The Elk Hills Field is California Resources Corporation’s (CRC) world-class onshore asset located 20 miles west of Bakersfield in Kern County. The field, covering nearly 75 square miles, was discovered in 1911 and has produced over 2 billion barrels of oil equivalent (BOE), making it one of the most productive fields in the United States. During 2019, we produced 51,000 BOE per day (40 percent of CRC’s total production) on average from our more than 3,000 wells at Elk Hills. Elk Hills is the largest natural gas and natural gas liquids (NGL) field in California, generating over half of the state’s natural gas production.
The operations at Elk Hills include a state-of-the-art consolidated control facility, remote automation control on over 95 percent of wells, and integrated production facilities for economies of scale, all of which result in high operational efficiencies.
Elk Hills Power, LLC, a joint venture of CRC and a portfolio company of Ares Management, L.P., operates the largest cryogenic gas plant in California. Elk Hills Power also operates a 550-megawatt (MW) natural gas, combined-cycle power plant that supplies electricity to the Elk Hills Field and supplies excess power to a local utility and California's electric grid.
At Elk Hills, CRC also operates efficient natural gas processing facilities, including a state-of-the-art cryogenic gas plant, with a combined gas processing capacity of over 520 million cubic feet per day (MMcf/d). CRC operates a 45-MW cogeneration plant to provide steam and electricity to the field as needed.
In July 2019, CRC entered into a development joint venture with Alpine Energy Capital, LLC (Alpine) to develop portions of our Elk Hills Field (Alpine JV). Alpine is a joint venture between subsidiaries of Colony Capital, Inc. (Colony) and Equity Group Investments. Alpine committed to invest $320 million, which may be increased to a total investment of $500 million, subject to the mutual agreement of the parties. The initial commitment is expected to be invested over a period of up to three years in accordance with a 275-well development plan. Alpine will fund 100 percent of the drilling and completion costs of these wells, in which they will earn a 90 percent working interest. If Alpine receives an agreed upon return, our working interest in those wells will increase from 10 percent to 82.5 percent.
Beyond CRC’s essential role in supplying Californians with oil, natural gas, NGLs and electricity, federal and state resource agencies have recognized CRC for our commitment to environmental stewardship at Elk Hills. CRC established an 8,000-acre habitat conservation area and received a 50-year state permit in 2016 that will preserve at full field development an additional 17,500 acres in perpetuity, for a total conservation area equivalent to over half the surface area of the Elk Hills field. CRC’s habitat conservation program, which is certified by the Wildlife Habitat Council, also includes operating practices to protect unique plant and animal species and cultural resources at Elk Hills and over 25 percent of CRC’s total surface acreage.
Bill Dixon, Retired Elk Hills Engineer: I started working at Elk Hills in February 1977 after graduating from Oklahoma State University. I’ve worked out in the field. I’ve worked my way into engineering. California Resources Corporation cares very much about the environment. Here at Elk Hills, we operate this field in a transparent mode. Elk Hills has been a great place to work to provide for my family. It has paid for my house and put two kids through college. Plus, CRC, their motto is “For California by Californians” and the people that work out here take great pride in what they do. People that I know firsthand that operate Elk Hills, they operate like their family is living next door.
Blodgie Rodriguez, Hispanic Community Leader: My family has been here for 100 years in Kern County. The oil and gas industry has been very instrumental in my family. Kern County is ag and oil-based. My father was in agriculture and my mother was in oil, so it’s very much part of the thread of my family. 80% of the state’s oil is produced out of Kern County; Therefore, there are a lot of jobs that it creates, and there was a trickle-down effect when people are working small businesses, our thriving families have places to live, so it’s very important here in Kern County. In all my years, I’ve never once had a conversation or heard anybody stating that they wish Elk Hills would go away. They are a huge asset to our community.
David Couch, Supervisor, Kern County District 4: I can tell you firsthand if Elk Hills didn’t exist, we’d have a huge, huge problem on our hands just to be able to deliver basic services – Sheriffs on the street, police officers on the street, teachers in the classroom. It all starts with somebody paying their property tax and paying their sales tax and CRC is the second largest property taxpayer in Kern County, so it’s pretty important. Twenty-four hours a day, seven days a week, Elk Hills is producing a product that we all use every single day and we think nothing of it, we take it for granted. It impacts the waitress in the diner as they’re serving the guys going out to Elk Hills at six o’clock in the morning. It has a ripple effect probably seven or eight times each dollar that then payroll at Elk Hills is then paying someone. On top of that, charitable contributions that are made, homeless collaborators and those sorts of things also impact the community in a variety of ways. It would be felt by everyone if Elk Hills didn’t exist.
John Spaulding, Executive Secretary, Building & Trades Council: If people would really realize what they’re thinking when they talk about shutting down a whole industry, they’re forgetting about the people that are working in that industry. CRC is absolutely a good neighbor. They have been just an outstanding company to work with and to work for. Our members are very pleased to be able to work for them whether it’s on Elk Hills or any other locations that they have employment. We’re talking about people that live here and we’re talking about oil companies that care about the environment. I often say they’re good stewards of the land.
Casey Prohaska, Facilities Engineer, CRC: As the Sustainability team, we want to be good stewards of the Earth. It matters to me and it matters to California Resources Corporation. At Elk Hills, we have state-of-the-art control facilities monitoring all of our wells, our gas compressor stations, as well as our cryogenic gas plant. We have operators that man it twenty-four hours a day remotely. The whole field can be watched from one room. Today, we’ve electrified all of our pumping units and that electricity is provided by the gas that we produce here at Elk Hills and we have a power plant on-site. We’re completely self-sufficient. We don’t use any power from the grid. It’s important for California Resources Corporation to be allowed to continue to operate in the state because if it becomes impossible to operate, then these resources that we provide will be outsourced from the other regions in the world – like form South America or from the Middle East where there’s concerns about human rights.
Nick Ortiz, President, Bakersfield Chamber of Commerce: In Kern County, we’re so proud of the oil industry. We’re so proud of the people who work in it. When you look at an asset like Elk Hills and look at the investment that has been made there in order to ensure that that field continues to produce in a way that’s applying 50% of natural gas production in state, you really get a sense that California Resources Corporation is invested in that field. We live here, we work here, we raise our families here. Our concern is that we are able to continue to produce this resource, that we are able to continue to provide great jobs, great wages, and that we are going to continue to have the quality of life in kern County that we’ve been protecting for decades.
Dedicated to the people of Kern County.
CRC has four 2030 Sustainability Goals on water, renewables, methane and carbon that align directly with the State of California’s. CRC’s carbon goal is to design and permit California’s first carbon capture and sequestration (CCS) system by mid-decade. This project would capture carbon dioxide (CO2) from the Elk Hills Power Plant and inject that CO2 into underground oil formations, displacing remaining oil and permanently trapping CO2 deep underground – all while significantly extending the productive life of the Elk Hills Field.
The International Energy Agency calls CCS “one of the only technology solutions that can significantly reduce emissions from…power generation and deliver the deep emissions reductions needed across key industrial processes…, all of which will remain vital building blocks of modern society.” Similarly, the California Energy Commission has previously identified the Elk Hills Field as “an optimal site for the safe and secure sequestration of CO2” and “one of the premier…sequestration sites in the U.S."
CRC has partnered with the Electric Power Research Institute and Fluor Corporation to prepare a Front End Engineering and Design (FEED) study for the pioneering Elk Hills CCS project in 2020. The FEED study is receiving financial support from both the U.S. Department of Energy – one of only nine projects around the country that DOE selected in 2019 – and from the climate investment arm of the Oil and Gas Climate Initiative (OGCI). CRC has partnered with OGCI Climate Investments to form Elk Hills Carbon LLC. OGCI Climate Investments has invested in Elk Hills Carbon LLC and will provide technical input into the project. CRC envisions the Elk Hills CCS project as the central component of a robust future CCS network in California. Learn more by checking out our CCS Project infographic (PDF).