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    1. Energy Efficiency

    Brookfield investing $500M in California Oil and Gas firm's Carbon Capture effort

    Aug. 5, 2022
    The joint venture aims to inject 5 million metric tons per annum and a total of 200 million metric tons of CO2 storage development
    Image credit Fluor
    Kern Ccs 62ed0b0a0c0d3

    Oil and gas firm California Resources Corporation has formed a carbon management partnership with Brookfield Renewable for carbon capture and sequestration development.

    Brookfield will make an initial investment of $500 million through the Brookfield Global Transition Fund in the CCS projects which will be jointly approved through the JV, 51% owned by CRC.

    The first CCS project to be undertaken under the JV is the 26R reservoir in the Elk Hills Field, contributed to the partnership at $10 per metric ton. It will be paid in three instalments and the last two instalments will be subject to achieving certain milestones.

    The JV aims to inject 5 million metric tons per annum and a total of 200 million metric tons of CO2 storage development, in line with the CRC’s 2027 goals.

    The firm will require a total capital of $2.5 billion to achieve these targets. Brookfield’s initial commitment will de-risk CRC’s projects and enable the progress towards decarbonization of California.

    The state is a world-leading location for the development of CCS projects due to its Low Carbon Fuel Standard and Cap-and-Trade programs as well as the federal 45Q tax credit of $50 per ton of CO2 captured and permanently stored.

    At present, CRC is progressing on the CO2 storage project permit applications, representing four out of the five Class VI well project applications in the state.

    The CRC will commit $2.5 million over the next three years to the California State University Bakersfield and the the Kern Community College District for the implementation of energy transition in the state.

    "We are pleased to partner with Brookfield to develop industry leading CCS projects that support California's energy transition," said Mac McFarland, CRC’s President and Chief Executive Officer. "The Brookfield partnership aligns our carbon management strategy with a strong investment partner, bringing significant operational and development expertise to reinforce our efforts. Brookfield's capital commitment also accelerates our carbon management opportunities. It also enables CRC to maintain capital discipline and financial flexibility to achieve our corporate objectives including achieving our Full-Scope Net Zero 2045 goal."

    Elsewhere in California, Chevron U.S.A. is developing a carbon capture and storage (CCS) project through its Chevron New Energies division at the Kern River Eastridge cogeneration plant in California (pictured).