Court Halts California's First Carbon Storage Project
The ruling requires a full environmental review of CO2 sourcing before the state's first operational carbon capture project can continue storing gas.
Updated on Nov. 4, 2026 in Environmental
Live Poll
Should companies be allowed to store carbon dioxide underground at large scale?
A California court ruled that Kern County's approval of Carbon TerraVault I, the state's first operational carbon capture and storage project, violated the California Environmental Quality Act and ordered the county to withdraw its certification. The project, which has stored carbon dioxide from California Resources Corporation's cryogenic gas plant at the Elk Hills Oil Field since May, is operational rather than announced or research-stage, but the court blocked further authorization until a legally adequate environmental review is completed.
Why it matters
The ruling shows that state environmental review can stop a carbon storage project even after it begins operating, a signal for developers pursuing underground CO2 storage across California. The court found the review did not account for sourcing CO2 from eight industrial sectors, making scope of the assessment a central constraint on future permits.
The project is designed to inject 1.46 million tonnes of CO2 per year into two underground reservoirs, which the court found held four and seven times the capacity needed for CO2 from the original source. The court upheld the county's analysis of induced seismicity and CO2 pipeline safety risks while rejecting other parts of the assessment.
The players
California Resources Corporation (CRC)
A California oil and gas producer that operates the Elk Hills Oil Field and whose Carbon TerraVault subsidiary is developing carbon storage projects.
Center for Biological Diversity
An environmental advocacy organization that opposed the Carbon TerraVault I project and supported the legal challenge.
Kern County
The California county whose approval of the Carbon TerraVault I environmental impact report was set aside by the court.
The details
Carbon capture and storage (CCS) captures carbon dioxide from industrial sources and injects it into deep underground rock formations so it does not reach the atmosphere. Under federal Class VI permits, operators must show that the injected gas will remain sealed underground, and under California law, counties must complete an environmental impact report that examines the project's full scope. The court found Kern County's review did not assess the effects of collecting CO2 from eight industrial sectors, even though the reservoirs could hold far more gas than the single original source would supply.
Timeline
May: Carbon TerraVault I began storing CO2 from CRC's gas plant at the Elk Hills Oil Field.
November 2, 2026: Carbon TerraVault submitted a new Class VI permit application covering about 57 million tonnes of CO2 storage.
November 4, 2026: The court ruling was reported.
The Tech Race
Carbon TerraVault I is the first operational CCS project in California, and the court's ruling sets a precedent for how future projects, including CRC's new 57 million tonne application, must be reviewed under state law. The company's total submitted volumes of about 409 million tonnes place it among the largest pending storage portfolios in the state.
Residents near the Elk Hills Oil Field and along planned CO2 pipeline routes will see whether the project resumes operations only after the county completes a revised environmental assessment, a timeline the court did not set. The company said it expects no material financial effect from the ruling, though its legal challenge to the decision is pending.
The takeaway
Watch whether Kern County completes a revised environmental review that covers the eight industrial sectors and CO2 leakage findings, and whether CRC's legal challenge succeeds. The next milestone is the county's response to the court's order and the status of the 57 million tonne permit application.
Further reading
For background on how these rules apply to new energy infrastructure, see Environmental coverage across California.
Source note: This article includes information reported by Gasworld.
Live Poll
Should companies be allowed to store carbon dioxide underground at large scale?
