In the heart of California’s Elk Hills Field, a hydrogen revolution is taking place. The Lone Cypress Hydrogen Project, led by Lone Cypress Energy Services, is making significant strides in the production of blue hydrogen, positioning itself as the leader in the Western US. Blue hydrogen is produced by converting methane emissions, a process that has the potential to revolutionize the energy sector. The project’s Front-End Engineering Design (FEED) study, a collaboration between Lone Cypress and its strategic partner Carbon TerraVault JV Holdco, LLC (CTV), has been successfully completed. CTV, a joint venture of California Resources Corporation (CRC) and Brookfield Renewable, will provide the carbon sequestration assets for the project.
Lone Cypress Energy Services specializes in hydrogen generation, waste-to-energy solutions, and traditional oil and gas midstream facilities, with over 100 years of combined experience. CRC, an energy and carbon management company, holds the largest mineral reserves in California and produces some of the lowest carbon-intensity oil in the US. Brookfield Renewable, a global leader in renewable power, operates a vast portfolio of hydroelectric, wind, solar, and storage facilities worldwide. Greg Brooks, President and CEO of Lone Cypress, expressed his confidence in the project, stating that it will generate the most cost-competitive low-carbon liquid hydrogen in the Western United States.
The Lone Cypress Hydrogen Project is not only a significant energy endeavor but also an economic powerhouse. With an injection of over $500 million into California’s local economy, the project will create more than 1,200 jobs during its construction phase, providing a boost to employment in the state. Additionally, the project will contribute to global efforts in reducing carbon emissions by utilizing an integrated carbon capture system capable of storing 500,000 metric tonnes of CO2 annually, equivalent to removing 100,000 cars from the roads.
The strategic location of the Lone Cypress Hydrogen Project is crucial to its success. Situated on 300 acres at CRC’s Net Zero Industrial Park in Elk Hills Field, the project has the potential to become California’s hydrogen hub. The company’s design, based on the FEDD study, aims to maximize impact and reach. The project has attracted significant investments, totaling $1.5 billion, from major energy stakeholders who recognize its promise of a sustainable and profitable future. CorEnergy Infrastructure Trust, for example, has provided approximately $1 million in support. The project also highlights the importance of collaboration among industry leaders, with over 10 players working together, including CRC and Brookfield Renewables.
Market analysts are optimistic about the future of the Lone Cypress Hydrogen Project. It is estimated that by 2026, the project will meet up to 5% of California’s hydrogen demand. Following the completion of the FEED study, Lone Cypress has submitted the necessary permits and is finalizing agreements for hydrogen off-take from the facility. A final investment decision is expected by the end of this year, with operations scheduled to begin in the fourth quarter of 2025. The project utilizes state-of-the-art steam methane reformation technology for blue hydrogen production, pushing boundaries and setting new industry standards.
Blue hydrogen is produced through steam methane reforming (SMR), a process that uses fossil fuels, primarily methane, as the input. The Lone Cypress project is the first carbon sequestration project under CRC’s “carbon terra vault” initiative, which aims to capture and store 200 million metric tons of CO2 at an estimated cost of $2.5 billion. This initiative is a partnership with Brookfield Renewable and marks the beginning of California Resources’ rollout of carbon capture and sequestration technology. Other major players in the field, such as ExxonMobil Corp, are also considering blue hydrogen facilities to generate hydrogen. The global hydrogen market is valued at $120 billion, with S&P Global estimating that blue hydrogen’s global production capacity will exceed 3 million metric tons per year by 2028.
Blue hydrogen is seen as a transitional solution in the journey towards cleaner energy sources and reducing carbon emissions. While it still relies on fossil fuels, unlike green hydrogen which is produced using renewable power and is emission-free, blue hydrogen can help industries shift away from high-carbon energy sources while infrastructure for green hydrogen is developed and scaled up. The industry is witnessing significant milestones, such as the Lone Cypress Hydrogen Project and First Hydrogen’s record-breaking hydrogen-fuel-cell-powered vehicle (FCEV), which are driving the hydrogen revolution and demonstrating the potential for a cleaner and greener future.