Carbon TerraVault
CRC launched Carbon TerraVault (CTV) as part of its carbon management business in 2021 to help advance the energy transition and curb rising global temperatures at 1.5°C. We aim to do this by building scalable, low-carbon, and cost-effective solutions and bringing rewarding jobs to our local communities.
CTV will provide services that include the capture, transport and storage of carbon dioxide (CO2) for its customers. CTV is developing CCS and direct air capture plus storage (DAC+S) projects that inject CO2 captured from industrial sources into depleted underground reservoirs and permanently store CO2 deep underground.
CRC has identified up to 1 billion metric tons of CO2 permanent storage capacity across California that will help contribute to the decarbonization of the state. CRC has applied for several permits for permanent CCS vaults at the Elk Hills Field in Kern County and in the Sacramento Basin in Northern California.
Learn more by downloading our Carbon TerraVault fact sheet, available in English (PDF) and Spanish (PDF).
Carbon management is a natural extension of CRC’s core competencies and a pillar of our 2045 Full-Scope Net Zero goal for Scope 1, 2 and 3 emissions. Adopted in November 2021, CRC’s Net Zero goal places the company among a select few industry peers to include scope 3 emissions in their Net Zero goal. Learn more about our ESG Goals page in our ESG section.
California Carbon
Management Partners
In August 2022, CRC entered into a joint venture (JV) with Brookfield Renewable (Brookfield) focused on CCS development opportunities.
Brookfield has committed an initial $500 million to invest in CCS projects that are jointly approved through the JV. The investment from Brookfield will be allocated through the Brookfield Global Transition Fund (BGTF), the world’s largest fund dedicated to facilitating the global transition to a net zero carbon economy. Brookfield, together with its institutional partners, will participate in the joint venture through BGTF.
The first CCS project designated for development is CRC’s 26R reservoir in the Elk Hills Field which was contributed to the partnership at a value of $10 per metric ton. The initial Brookfield commitment of $500 million provides CRC with additional capital to advance the Company's carbon management strategy, de-risks its CCS projects and aims to significantly progress the decarbonization of California. The JV is 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. Reaching this target would require an estimated $2.5 billion of total capital, and Brookfield could make additional investments of more than $1 billion in the strategic partnership assuming it fully participates in these CCS projects.
The strategic partnership will benefit substantially from CRC’s first mover advantage in gaining access to available storage assets in the state of California and Brookfield’s knowledge in global clean energy markets. California is a world-leading location for the development of CCS projects, driven by the state’s Low Carbon Fuel Standard and Cap-and-Trade programs, together with the federal 45Q tax credit of $50 per ton of CO2 captured and permanently stored. CRC is currently progressing CO2 storage project permit applications and represents four out of the five Class VI well project applications on file in California.
The strategic partnership will involve developing both infrastructure and storage assets required for CCS projects in California through newly created joint venture entities, Carbon TerraVault JV HoldCo, LLC (HoldCo), Carbon TerraVault JV Storage Company (StorageCo) and Carbon TerraVault JV Infrastructure Company, LLC (InfraCo).
- StorageCo will build, install, operate, and maintain CO2 storage facilities. CRC has contributed the storage rights in the 26R storage reservoir in the Elk Hills field to a wholly owned subsidiary of StorageCo.
- InfraCo will build, install, operate, maintain CO2 capture equipment and transportation assets, and provide funding as projects develop.
- StorageCo and InfraCo are wholly owned by HoldCo.
For more information, view the California Carbon Management Partnership presentation (PDF).
Partnership Highlights
Source: CRC unless otherwise stated. (1) Brookfield Global Transition Fund. Initial commitment applies to CCS projects that are jointly approved through the CTV JV. (2) EBITDA is a non-GAAP measure. For all historical nonGAAP financial measures please see the Investor Relations page at www.crc.com for a reconciliation to the nearest GAAP equivalent and other additional information. Note CTV JV EBITDA estimates include 45Q tax credits. See slides 27, 28 and 38 of CRC’s 3Q22 Earnings slides for detailed information on the previously disclosed Type Curve. (3) Source: Inflation Reduction Act. (4) Source: Energy Futures Initiative and Stanford University. “An Action Plan for Carbon Capture and Storage in California: Opportunities, Challenges, and Solutions.” October 2020; EPA; NATCARB; CARB; Internal estimates; Includes Brownfield and Greenfield opportunities; CARB Scoping Plan: AB32 Source Emissions Final Modeling Results, October 28, 2022; Department of Energy Hydrogen Program Plan, U.S. Department of Energy, November 2020. Converted from CARB’s estimated 13% of U.S. hydrogen demand of 21 – 44MMTPA. (5) Draft permit expected by YE23, but is subject to EPA approvals and public review. FID subject to permit approvals.
Project Support
Carbon TerraVault appreciates the support of the following:
