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AI Power Demand Could Supercharge CRC's Power-to-CCS
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Key Takeaways
CRC sees AI and grid trends driving demand for low-carbon power and carbon storage solutions.
A JV with Brookfield funds early CCS rollout, backed by $2.5B in planned investment and pore space assets.
CRC secured key EPA and county permits, lowering risk for early projects and 2026 carbon injection goals.
California’s electrification push is colliding with AI’s compute boom. That combination could be catalytic for California Resources Corporation ((CRC - Free Report) ) as it links dependable power with carbon capture and storage (CCS).
The company’s Carbon TerraVault platform, supportive regulations and a capital-light partnership create a clear path toward initial carbon storage operations in 2026, with room to expand over time.
Rising Load Creates New Monetization Paths
CRC points to a growing shift in global AI spending toward inference, which increases the need for fast, reliable power close to where people live and work. In California, grid capacity could nearly double by 2035, helped by new utility connections and procurement programs. Together, these trends broaden opportunities for “power-to-CCS” solutions serving utilities and data centers.
Rising in-state demand and supportive regulations also strengthen CRC’s ability to pair dependable, lower-carbon power with nearby storage sites, especially around PG&E Corporation’s ((PCG - Free Report) ) expanding interconnect network for new data centers.
Power-to-CCS Platform in Kern County
CTV and Capital Power signed an MOU to evaluate CCS at the La Paloma combined-cycle plant and to study data-center adjacency, permitting and integration. The opportunity sits near 2.4 GW of baseload capacity, with potential capture up to 3 million metric tons per year and power capacity up to some 1.1 GW.
Capital Power operates roughly 12 GW across North America, adding an experienced power partner to CRC’s storage footprint. The Kern County cluster also benefits from proximity to gas pipelines, interconnection, water and major fiber networks — key siting factors for data-center-ready CCS.
Permit Progress De-Risks Early Projects
CRC secured California’s first Environmental Protection Agency (EPA) Class VI permits for CTV I-26R and received county conditional use permit approvals for the broader CTV I project. The Elk Hills Cryogenic Gas Plant CCS project is approved, and additional Class VI draft permits are anticipated as part of a multi-reservoir pipeline.
Taken together, the permits and county actions reduce early execution risk and support higher-confidence timelines as CRC sequences reservoirs across Central and Northern California.
JV Structure Lowers Capital Intensity
CRC’s partnership with Brookfield plans to inject about 5 million metric tons of CO2 per year by the end of 2027, backed by $2.5 billion in total investment, split evenly between debt and equity. Brookfield contributes pore space valued at about $980 million, while CRC is expected to invest $637 million. That setup leaves roughly $343 million available to support early carbon management spending.
This structure largely covers CRC’s equity needs for the first approved projects under the CTV joint venture, giving the company more flexibility for shareholder returns and future low-carbon power growth.
Economics Favor Mid to High Concentration Streams
The economics are most attractive when CO2 streams have medium to high concentrations, since capture costs are lower and projects are easier to finance. Storage-only projects need less upfront spending but also generate smaller returns, while low-concentration sources like gas power plants become viable only as technology improves and incentives grow.
This cost curve shapes CRC’s priorities. Early Power-to-CCS projects are likely to focus on higher-concentration sources first, with smaller add-ons added over time as capture technology gets better.
Emissions Credibility Enhances Offtake
CRC earned MiQ “Grade A” methane certifications for both the Los Angeles Basin (2024) and Ventura Basin (2025) and remains the only oil and gas producer in California and the Rocky Mountain region with MiQ certification. That third-party verification strengthens CRC’s low-emissions narrative when negotiating with CCS customers and power partners.
Management also notes ongoing work with MiQ to expand certifications statewide, reinforcing the company’s decarbonization brand as CTV commercializes.
What Investors Should Watch Next
Key milestones to watch include the expected closing of the Berry merger, which management believes can deliver meaningful annual cost savings, the first carbon capture and storage injection planned for early 2026 at Elk Hills, and upcoming EPA Class VI permit decisions for several storage sites.
In parallel, any final-investment-decision milestones tied to the Power-to-CCS corridor or data-center-adjacent projects would help quantify forward earnings streams. For portfolio context, CRC currently carries a Zacks Rank #4 (Sell).
California Resources Corporation Price and Consensus
Image: Bigstock
AI Power Demand Could Supercharge CRC's Power-to-CCS
Key Takeaways
California’s electrification push is colliding with AI’s compute boom. That combination could be catalytic for California Resources Corporation ((CRC - Free Report) ) as it links dependable power with carbon capture and storage (CCS).
The company’s Carbon TerraVault platform, supportive regulations and a capital-light partnership create a clear path toward initial carbon storage operations in 2026, with room to expand over time.
Rising Load Creates New Monetization Paths
CRC points to a growing shift in global AI spending toward inference, which increases the need for fast, reliable power close to where people live and work. In California, grid capacity could nearly double by 2035, helped by new utility connections and procurement programs. Together, these trends broaden opportunities for “power-to-CCS” solutions serving utilities and data centers.
Rising in-state demand and supportive regulations also strengthen CRC’s ability to pair dependable, lower-carbon power with nearby storage sites, especially around PG&E Corporation’s ((PCG - Free Report) ) expanding interconnect network for new data centers.
Power-to-CCS Platform in Kern County
CTV and Capital Power signed an MOU to evaluate CCS at the La Paloma combined-cycle plant and to study data-center adjacency, permitting and integration. The opportunity sits near 2.4 GW of baseload capacity, with potential capture up to 3 million metric tons per year and power capacity up to some 1.1 GW.
Capital Power operates roughly 12 GW across North America, adding an experienced power partner to CRC’s storage footprint. The Kern County cluster also benefits from proximity to gas pipelines, interconnection, water and major fiber networks — key siting factors for data-center-ready CCS.
Permit Progress De-Risks Early Projects
CRC secured California’s first Environmental Protection Agency (EPA) Class VI permits for CTV I-26R and received county conditional use permit approvals for the broader CTV I project. The Elk Hills Cryogenic Gas Plant CCS project is approved, and additional Class VI draft permits are anticipated as part of a multi-reservoir pipeline.
Taken together, the permits and county actions reduce early execution risk and support higher-confidence timelines as CRC sequences reservoirs across Central and Northern California.
JV Structure Lowers Capital Intensity
CRC’s partnership with Brookfield plans to inject about 5 million metric tons of CO2 per year by the end of 2027, backed by $2.5 billion in total investment, split evenly between debt and equity. Brookfield contributes pore space valued at about $980 million, while CRC is expected to invest $637 million. That setup leaves roughly $343 million available to support early carbon management spending.
This structure largely covers CRC’s equity needs for the first approved projects under the CTV joint venture, giving the company more flexibility for shareholder returns and future low-carbon power growth.
Economics Favor Mid to High Concentration Streams
The economics are most attractive when CO2 streams have medium to high concentrations, since capture costs are lower and projects are easier to finance. Storage-only projects need less upfront spending but also generate smaller returns, while low-concentration sources like gas power plants become viable only as technology improves and incentives grow.
This cost curve shapes CRC’s priorities. Early Power-to-CCS projects are likely to focus on higher-concentration sources first, with smaller add-ons added over time as capture technology gets better.
Emissions Credibility Enhances Offtake
CRC earned MiQ “Grade A” methane certifications for both the Los Angeles Basin (2024) and Ventura Basin (2025) and remains the only oil and gas producer in California and the Rocky Mountain region with MiQ certification. That third-party verification strengthens CRC’s low-emissions narrative when negotiating with CCS customers and power partners.
Management also notes ongoing work with MiQ to expand certifications statewide, reinforcing the company’s decarbonization brand as CTV commercializes.
What Investors Should Watch Next
Key milestones to watch include the expected closing of the Berry merger, which management believes can deliver meaningful annual cost savings, the first carbon capture and storage injection planned for early 2026 at Elk Hills, and upcoming EPA Class VI permit decisions for several storage sites.
In parallel, any final-investment-decision milestones tied to the Power-to-CCS corridor or data-center-adjacent projects would help quantify forward earnings streams. For portfolio context, CRC currently carries a Zacks Rank #4 (Sell).
California Resources Corporation Price and Consensus
California Resources Corporation price-consensus-chart | California Resources Corporation Quote
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