LOS ANGELES, Aug. 10, 2026 /PRNewswire/ — California is setting the stage for oil producers, refiners, and other industries to decarbonize. Air regulators are circulating proposed rules for the state’s first industrial Carbon Capture and Storage program. They’ve doubled a pool of CO2 emissions allowances to $4 billion for manufacturers that make approved investments in decarbonization. The state Fire Marshal recently finalized safety rules for carbon dioxide pipelines to carry the dangerous asphyxiant. None of this makes sense for California, Consumer Watchdog finds in a new report.
The California oil producer furthest down the decarbonization path is California Resources Corporation (CRC). “As California’s largest oil producer, California Resources Corp. is the poster child for both the California oil industry’s slow death as it runs out of oil, and dangerous reinvention as it pushes Carbon Capture and Storage technology that is a bad bet for the public and the environment,” Consumer Watchdog said in a new report.
This week, the California Public Utilities Commission may also green light CRC’s purchase of Crimson Utilities, owner of two major crude oil pipeline systems supplying California refineries. The San Pablo pipeline connecting Kern to Bay Area pipelines was closed last year due to low operation rates costing Crimson Utilities $2 million a month, according to the Oil Price Information Service. The state-blessed acquisition would ensure that CRC is too big to fail.
To read the report click here.
For a scroll telling visualization see: https://consumerwatchdog.org/slowdeath/
“During the last two years, California Resources Corp. (CRC) has purchased Aera Energy and oil producer Berry Corporation while Governor Gavin Newsom and regulators have ignored state laws requiring purchasers of oil producers to put up bonding to ensure the wells are eventually plugged. This allows CRC to socialize billions of dollars in costs of sunsetting oil wells while privatizing any profits,” the report says.
“While CRC expands its well portfolio, its new gambit is building risky, multi-billion-dollar Carbon Capture and Storage (CCS) projects that will siphon carbon dioxide emissions from smokestacks for pipeline transportation and burial in geological formations with the support of Governor Newsom and state regulators. At the same time, the market for carbon dioxide removal technologies is collapsing with Microsoft stepping back from the industry it helped create, according to The New York Times.
“California currently has about 40 announced projects, including direct air capture of carbon from the air, according to a list tracked by the California Air Resources Board updated last fall. These projects, also proposed by Aera Energy and Chevron, are in various stages of development but none are fully approved. Many, but not all, projects depend on dangerous pipelines to carry compressed carbon dioxide, a potentially lethal asphyxiant, for storage in geological formations. But no official statewide count currently exists. In addition, an up to 45-mile pipeline has been proposed for the Bay Area.”
This report finds:
CRC and other oil producers’ forays into CCS are a multi-billion-dollar boondoggle turbocharged by financially lucrative federal tax credits while promoting continued use of fossil fuels. Without the tax credits, it is doubtful these projects could stay afloat even with private investment, according to analysts.
According to the Congressional Budget Office, 15 operating CCS facilities in the US have the capacity to capture just four-tenths of one percent of the nation’s annual CO2 emissions.
CCS overpromises and underdelivers. A global review by the Institute for Energy Economics and Financial Analysis (IEEFA) of 16 carbon dioxide capture projects in settings from natural gas processing to hydrogen production and gasification found that the projects captured as little as 10% of CO2 emissions and no more than 80%, though the industry claims a 95% capture rate.
The amount of carbon dioxide captured by oil refineries is virtually non-existent, according to analysts. Capturing a steady stream from inhouse hydrogen production needed continuously to make products is the only target area that makes sense, but refiners need federal tax credits and contracts to sell higher priced “low carbon” products to justify the expense.
CRC promises to capture CO2 from its own gas-fired power plant. Carbon capture from natural-gas fired power plants has never been done at commercial scale, IEEFA reports. Facility emissions associated with running the carbon capture equipment are not included in industry estimates. The extra energy needed is as high as 20% to 30% of a power plant’s output, generating more fossil fuel emissions.
CRC plans to take CO2 emissions from other California industries. Nothing compels these companies to pay CRC to take their CO2 emissions. But the project could drive new, polluting industrial development instead of cutting existing emissions to mitigate climate change.
“The alternative is simple and cheaper, but goes against the interests of CRC, Aera and other oil producers,” the report concludes. “According to the International Energy Agency, ‘Ramping up renewables, improving energy efficiency, cutting methane emissions and increasing electrification with technologies available today deliver more than 80% of the emissions reductions needed by 2030.’ CCS provides a fraction of what’s necessary and is no solution, merely putting off what should be done now—a full-scale transition away from oil and gas.”
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SOURCE Consumer Watchdog
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