Court rules against California’s first carbon capture project, a key piece of state climate plans

A Kern County judge ruled that approval of California’s first operating carbon capture and storage project — a technology the state is counting on to meet its climate goals — violated state environmental law and must be set aside.

Judge Marcos Camacho found that environmental review of California Resources Corp.’s TerraVault project, which Kern County supervisors approved in October 2024, fell short in several ways. Among them, it failed to analyze the industries expected to supply the project with carbon dioxide. 

Because the judgment is not yet final, it’s not clear when CRC must stop injecting carbon dioxide and suspend the facility’s operations. A real-time project tracker on the company’s website indicates that carbon injection continues. 

Carbon TerraVault 1 — the first of at least nine carbon storage projects the company plans around the state — is designed to collect up to 46 million metric tons of carbon dioxide, according to CRC. The company is injecting carbon deep underground in a Kern County oil field to keep it from warming the atmosphere. The project began operating earlier this year after a lengthy and controversial approval process. 

Kern County policymakers hoped the project — and others that might crop up nearby to send carbon to the reservoirs — would provide a much-needed infusion to the county’s oil-dependent economy as California moves away from fossil fuels. 

More than 15 similar projects are under development in California, according to a map from the Clean Air Task Force. But for many communities, siting those projects can be a hard sell because of uncertainty and mistrust, and some residents near the project have raised concerns about air pollution and carbon dioxide leaking from the reservoirs or the pipelines feeding it.

What the court found

Environmental groups sued over TerraVault 1 in 2024, alleging the project’s environmental impact report did not adequately consider cumulative environmental and greenhouse gas impacts, among other issues, in violation of the California Environmental Quality Act. Camacho sided with them on several counts.

Among the most significant issues was the potential that polluting facilities could crop up near the storage reservoirs. CRC’s environmental assessment laid out eight industries, such as hydrogen, cement and steel manufacturing, that could someday ferry carbon dioxide to the depleted reservoirs in the Elk Hills oil field. But the review didn’t look at how those plants could affect the surrounding area. The project currently stores only carbon dioxide that CRC strips from gas the company draws from its own oil field.

Leaving out those likely sources, Camacho wrote, “infects the informational foundation for the whole Project.”

Michelle Ghafar, a senior attorney at Earthjustice, which represented two of the plaintiffs, called the ruling “a pretty resounding win.”

“I was really struck by the decision, which basically said that there are errors running throughout the entire document,” she said.

CRC did not respond to emailed questions about whether it will appeal, how long the reapplication process may take, or if it will suspend project operations.

Company president and CEO Francisco Leon said in a statement that the order “is a step in the wrong direction for addressing the impacts of climate change and reflects the weaponization of CEQA by a narrow group of special interests.” The company plans to “aggressively pursue all available options to protect and advance this important project,” the statement said.

What comes next

Plaintiffs, including the Central California Environmental Justice Network, Committee for a Better Shafter and the Center for Biological Diversity, will now prepare a proposed judgment for the court’s approval. They say CRC must suspend operations while the company reanalyzes the project’s impacts and the county reconsiders it. That could take several months or several years, according to Ethan Elkind, director of the climate program at UC Berkeley’s Center for Law, Energy & the Environment.

In a regulatory filing, CRC said Camacho’s ruling was not final and its effect on existing operations was uncertain. A spokesperson for the U.S. Environmental Protection Agency, which approves carbon injection permits in California, said the court ruling has no impact on CRC’s federal permit approvals. A Kern County planning department representative did not reply to requests for comment.

Ileana Navarro, a policy associate at the Central California Environmental Justice Network, called the ruling “a breath of fresh air, both figuratively and literally,” for nearby communities.

“You’re asking community members to gamble their communities, neighborhoods, health and safety on projects that don’t really have a track record,” Elkind said. “That’s always difficult.”

The ruling came as voters weighed Proposition 45, which would set deadlines for environmental reviews and lawsuits on certain “essential” projects — a category that explicitly includes carbon capture and storage — and bar courts from ordering approvals rescinded.

Supporters said the measure would speed construction of housing and infrastructure; opponents said it would weaken environmental protections. It was trailing in early returns. 

Ghafar said the ruling shows why the state’s environmental review law remains an important tool. “We need the law now more than ever,” she said.