CRC signs its first carbon management deal outside Kern | News

A familiar name in local energy has signed on for another of the carbon management projects Kern is becoming known for — but for one main reason, the work won’t happen inside the county.

Oil producer California Resources Corp. said Wednesday one of its subsidiaries has agreed to sequester carbon dioxide from what’s known as a blue hydrogen and ammonia plant that will make nitrogen-based fertilizer for California farmers. The announcement came less than a month after CRC unveiled a similar project that would be part of a large CO2 injection hub in western Kern.

Why not bury the CO2 in Elk Hills, like the other project? Because, first of all, the fertilizer plant is being built in San Joaquin County.

And why not pipe the gas south from the Stockton area to western Kern, then bury it in a vast, depleted oil reservoir as part of what’s expected to be a regional center for such activity?

CRC anticipated the question. In a news release, it said sending the gas south would cost too much, and so instead it will apply its injection expertise in Northern California.

“The project’s location in proximity to (CRC’s proposed injection site in Northern California) will eliminate the need for long haul CO2 transportation and certain midstream capital requirements,” CRC said in the release.

A CRC spokeswoman said the deal with Grannus LLC, headquartered in Tucson, Ariz. is the first carbon dioxide management agreement outside Kern County for its subsidiary Carbon TerraVault Holdings LLC. None of the associated projects have yet begun construction, but planning work is further along for CRC’s Elk Hills carbon capture and sequestration work.

Grannus expects to produce 150,000 metric tons per year of ammonia and 10,000 metric tons of hydrogen, both sourced from natural gas, hence the blue designation. The company said in Wednesday’s news release the plant’s output is expected to supply the ag, mobility and marine fuel markets.

The operation is considered virtually emissions free, the release said, because 370,000 metric tons per year of carbon dioxide from the process will be transported and buried by Carbon TerraVault, for a fee, at a location not far from the fertilizer plant in San Joaquin County .

Grannus’ CEO said the company was excited to partner with “such a knowledgeable carbon management provider as Carbon TerraVault due to their unique vault positioning in the heart of Northern California’s industrial sectors, strong subsurface expertise and their leadership in California’s new energy economy and carbon management .”

“California’s first blue ammonia fertilizer production facility is expected to further reduce the carbon intensity of California’s agricultural sector while delivering environmentally conscious food to every American’s doorstep. We look forward to furthering our decarbonization efforts in California,” CEO Matthew Cox said in the release.

CRC President and CEO Mac McFarland said in the release of the partnership begins a “new chapter” of carbon storage in Northern California.

“We are thrilled for the expansion of our decarbonization efforts in Northern California where we see an incredible amount of carbon capture and storage (CCS) opportunities,” McFarland stated.

A deadline for moving forward with the investment has not been finalized, but the release said the expectation is that the project will become commercial before 2028.

On Dec 7, CRC unveiled a deal with Tulsa, Okla.-based Lone Cypress Energy Services LLC to build California’s first blue hydrogen project, whose CO2 would be injected for permanent storage in the Elk Hills Oil Field.

Assuming the investment gets greenlighted later this year, the Lone Cypress Hydrogen Project would initially produce 30 tons per day of hydrogen for use in transportation or industrial applications, along with 100,000 metric tons per year of carbon dioxide. The volumes could be doubled if a decision is made to expand the plant, which is projected to create up to 125 temporary construction jobs and as many as 18 permanent positions.

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