A path to a carbon-neutral oil industry in California

Abstract

The California (CA) oil industry faces several huge challenges – oil reserves that are carbon intensive and costly to produce, low commodity prices, extensive environmental regulation, and a subset of environmental advocates who seek to have CA be ground zero for the “leave it in the ground” movement. However, the love affair between CA and the automobile will likely demand a continued supply of gasoline and diesel well into midcentury even as the uptake of batteries or fuel cells deepens. Recent amendments to the Low Carbon Fuel Standard (LCFS) extended eligibility for credits to some carbon capture and sequestration (CCS) projects. Hence, the LCFS could provide sufficient financial incentives to build a robust CCS industry in the State, with the oil and gas industry supplying geologic repositories and the technical know-how to store millions of tons of CO2 a year underground – and make a profit doing so. Development of this industry would preserve oil industry jobs and turn them to helping the state meet its aggressive carbon goals. The LCFS sets the stage for CA to create a first-of-its-kind carbon-neutral oil industry by the end of the next decade.

AAPG Datapages/Search and Discovery Article #90339 ©2019 AAPG Pacific Section Convention 2019, Long Beach, California, April 1-3, 2019