Consumer Watchdog · Investigation · August 2026
The Slow Death and Dangerous Reinvention of California Resources Corp
📄 Read the full reportMeet California Resources Corp.
The poster child for oil’s slow death—and its dangerous reinvention.
As California’s largest oil producer, California Resources Corp. is the poster child for both the industry’s slow death as it runs out of oil, and its dangerous reinvention as it pushes Carbon Capture and Storage technology that is a bad bet for the public and the environment.
The progeny of a 2014 Occidental Petroleum spinoff holding $5 billion in inherited debt, CRC filed for bankruptcy in 2020 and survived by swapping debt for equity. As production keeps falling, it has gone on a buying spree—snapping up Aera Energy and Berry Corporation—while Governor Newsom and regulators ignore state laws requiring buyers of oil producers to bond the wells for eventual plugging. That lets CRC socialize billions in cleanup costs while privatizing the profits.
Its new gambit: multi-billion-dollar projects to siphon carbon dioxide, pipe it, and bury it underground—with Newsom’s backing, and billions in federal tax credits.
“CRC’s projects to bury carbon dioxide are full of holes—literally and figuratively.”
This report finds
A dangerous, expensive fix that doesn’t work.
- Burying and piping CO₂ is dangerous—it can leak from depleted reservoirs, and pipeline ruptures form ground-hugging, potentially fatal clouds.
- Neither Kern County nor Bay Area communities want these projects—they add pollution, extend the life of fossil fuels, and residents don’t trust regulators to protect them.
- CRC’s foray into CCS is a multi-billion-dollar boondoggle, turbocharged by federal tax credits—doubtful it survives without them.
- All 15 U.S. carbon-capture facilities capture just four-tenths of one percent of the nation’s annual CO₂ (CBO).
- CCS overpromises and underdelivers—a review of 16 projects found 10–80% capture, not the claimed 95% (IEEFA).
- Capturing CO₂ from a gas-fired power plant has never been done at commercial scale, and the process itself burns 20–30% more energy.
Act I
The Slow Death
California crude production, indexed to its 1985 peak
The wells nobody wants to pay for
Set aside per well: $1,800. The cleanup bill: $21 billion.
California has no hard rule that idle wells be plugged—so they likely leak methane, a potent climate pollutant, for years. CRC holds tens of thousands of them, and oil producers can cover thousands of wells with just a few million dollars in “blanket bonds.”
The assets CRC keeps buying
Most of CRC’s 39,824 wells produce little—or don’t at all.
- No production 21,924
- Under 3 BOE/day 6,520
- 3–10 BOE/day 6,327
- 10–15 BOE/day 1,957
- Producing well 3,096
Data: FracTracker Alliance, from CalGEM production data.
Act II
The Dangerous Reinvention
The pitch
Governor Newsom is carbon capture’s biggest fan
Under Newsom, a 2022 law (SB 905) created California’s Carbon Capture, Removal, Utilization and Storage Program. Last year he backed SB 614, lifting a partial moratorium on building CO₂ pipelines—without a strict mandate for an odorant to warn people of leaks. He called carbon capture “a critical pillar of California’s world-leading efforts to cut climate pollution.”
The promise is simple: capture the carbon, transport it, and store it forever. Scroll through how it’s supposed to work.
How carbon capture is supposed to work
The reality
It doesn’t.
The oil industry commercialized carbon capture 50 years ago to push more oil out of the ground—not to protect the climate. Today, more than 80% of captured CO₂ is still used to extract more oil. The industry claims a 95% capture rate; a global review by the Institute for Energy Economics and Financial Analysis (IEEFA) of 16 real projects found they delivered as little as 10%, and no more than 80%.
Worse, running the capture equipment burns 20–30% more energy—so emissions can actually rise. All 15 U.S. carbon-capture plants together capture just four-tenths of one percent of the nation’s annual CO₂.
“It doesn’t make sense to use CCS to prolong our use of fossil fuels, especially to produce electricity.”
David HoSenior research scientist, Columbia University
So why is it happening? “In the US, dominating the CCS landscape is the federal credit,” said IEEFA analyst Anika Juhn. “If it did not exist at the size it exists, none of these projects would be moving forward.”
of the nation’s annual CO₂ emissions—that’s all 15 U.S. carbon-capture plants, combined.
The boondoggle
A giant, publicly-funded failure
U.S. taxpayers could underwrite $835 billion in 45Q federal tax credits over 18 years to build just 142 carbon-capture projects—nearly $6 billion each. Spread across the country, that’s about $5,200 for every federal taxpayer. Meanwhile the private market is collapsing: even Microsoft, which helped create the carbon-removal industry, has dialed back.
CRC’s project
Carbon TerraVault, at the century-old Elk Hills field
CRC broke ground on the first phase last year, in a joint venture with asset manager Brookfield—which put up half a billion dollars—and began injecting CO₂ into depleted reservoirs in May. Newsom hailed the first injections as “proof that innovation and ambition are the California way.”
But geospatial analysis by FracTracker Alliance found more than 900 oil and gas wells within one mile of the first four injection sites—each a potential path for buried CO₂ to escape. And a lawsuit by Earthjustice notes CRC’s own emissions make up only 10% of the project’s storage capacity—the rest would come from new industry the project could spur into existence.
Wellbore cement can last 30 years—“under good conditions.” Plug failures are already showing up.
Forrest SmithPetroleum engineer
The human cost
Compressed CO₂ is a lethal asphyxiant.
A pipeline rupture can send a ground-hugging cloud across a community, displacing the air people breathe—causing convulsions and foaming at the mouth, and stalling the very cars and emergency vehicles needed to escape. In 2020, a rupture near Satartia, Mississippi sent dozens to the hospital.
To scale carbon capture up, the U.S. Department of Energy estimates the country would need between 30,000 and 96,000 miles of new CO₂ pipeline—compared with about 5,000 miles in place today.
“The presence of a large number of well penetrations increases the possibility of leakage… a well blowout can’t be ruled out.”
Dominic DiGuilioRetired geoscientist, formerly U.S. EPA
Community fears & regulatory failures
Kern County, where the wells already are
In Kern County, oil fields are everywhere, and living next to them makes people sick. In Lost Hills, residents face roughly seven times the acceptable cancer risk. A 2025 study found the majority of volatile organic compounds near production there were oil- and gas-related—including carcinogens like benzene. A regulatory “heavy oil” loophole lets 68% of infrastructure evade strict leak monitoring. Residents fear CCS projects will only worsen pollution, and that pipeline ruptures will threaten communities.
“California oil and gas regulation is like a thief telling me the security system he put in my house is gold standard.”
Cesar AguirreCentral California Environmental Justice Network
The fear isn’t confined to Kern. A proposed 45-mile Montezuma pipeline would carry compressed CO₂ from Bay Area refineries past Richmond, Martinez, Pittsburg and Antioch—home to hundreds of thousands of people. In May, Richmond became the first city in the state to pass a resolution opposing carbon pipelines.
“As a council member and Richmond resident, our safety and ability to prevent disastrous emergencies is of utmost priority.”
Council Member Claudia JimenezResolution sponsor, Richmond City Council
And you already pay at the pump
per California driver, every year, for the Low Carbon Fuel Standard—about 20¢ on every gallon, or $2.68 billion in 2024.
The LCFS rewards makers of lower-carbon transportation fuels with credits they can sell to makers of higher-carbon fuels, as the state ratchets down carbon-intensity standards. The credit market for CCS projects that lower fuels’ carbon intensity is still in its infancy—but it’s the very market that CCS developers installing the technology at refineries can cash in on next. Out-of-state fuel makers, including oil and gas companies, can generate LCFS credits by using CCS to lower the carbon intensity of qualifying fuels sold into the California market.
Another loophole could allow out-of-state oil producers to earn California LCFS credits by capturing CO₂ from the atmosphere and then using it to produce more oil—Occidental is building the world’s largest direct air capture plant in Texas on exactly the premise. And California just moved to steer up to half of a $4 billion manufacturing decarbonization fund toward the fossil-fuel industry, including for CCS projects.
The alternative
It’s simpler, cheaper—and already here.
The state is bankrolling an unproven, dangerous technology while failing to clean up the pollution, idle wells, and long-term liabilities the oil industry leaves behind. There is a better path. According to the International Energy Agency, ramping up renewables, efficiency, electrification, and cutting methane emissions—with technology available today—can deliver more than 80% of the emissions cuts needed by 2030. Carbon capture merely puts off what should be done now: a full-scale transition away from oil and gas.
“If you spend $1 on carbon capture instead of on wind, water, and solar, you are increasing CO₂, air pollution, energy requirements, energy costs, pipelines, and total social costs.”
Prof. Mark JacobsonStanford Doerr School of Sustainability