terms of project development, CTV has announced its first capture-to-storage project at CRC's Elk Hills cryogenic gas plant, located in Kern County. This project is expected to sequester 100 thousand metric tons per year (KMTPA) of CO2 in the 26R reservoir by year-end 2025. Additionally, CTV signed 760 KMTPA of storage-only Carbon Dioxide Management Agreements (CDMAs) with several greenfield project developers, helping to decarbonize California’s energy value chain. These achievements demonstrate CTV's commitment to reducing greenhouse gas emissions and supporting California's carbon neutrality goals.

The collaboration with Brookfield Renewable and other partners has significantly influenced CTV's project development and funding in 2024. In August 2022, CRC entered into a joint venture (JV) with Brookfield Renewable, focused on CCS development opportunities. Brookfield committed an initial $500 million to invest in CCS projects through the Brookfield Global Transition Fund (BGTF). This investment has provided CRC with additional capital to advance its carbon management strategy, de-risk its CCS projects, and significantly progress the decarbonization of California. The first CCS project designated for development under this JV is CRC's 26R reservoir in the Elk Hills Field, targeting the injection of 5 million metric tons per annum and 200 million metric tons of total CO2 storage development, aligned with CRC’s 2027 goal.

In conclusion, Carbon TerraVault's 2024 update showcases the company's significant progress in obtaining permits, securing funding, developing projects, and growing its team. Through strategic partnerships and collaborations, CTV is well-positioned to continue advancing its carbon management strategy and contributing to California's emissions reduction goals under the Paris Climate Accord. With a cautious optimism, CTV's approach to the project reflects the company's commitment to practical and financial aspects, ensuring a balanced view of potential and challenges in the pursuit of a low-carbon future.