California Court Halts TerraVault I, Kern County's First CCS Project

A California Superior Court judge has shut down the state's first commercial carbon capture and storage project, ruling that Kern County's environmental review of California Resources Corporation's TerraVault I violated state law.

Judge Marcos Camacho issued the order on November 3, 2026. The injunction stops CO2 injection operations at the Elk Hills Oil Field in the San Joaquin Valley until CRC produces a revised and comprehensive Environmental Impact Report. The facility was designed to sequester more than 2 million metric tons of CO2 per year in depleted oil reservoirs.

The Sierra Club, the Center for Biological Diversity and Earthjustice brought the challenge under the California Environmental Quality Act. They won on the merits.

What did the court find wrong with the review?

The ruling identified three principal failures in the project's Environmental Impact Report.

• Piecemeal scope. The EIR did not analyze the environmental impacts of eight prospective industrial facilities, including cement and steel plants, that were intended to supply CO2 to TerraVault I. The judge held that those source projects were a reasonably foreseeable consequence of building the storage hub and should have been reviewed together.
• Leakage risk. The court found the analysis of potential atmospheric CO2 leakage from depleted reservoir structures incomplete.
• Greenhouse gas mitigation. The EIR lacked adequate strategies for mitigating net greenhouse gas emissions.

Each finding independently breached CEQA. Taken together, they framed the county's approval as a segmented review that left the project's full footprint unevaluated.

How did the project reach this point?

CRC began capturing and injecting carbon dioxide at Elk Hills in May 2026, roughly six months before the court order. The project targeted emissions from local oil operations and from planned regional industrial facilities — the same eight source plants the court said the county should have examined.

TerraVault I carried a first-mover status in California. It operated as the state's inaugural commercial CCS site, a designation that made its permitting record a test case for subsequent projects.

CRC President and CEO Francisco Leon expressed disappointment with the ruling. He said the order represents a step backward for climate management technologies. The company will evaluate options to appeal or to remedy the environmental filings, Leon stated.

What must happen before injection resumes?

The injunction sets a defined path, though without a fixed calendar. Before CRC can seek authorization to restart sequestration, it must prepare a revised EIR that addresses:

• all potential source facilities feeding CO2 into the hub;
• local air quality impacts;
• long-term storage monitoring.

That scope effectively reopens the analysis Kern County conducted the first time. A revised report covering eight industrial sources, air quality and decades-scale monitoring obligations is a materially larger document than the original filing.

Why the ruling matters beyond Kern County

The decision lands while California moves closer to adopting first-in-the-nation rules for carbon capture and removal. A court voiding the permit of the state's flagship CCS project on CEQA grounds signals to developers that source-facility analysis cannot be deferred to later proceedings.

The precedent reaches beyond oilfield geology. Any future storage hub that plans to accept CO2 from industrial capture projects — cement, steel, hydrogen, power generation — now faces a clearer judicial standard in California: the downstream sources are part of the project.

For CRC, the immediate financial and operational question is the duration of the shutdown. The company had paired the project with broader decarbonization plans, including a separate evaluation with Bloom Energy of 1 gigawatt of fuel cell power equipped with carbon capture.

What decides what happens next

Two milestones now control the timeline. First, CRC must choose between an appeal and compliance — the company said it is evaluating both. Second, if it complies, Kern County must certify a revised EIR that survives further CEQA scrutiny from the same environmental groups that won this round. Operations at Elk Hills stay idle until both steps conclude.