Shovels Hit the Ground on California’s First Carbon Storage Hub

In Kern County, California, shovels hit the ground on October 16, 2025, marking a turning point for carbon management on the West Coast. California Resources Corporation (CRC) and Brookfield officially launched construction on Carbon TerraVault I (CTV I), the state's first commercial-scale carbon capture and storage project. The ceremony brought together state regulators, local officials, and industry leaders at the Elk Hills Field, signaling that California's carbon storage ambitions are moving from blueprints to reality.

CTV I will store up to 1.6 million metric tons of CO₂ annually, with a total capacity of 38 million metric tons in the 26R reservoir. First injection is scheduled for early 2026. This timeline puts California ahead of several other states competing to establish commercial CCS infrastructure, particularly as federal funding for carbon removal projects faces mounting uncertainty.

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From Permits to Pavement

The project didn't just clear regulatory hurdles—it demolished them. CTV I became the first facility in California to receive final Class VI permits from the U.S. Environmental Protection Agency. These permits set the gold standard for carbon sequestration, requiring rigorous evaluation to ensure long-term safety and containment. The Kern County Board of Supervisors also gave the project unanimous approval, clearing local regulatory pathways that have stalled other carbon storage initiatives.

The partnership between CRC and Brookfield formed the Carbon TerraVault Joint Venture, with CRC holding 51% and Brookfield owning 49%. Brookfield brings its institutional investment muscle, while CRC contributes decades of subsurface expertise from oil and gas operations. That combination proved essential for navigating California's complex permitting landscape and securing the infrastructure needed to move forward.

Why Elk Hills Makes Sense

Location matters in carbon storage, and Elk Hills checks the right boxes. The site sits on existing oil and gas infrastructure, including wells, pipelines, and monitoring equipment that can be repurposed for CO₂ injection. This dramatically reduces capital costs compared to greenfield projects. The geology is well-mapped from decades of energy production, giving engineers detailed subsurface data that's essential for safe, long-term carbon storage.

Depleted oil and gas reservoirs make ideal storage sites because they've already proven they can trap fluids for millions of years. The 26R Monterey Formation reservoir at Elk Hills has the right combination of porosity for holding CO₂ and cap rock to prevent leakage. CRC's decades of operational experience at this site provides confidence that injection and monitoring can be managed safely.

Following the Carbon Pipeline

CTV I will initially capture CO₂ from CRC's own operations, including the Elk Hills cryogenic gas plant. But the real business model extends beyond self-capture. The facility is designed to accept third-party carbon from industrial emitters across California, positioning Carbon TerraVault as a service provider for hard-to-decarbonize sectors like cement, power generation, and chemicals.

California recently passed legislation enabling CO₂ pipelines, which will be critical for connecting capture facilities to storage sites. CTV I is positioned to become an anchor point in California's emerging carbon transport infrastructure. As more industrial facilities add capture equipment, they'll need somewhere to send that CO₂, and CTV I offers permitted, operational storage capacity.

The Federal Credit Factor

The economics of carbon storage rely heavily on the federal 45Q tax credit, which provides up to $85 per ton for CO₂ stored in saline formations and $60 per ton for storage in oil and gas reservoirs. These credits can be transferred to investors, allowing project developers to monetize them even if they don't have sufficient tax liability. This transferability mechanism has proven essential for getting CCS projects to final investment decision.

California also offers its own incentives through the Low Carbon Fuel Standard and Cap-and-Invest programs. These state-level mechanisms create additional revenue streams that aren't dependent on federal policy shifts. Combined with voluntary carbon markets, CTV I has multiple pathways to generate revenue from stored carbon.

Community Benefits and Local Support

Kern County has been an energy hub for over a century, and CTV I represents the latest chapter in that story. The project is expected to create construction jobs during buildout and permanent technical positions once operational. CRC has committed to a Community Benefits Plan that includes workforce development programs in partnership with local colleges and training centers.

Local officials have embraced the project as a way to maintain the region's energy economy while transitioning to lower-carbon operations. Taft Mayor Dave Noerr highlighted the area's history of energy innovation, noting that carbon storage represents a continuation of that legacy rather than a departure from it.

California's Broader Carbon Strategy

CTV I doesn't exist in isolation. It's part of California's comprehensive approach to carbon management that includes direct air capture, industrial point-source capture, and carbon utilization projects. The California Air Resources Board has set targets of capturing 20 million metric tons of CO₂ annually by 2030 and 100 million metric tons by 2045.

Meeting those targets will require multiple storage facilities beyond CTV I. CRC has submitted seven additional Class VI permit applications to the EPA, representing about 287 million metric tons of potential storage capacity. The company has identified up to 1 billion metric tons of CO₂ storage potential across California's depleted oil and gas fields.

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What Happens Next

Construction work at CTV I will focus on installing injection wells, monitoring equipment, and compression facilities. The project will use CRC's existing infrastructure where possible, but new equipment is needed to handle the specific requirements of CO₂ injection. Engineers will monitor reservoir pressure, injection rates, and subsurface movement to ensure the stored carbon remains permanently sequestered.

Once operational, CTV I will serve as a proving ground for commercial-scale carbon storage in California. The data collected from this project will inform permitting, design, and operations for future facilities. Success here could accelerate deployment across the state and attract additional private investment into California's carbon management sector.

The race to establish carbon storage infrastructure is intensifying across North America. Texas, Louisiana, and Wyoming are all advancing major projects, while Canada's Alberta province has established significant storage capacity. California's move with CTV I demonstrates that state-level policy and private investment can drive carbon management forward even amid federal uncertainty. For industrial emitters looking to reduce their carbon footprint, the message is clear: storage solutions are becoming real, operational, and ready to accept CO₂.