How Kern County's Carbon Removal Industry Can Save California's Oil Country

Omar Hayat sees the future in a patch of dirt near Bakersfield, California, where oil was discovered more than a century ago. That discovery paved the way for Kern County’s lucrative petroleum industry. Now, Hayat hopes to use the same dirt patch to launch a new business — one that may help California reach its ambitious climate goals.

“We want to be accepted as a solution,” said Hayat, the executive vice president of operations at California Resources Corporation, one of the state’s leading oil producers.

Hayat is leading the company’s push to store climate-warming carbon more than a mile underground in the cracks and crevices of ancient rock formations. The firm is one of several companies developing plans to capture carbon from oil and gas plants and the air and store it deep beneath California’s oil country at the foot of the San Joaquin Valley.

Kern County is betting those projects will make it the center of California’s nascent carbon removal and storage industry. The county is already the state’s largest oil producer and a top producer of agricultural products, but climate change — and the state’s effort to mitigate it — threatens those economic mainstays. The county hopes the new carbon management industry will help make up for the hundreds of millions in tax revenue it anticipates losing by 2045 when California plans to phase out all oil drilling and eliminate most carbon emissions.

“Our economy is built on oil and agriculture. This is how we keep our libraries open. This is how we provide Meals on Wheels. This is how we provide our services to the million people here,” said Lorelei Oviatt, the county’s director of planning and natural resources.

In late December, Kern and the federal government took steps that could allow CRC to begin capturing and storing carbon next year. The county published its draft environmental review of the company’s project, and the U.S. Environmental Protection Agency said it plans to approve permits to allow CRC to inject carbon under an oil field.

Kern has found opportunity in renewable energy, becoming the state’s biggest producer of solar and wind energy. But the county’s push for carbon management amounts to a huge experiment — with its economy and community, as well as California’s climate commitments, hanging in the balance.

In the 900-page environmental assessment (PDF), Kern officials determined that CRC’s project is likely to have “significant and unavoidable” impacts on local air quality, even with measures taken to curb emissions. The report also notes the proximity of proposed pipelines to schools and neighborhoods. Those are among several issues likely to be contested when the public begins weighing in on the project this week.

Still, the county sees carbon management as critical to its future.

“It’s existential,” Oviatt said. “What is this place going to look like in 30 years? What’s it going to look like in five?”

‘Enormous Numbers’

In addition to moving quickly towards clean sources of energy, countries will need to remove carbon from the air (PDF) in order to avoid the worst effects of climate change, according to the IPCC, the United Nations panel that assesses the science of climate change.

Today, 41 commercial carbon capture facilities (PDF) are operating worldwide. Together, they have the capacity to capture much less than 1% of the emissions that countries produce every year — negating annual emissions equivalent to 49 million metric tons of carbon per year.

California, which has positioned itself as a global leader in climate action, wants to pull an unprecedented amount of carbon from the air — 100 million metric tons — by 2045. That represents nearly a quarter of the emissions the state produces today.

“Those are enormous numbers, relative to where not just California is today, but where the world is today,” said Michael Wara, director of the climate and energy policy program at Stanford University.

Still, the Biden administration is pouring billions into the carbon capture and storage industry, and Kern is racing to get a piece of it. Much of that money goes to regions led by Republican lawmakers who support boosting domestic energy production. Until he resigned from Congress last month, Bakersfield Republican and former House Speaker Kevin McCarthy represented much of Kern County.

Last year, the U.S. Department of Energy announced it would offer $3.5 billion for companies to demonstrate direct air capture, a process that sucks carbon from the air so that it can be stowed underground. The department recently said it would give $1.2 billion in grants for “Direct Air Capture hubs” in Louisiana and Texas.

Carbon removal projects proposed in California, all located in the conservative-leaning Central Valley, earned more than $20 million from the pool of federal funding for feasibility and planning studies, including roughly $12 million to a group led in part by CRC, Hayat’s company, and the city of Bakersfield. The amount is small compared to the billions to be disbursed elsewhere but significant enough to continue fueling ambitions in Kern.

Several other major oil and gas companies are also racing to launch their own carbon capture facilities in Kern, including Chevron and Aera Energy. Though certain details of CRC’s carbon removal proposal have not been made public, its ambitions center on a project called “Carbon TerraVault 1.” The project would be located in the Elk Hills Oil Field, one of the most productive in the nation, near the site where oil was discovered in 1911. The company wants to inject millions of tons of liquefied carbon a mile underground, beginning with carbon dioxide from the oilfield.

‘Looking for Hope’

If all of the projects proposed for the county come online, planning director Oviatt said Kern could be home to most of the storage required to achieve the state’s carbon removal goals. Oviatt frames the growth of this industry as inevitable. Even if the projects currently proposed don’t win regulatory approval, she’s confident that more proposals will follow them, she said at a recent public forum.

The county estimates that the carbon removal industry could generate as much as $64 million per year in tax revenues and create thousands of jobs. Kern envisions much of that money coming from a proposed Carbon Management Business Park, which it sees as a way to bring in emerging climate-friendly industries — including future direct air capture projects.

If the oil industry leaves Kern, more than 16,000 jobs could disappear, and the area’s already-high poverty and unemployment rates could climb. A county-commissioned study estimates the business park could support up to 22,000 permanent jobs, both in carbon removal and adjacent industries.

“That’s encouraging,” Oviatt said. “We are looking for hope.”

But realizing that vision is dependent on buy-in from the private sector. Oviatt said a handful of companies have expressed interest in the idea, but so far, none have submitted formal applications.

And community support for the county’s vision is hardly unanimous. At an October county Board of Supervisors meeting, residents and environmental activists expressed concerns about the need for pipelines to carry carbon across the state, which could rupture or leak.

They also questioned whether the proposed TerraVault and business park would worsen air quality. The American Lung Association consistently ranks Kern County’s air as among the most polluted in the country.

“It does not make sense to proceed with this park given the current health and air quality conditions in Kern County,” said Emma De La Rosa, an advocate with the Leadership Counsel for Justice and Accountability.

Other community organizers like Ileana Navarro with the Central California Environmental Justice Network called for greater transparency and questioned the technology’s track record.

“Projects worldwide have failed to live up to their promise on climate benefits, so why take the risk here in our backyards and in the backyards of already overburdened communities?” the Bakersfield resident asked.

The county’s environmental review shows that pipelines carrying carbon dioxide and injection sites are slated to sit within a few miles of a handful of elementary schools and a couple of towns.

Oviatt said that any future project would be located far away from neighborhoods to reduce the health risks to residents. But she was frank about the county’s prospects if a thriving carbon removal industry fails to take off in the region.

“I think we’re all concerned about our health, but we’re also concerned: Will Kern County survive these policies of the state of California?” Oviatt told the meeting. “I wanted to make sure the community understands that we are at a very, very difficult crossroads.”

Kern County’s ‘Gift From God’

Carbon can’t be injected and permanently stowed underground just anywhere, but the storage potential in the Central Valley is “a gift from God,” George Peridas, the energy program director at Lawrence Livermore National Laboratory, said at an April symposium on carbon management. The San Joaquin Valley is one of about three dozen areas nationwide with the potential to store the climate pollutant, according to assessments by the U.S. Geological Survey. That’s because, in theory, depleted oil and gas fields can make ideal reservoirs for captured carbon.

For decades, petroleum companies operating in the region have made billions pumping fossil fuels out of the ground. Now, these same corporations hope to also make money by pumping liquefied carbon back underground.

“It’s just like reconfiguring a Lego set,” Hayat, the oil executive, said. “Instead of using that CO2, for example, for increasing oil and gas production, we’re just putting it away for storage.”

But critics say it’s not so simple.

Storing carbon permanently and safely remains a complex technological challenge full of potential pitfalls. Extracting oil is different than ensuring carbon stays buried for thousands of years without leaking, according to Daniel Ress, a staff attorney at the Center on Race, Poverty and the Environment. California already has thousands of uncapped oil wells, many of which are leaking greenhouse gasses and other pollutants into the air. Ress is concerned that carbon stored underground could escape.

“I’m skeptical that this can be done well in this area where there’s so much oil and gas exploration,” Ress said.

Until now, oil companies have almost exclusively injected carbon to extract more oil from the earth. The CEO of Occidental Petroleum — CRC’s former parent company — said last year that carbon removal could give the petroleum industry “a license to continue to operate for the next 60, 70, 80 years.” California law prohibits companies from using captured carbon to enhance drilling in the state. Still, some environmentalists like Ress worry that injecting carbon could be used to extend the life of fossil fuels.

Several major obstacles remain on the path to building and operating carbon capture and storage plants. California has just one commercial carbon removal project in operation. The state has also banned new carbon pipelines until federal regulations are put in place, which could challenge CRC’s ambitious plans. Without pipelines to move the carbon from industrial centers to the vault, the company’s potential customer base is limited.

But last month, the county and the EPA’s actions boosted CRC’s hope for its TerraVault project. Company president and CEO Francisco Leon called the moves a “significant milestone” in attaining California’s “ambitious climate goals.”

Kern is the first county in the state to assess the environmental risks of a carbon storage project, working on the draft for about a year. Still, CRC’s project is facing a potentially lengthy approval process. The planning commission is expected to vote on the project in March, with a vote from county supervisors likely this summer.

This story is a collaboration between KVPR, Inside Climate News, the Investigative Editing Corps and Report for America.

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