Data center in west Kern would likely tap nearby power plant, carbon storage
A local oil producer's proposal to develop a data center in western Kern County is part of a larger discussion of how to integrate the region's power generation, carbon storage assets, natural gas reservoirs and available land.
California Resources Corp. first mentioned the possibility of building a data center in the region when in November it announced a memo of understanding with the Canadian-based owner of a 1.1-gigawatt, natural gas-fueled power plant in McKittrick.
Discussions still underway between the two companies are said to have explored the possibility of developing a data center at either CRC property in Elk Hills or Alberta-based Capital Power's land in McKittrick — possibly both. In either scenario, waste carbon dioxide would be sent for permanent injection at a pair of depleted oil and gas wells CRC owns in Elk Hills.
"We think it's a very compelling one-stop shop opportunity," CRC President and CEO Francisco Leon told analysts during a May 6 conference call. He emphasized the company's ability to "permit, deliver firm gas supply, offer available land adjacent to existing infrastructure and pair it all with CCS," which stands for carbon capture and sequestration, a climate action that buries greenhouse gas.
The talks highlight what may be a unique colocation opportunity in western Kern as developers race to build data centers to help power U.S. artificial intelligence. Having nearby access to ample land and renewable energy infrastructure may benefit other data center proposals, including one in eastern Kern County, but few can also boast close proximity to CCS capacity and natural gas reservoirs.
Colocations like that have become a growing trend within energy infrastructure because data centers can have a large carbon footprint, Director Katy Larson of the California Energy Research Center at Cal State Bakersfield said by email Thursday.
"Colocation with existing resources makes sense from the power source to the waste product (CO2) for maximized efficiency of resources and economics," she wrote.
CRC said in a statement Thursday that discussions around data center development at Elk Hills continue to gain momentum. The company added that CRC looks forward to working with local stakeholders as planning efforts move forward.
Alluding to a common misgiving about such projects, CRC noted it is "committed to maximizing water recycling," which it said "creates a compelling platform for technology infrastructure development in Kern County."
Earlier this month, CRC began injecting waste carbon dioxide from its nearby cryogenic gas processing facility at Elk Hills. Expectations are that byproduct CO2 from other industrial operations, including facilities that haven't yet been built, will be sent to the same injection site, likely using pipelines.
Any such connection would require approval by the Kern County Board of Supervisors, which would vote on whether to issue CRC a conditional use permit for each additional contributor of CO2, said Director Craig Murphy of the county's Planning and Natural Resources Department.
Murphy said he has been approached by CRC about its potential interest in a data center in western Kern but that he hasn't yet received any formal application. He noted that the California Energy Commission could have a role in reviewing such a project, including conducting a full environmental review, depending on the size and type of energy sources proposed.
Meanwhile, the developer of a different data center project in Inyokern has turned in a formal application, Murphy said. That project has drawn opposition from nearby residents who say it could strain the area's water supply, in addition to potentially creating too much noise and light, among other concerns.
Capital Power has marketed itself as a turnkey solution to data center development since paying $1.1 billion in early 2024 for the La Paloma power plant in McKittrick. Its website touts facilities it says are ideally positioned for rapid deployment, operational resilience and long-term scalability.
"Connect with us to power your data centre!" the site says.
Vice President Robert "Rob" Wydareny at the company's Balanced Energy Solutions division said the company is weighing different ways of integrating its power plant with data centers and CCS.
With Capital Power's ample property around the plant, he said Thursday, a data center could be situated near La Paloma or near Elk Hills. Either way, the CO2 would likely end up with CRC, he said, adding that the company is not ready to announce a deal.
