Energy Drivers – What is the future of carbon management in the energy transition?

00:00:00 - 00:00:54
Lance Mortlock
Welcome to our next episode of the Energy Drivers podcast. I’m Lance Mortlock and I’m your host for today’s discussion with Francisco Leon, the President and Chief Executive Officer at California Resources Corporation. Throughout our series, we invite Canadian energy and mining leaders to discuss key issues, provide insights, and ask challenging questions. Today, for the first time on our podcast, we cross the southern border to have a conversation with a counterpart in the US. CRC is an independent energy and carbon management company committed to the energy transition. Francisco will shed light on what that means and discuss the future of carbon management. With that, thank you for joining our podcast, Francisco. Good to have you here.
 

00:00:54 - 00:01:14
Francisco Leon
Lance. So great to be here. Thank you so much for having me. Glad you came south of the border to talk to CRC. In a lot of ways California and Canada are kindred spirits when it comes to energy challenges and opportunities. And I really look forward to the discussion. 
 

00:01:14 - 00:01:19
Lance Mortlock
Yeah. Me too. And where are you based right now in the US? 
 

00:01:19 - 00:01:24
Francisco Leon
I’m in Los Angeles, North Los Angeles is where I’m at today. 
 

00:01:24 - 00:01:42
Lance Mortlock
Awesome. Awesome. So let’s open this episode with a brief introduction. Can you tell us a bit more about yourself and CRC?  I’ve read your organization calls itself a different kind of energy company. So what’s the core of that slogan? 
 

00:01:42 - 00:05:28
Francisco Leon
Yeah, absolutely. So as you said, I’m the president and CEO. I took over about a year ago. I was the CFO before that. I’ve been with the company CRC since we started about 10 years ago, spinoff from Occidental Petroleum. And we’ve been, we brand ourselves with a different kind of energy company and we’re really excited about the different, being a difference maker in the oil and gas industry. We’re really working hard to disrupt the energy space. That means not only doing our legacy oil and gas business very well, and that’s a sustainable, socially conscious, energy transition-driven approach that ultimately is looking to deliver hydrocarbons with lower carbon intensity. So, we’re confident, the world is better off by using oil and gas, but we’re also confident that we can do it better. And implementation of technology. It’s committing to making a change and that’s what California Resources is really all about. It helps to be in California because we operate on very environmentally stringent regulations. A lot of companies, especially in the US, don’t have to adhere to those regulations. So naturally, you’re going to be in a little bit higher level of operations when it comes to sustainability. But we can do it. We can take that to the next level. And to give you an example, Lance, we are one of very few companies in the world that has a net-zero goal by 2045. Looking to offset Scope 1, Scope 2 and also addressing Scope 3 emissions that we generate, and our products generate. So we’re excited about being that leader and difference maker when it comes to oil and gas. But we’re also the leaders in carbon management. We started this platform a few years ago thinking about not only delivering our net-zero emissions, so a lot of it is self-help, if you will, but we also want to provide a solution to California to reach their own objectives. California has their own net-zero target, 400 million tons per year of CO2 emissions. Some critical industries, whether it’s power generation or cement or steelmaking, these are industries that are not going anywhere, and we can make them better by doing carbon capture, transportation of CO2 and storage of CO2. So we’re excited to be at the forefront of these technologies and these initiatives. And we are in the cusp of making this a reality by getting the first permanent sequestration permit in California. So it’s different because we are going to be better, we’re going to drive the industry to a place that makes it not only more viable for future generations, but also a differentiated view towards an offering for investors.
 

00:05:28 - 00:06:02
Lance Mortlock
So if I get this right, you were a traditional oil and gas company. You’ve evolved into a company that not only produces oil and gas, but now is trying to do that in a more sustainable way using technology like CCUS and other innovative technology. Are you guys doing direct-capture hydrogen, some other areas as well, or it’s really the focus from an energy transition perspective really around the CCUS? 
 

00:06:02 - 00:08:32
Francisco Leon
Yeah. We started the strategy more around CCUS. We come from, so I mentioned a spinoff from Occidental Petroleum, a world leader in CO2 and enhanced oil recovery. So that’s our foundation. That’s in our DNA. So when we’ve been looking at ways to capture CO2 from manmade sources, anthropogenically. We thought, okay, that’s a good solution. There’s no naturally occurring CO2 in California, so let’s do the manmade CO2, put it into the reservoirs and do enhanced oil recovery. That’s the genesis, but it’s evolved into much more of a leaving the enhanced oil recovery for other states to do. We’re going to do more permanent sequestration. And the idea was to bring this industrial-grade industries, industrial sources of CO2, but make them better. And that was the genesis or that was the start of that carbon management platform. But as the more we’ve dug in, the more we look at our positioning, our land ownership, our storage for space storage vaults to keep CO2 on the ground permanently, we really started breaking into this cleaner energy sort of investments. So whether it’s geothermal, hydrogen, renewable fuels, or as you mentioned, direct air capture, all these alternative drop in fuels and new forms of energy. In order for them to be clean, they also need a CCS solution. So I guess the best way to summarize it is we’re going to do both. We’re going to provide a solution to existing industries so they don’t pollute. And we’re also going to help enable new forms of technologies that are going to be clean at birth so that they will come out and be hopefully good replacement fuels for the future. All of it coalescing around a carbon storage business that we feel we have a significant lead in California, which is one of the most attractive markets. 
 

00:08:32 - 00:08:55
Lance Mortlock
So maybe, Francisco, for some of our listeners that might not know much about carbon capture, utilization and storage, which some people call or label it carbon sequestration. At a very high level, can you just describe what it is, how the process works, and why it’s important to the energy transition? 
 

00:08:55 - 00:11:09
Francisco Leon
Yeah, absolutely. So just to try to boil it down in the most simplistic way that I can. You have a power plant, as an example, a power-generating asset that provides the electricity for many of the towns in California. A lot of the energy produced in California is through natural gas combined-cycle power generation. So that has as a byproduct emissions. So, CO2 and pollutants that hit the atmosphere. It’s a necessary industry and we all need our lights to be on at all times, 24/7. But it is a polluting industry. So carbon capture and sequestration takes the ability to put different types of technology at the source, at the plant outlet, and get those emissions before, instead of going to the air, you basically are making a closed loop system where you capture those emissions and you funnel them down through a pipeline,  can be long range or short range, and then you have a storage site, like, our CO2 space to store that CO2 underground. So rather than it going up into the atmosphere, we’re able to securely, inject it into the reservoirs. Oil and gas companies are particularly well positioned to do this, given that we interact a lot with subsurface and we’re extracting oil and gas, we’re injecting water. A lot of companies already inject CO2 throughout the world. So we’re trying to replicate a proven method and a proven technology, but also doing it in a way so that we reduce the pollutants and the CO2 from the atmosphere. And now this is a good service and you can see the benefit from it, but it’s really enabled by incentives that the US government provides. Without those incentives that industry would not be possible today.
 

00:11:09 - 00:12:08
Lance Mortlock
Yeah. And it’s interesting. You’re probably aware of Pathways, the Pathways Alliance up here in Canada where the major oil sands producers have come together and they’re trying to negotiate with the feds and with the Province of Alberta to get the right level of participation and support to make the project the CCUS project economical. So I totally appreciate  where the California Resources Corporation is coming from with that point.  One question I wanted to ask, Francisco, is, I mean, we talked about you operating oil and gas assets alongside, how long is your CCUS as being up? It’s operational, right? So you’re already up and running and you’re sequestering carbon already? Or are you in the project phase? Like where are you at in the lifecycle as we speak now?
 

00:12:08 - 00:13:42
Francisco Leon
Yeah, we’re still in the permitting phase. We’re still not injecting CO2. We’ve done pilots in the past and have a significant amount of data that we’ve been working with the Environmental Protection Agency and other regulators to satisfy the conditions to get that permit. We should be getting this in 2024, this first permit ever. And that permit coming this year is going to be able to unlock the first project, which we would like to start injecting CO2 by late next year. And so we’re excited, as a first mover, we’re creating, there’s no precedent to this permit in California. In fact, it’s only been 2 or 3 permits ever granted in the US to do permanent sequestration. So we’re right there in terms of being first, driving a first-of-a-kind process. And that all should come together this year in terms of getting that permit, getting the project sanctioned, and if everything goes well and as expected, we’ll be injecting CO2 for first CO2 injection in California next year. So it’s all coming together. We’ve been working for over two years, getting permits from all the agencies. And we can see it. We’re near the finish line and excited to get there shortly. 
 

00:13:42 - 00:14:14
Lance Mortlock
Just thinking about your broader GHG emission reduction, I mean, despite that permit, you’re not operational on that. It sounds like, correct me if I’m wrong, Francisco, you have made other strides in terms of reducing GHG emissions already as a company. How have you been able to do that? Is that being methane capture, other asset-related investments? Can you talk a little bit about that?
 

00:14:14 - 00:17:11
Francisco Leon
Yeah, absolutely. So our assets are already, have one of the lowest carbon intensities in the US. And that comes from the way the industry ultimately extracts oil and gas in California. But we’re taking that to the next level by committing to reducing our methane emissions, in modifying our operations in where we’re needed to achieve those. Just to give you an example, we, the state of California launched some rulemaking that basically was looking for companies to reduce their methane emissions by 2030. Not only did we beat that goal by a significant amount, we beat that goal by over 50%. We came up with a new baseline to further reduce methane. And so basically what it entails is, you are eliminating the pneumatic devices and venting effectively is gone from our operations. And we’re able to have now some of the lowest methane of any oil and gas producer in the US. And we’ve been talking about how the steps we’re taking, we’re electrifying rigs as an example, and the steps that we’re taking, not only are we really proud about, in talking to our investors about the steps we’re taking this year, we brought in MIQ, kind of a world leader in third-party validation of emissions, to do a deep dive into our Los Angeles operations. Los Angeles and Orange counties. And they came in, we gave them full access, and they were able to give us the best letter grade that they have, which is an A for our operations, the first company in California and the US Rocky Mountain region to receive this grade A certifications. So it’s not only the commitment, it’s not only the execution, but also we’re in third-party validation in terms of certifying just how well run our operations are and our commitment to lower methane and ultimately all sorts of greenhouse gases from our industry. Again, our commitment to be different and better than we have been in the past. We take our stewardship of our environment and being better for the community very seriously, and are putting investment dollars to make sure that we eliminate as much of our emissions as we can from the production of oil and gas. 
 

00:17:11 - 00:18:31
Lance Mortlock
One of the things that I’m always looking for, Francisco, is what we can learn from each other. And I talked a lot in this on this podcast about the importance of alliances and partnerships and some of those partnerships, and lessons learned, I guess, that need to happen between countries. I think we can learn a lot from Europe, for example, as it relates to the massive transformation that’s going on in the utility space, particularly around electrification. And I also think we can learn from the US around CCUS and carbon sequestration as a country here in Canada. I guess if you were providing lessons learned around some of your pilot projects to Canadian sequestration entities, what would you say? We’re on the cusp of hopefully negotiating a Pathways Alliance project. We’ve had some success here in Canada. I mean, there’s the Quest project that you’d be familiar with. That’s been up and running a long time, operated by Shell. But what would be your advice to Canadian operators in terms of how to get CCUS right?
 

00:18:31 - 00:23:51
Francisco Leon
Yeah, I would start, there’s so many lessons, and I don’t want to speak to what Canada is doing well or not, but I’ll tell you what’s really worked for us is to have a very proactive engagement with communities. It’s having not only, it’s not about showing up with a project and saying, “Oh we need this approved, we’re going to build pipes, we’re going to do these projects near communities” and  try to sell them on the on the benefits of that, of that technology. It needs to start much earlier, and it needs to be a trust system of being able to showcase the long-term commitment to improvement of communities. And we found that has been an advantage here, by being proactive not only with people that are supporters of the industry, but also bringing in groups that tend to oppose oil and gas or CCS. There’s a lot of cool benefits. And highlighting those for communities has been, I would say, a big lift, big effort, but something that our team has done extremely well. So communities are critical in bringing jobs. We have a lot of our communities in California that have been traditionally oil and gas communities are concerned about the jobs going away with the transition, and we have the ability to really invest in great projects that have a lot of infrastructure build-outs and big facilities projects that can bring a lot of those benefits and great wages back into some of the Central Valley in California. I think most people associate California with Hollywood and beaches, certainly we have those. But most of the state is, especially in the central part of the state, they’re farmers, oil and gas producers. I would say the Central Valley looks a lot to me like Alberta does in Canada, just more of the energy hub for the nation up there. Here, Central Valley is the energy hub for the state. And so you can’t leave those communities behind and engagement has been absolutely critical for us. I would say the other one is, we developed this view, in a lot of the Western countries about not building big projects. The “not in my backyard movement” seems to dominate, at least California and in Europe, might be happening in Canada as well, but these are critical projects that need to be ultimately developed. And for us in California, the ability to have CO2 pipelines will be critical. We don’t have CO2 pipelines because we haven’t had a need to transport CO2 over long distances, and we transport pretty much any other form of gas. But CO2 is not something that’s in the legislative approval process yet. So we’re working hard to get those projects off the ground. So that means working very closely with regulators and legislators to, again, inform of the of the same benefits that you can bring to communities that you can bring to the state in form of taxpaying projects. And we’re working very closely with the unions, of California. We have a project labour agreement and we’re one of the very few companies that does that. In fact, we’re the only company in traditional EMP that has a project labor agreement with unions. And so again, it goes to our point about, it’s about three things. It’s about communities. It’s about jobs and it’s about the environment. All have to coexist in terms of making decisions. You can’t be singularly focused on one and not the other. It’s all three of them come together. So we are very comfortable with the technologies, with injection of CO2, there is a first-mover, what I would say a confident step taking as a first mover in the area of carbon management. It’s made us reassess how we engage with our broader stakeholders, whether it’s community or regulators, and think outside the box, because the traditional relationship we had is not going to work for energy transition. We need to kind of open ourselves to be a lot more willing to take on that feedback. And it’s early and often. It’s what we recommend.
 

00:23:51 - 00:24:45
Lance Mortlock
That makes sense. Maybe changing gears a little bit, Francisco. My maybe preconceived notion is that when it comes to CCUS, geology is really important. You need to have the right formations to store the GHG emissions. So if that’s true, does that make CCUS an isolated solution based on the geology, i.e. you need to have the caverns, the space under the ground, for our listeners, that allows you to inject the CO2 and store it there forever? Or is there potentially broader applications that aren’t so reliant on the geology? Maybe in simple terms, can you explain that to our listeners? 
 

00:24:45 - 00:29:34
Francisco Leon
Yeah. Geology is critical and it’s one of the big components for CCUS, but there is plenty of running room to be able to make this a large-scale solution. So it’s a little bit of both. It’s important, it’s critical, but it’s not the only factor to consider. So we need to have these reservoirs. So think about these big containers that are ultimately have not only the capacity to hold CO2, water, or oil and gas, but that they’re also not containers that are perfectly sealed. So you can have a balloon concept that maybe makes sense to some people. You have, you need to have a very high-quality balloon that you can put air, put water and be able to take it in and out. So those are the concepts. And there’s a lot of reservoirs in the world that can serve that purpose. And so, the geologic storage is important. And so we need to be at a certain depth, so we, California requires us to be up at 6,000 ft of depth. And you’re basically communicating to regulatory agencies that you have this perfect seal, except for the wells that are going to penetrate the reservoir and that are going to be able to keep the CO2 on the ground for decades and decades. We’ve had kind of anecdotally, Lance, I’ll tell you, there’s a couple of companies in California that had the ambition to do CCS. They had a great project doing some renewable a drop in fuel. And they basically came to us three years ago and said, well how hard can it be? We’ll just stick a well underneath our land and store it there. And that’s not the way this works. You have to have those geologic conditions. Otherwise, you’re not going to get any of the permits. Otherwise, you can’t guarantee that the CO2 will stay there. So geology really matters, but that’s where CRC is able to put a leading position and that’s what we are very confident. We’re going to be the carbon management company in California, maybe in all of the western US, because it does start with assets, the right assets in the right place. And we already have them. Now, it’s not the only thing that matters to it. You have to be near emission sources. If you’re in the middle of a desert and you have to put in thousands and thousands of miles of pipe, then you’re probably not going to have a very commercial project. So you need to have these reservoirs near areas where either you can have the existing emissions or where you can build new forms of energy, but then you’re close to markets. And so that’s what we really like, what we built in the central part of California and then the northern part of California, where we’re servicing in existing emitters, power plants, refining, and we’re also able to co-locate new forms of energy on top of our reservoirs. So but ultimately, yeah, geology matters, just like geology matters with oil and gas. Geology matters with CCS. And the nice thing that we have is, if you look at the minerals, we own land in both the surface and the minerals, which you need to have under California law to be able to extract oil and gas and also to inject CO2. We have identified about a billion metric tons of space. So empty caverns that satisfy the right conditions for permanent storage, over a billion metric tons in our lands that CRC already controls. So even though it is somewhat limited to geology, the right geology, the right conditions under the right operating stewardship of companies like CRC could be a phenomenal way to provide clean solutions for a state that desperately wants to develop them.
 

00:29:34 - 00:30:35
Lance Mortlock
Yeah. And it’s interesting. Because here in Western Canada, for example, we’re blessed with, obviously the energy and resources that the world needs, but also the geology that supports sequestration. So I think there’s a lot that we can learn from the story in California and apply some of those lessons learned to Western Canada. Maybe shifting gears again, I wanted to also hear your thoughts on carbon markets. In many jurisdictions, including Canada. I would say that the markets are immature, which creates carbon price and investment uncertainty. Maybe at this point, Alex, could you just maybe find the key carbon market-related issues that Canada is facing? Because I know you’ve done some research on this, and maybe just at a high-level kind of share that with Francisco and the listeners. 
 

00:30:35 - 00:31:24
Alexandr Kim
Yeah, absolutely. I was actually talking about this subject with our local EY specialist in ESG and carbon markets, and he directed me towards the Canadian Climate Institute because they published a report on the state of carbon pricing in Canada. And according to their study, the issue really stems from policymaking. Sometimes the policies could be inconsistent in terms of pricing, which emission scenarios they apply to. The process seems to be lacking transparency and maybe even to Francisco’s point earlier, you need to have clarity to justify investment cases, have the long-term viability for the projects, and those seem to be undermined by maybe policy that should be slightly better. It looks to be that consensus. 
 

00:31:24 - 00:31:39
Lance Mortlock
Yeah, that’s helpful. Alex, I imagine that you might be, Francisco, grappling with similar issues in California. How does CRC manage that kind of risk across your projects? 
 

00:31:39 - 00:36:05
Francisco Leon
It’s a rapidly changing landscape, but we are at a place where we have incentives and tax break subsidies that ultimately will be the launching point for CCS. We a few key decisions have come together over the last two years. First, with the federal government under the Biden administration by super-boosting the carbon business model by doing through the Inflation Reduction Act, by providing enhancements to existing incentives around carbon sequestration. So as an example, we now have $85 per metric tonne of CO2 stored, and if it’s permanent sequestration, it’s lower. If it’s enhanced our recovery, but because we’re going into permanent sequestration, then we have access to that higher credit, which the federal government guarantees for 12 years. So that was an important step in the direction to really help these projects become viable. But ultimately, that’s not enough. it’s not enough to drive the industry. That’s where you come back to California, then the state aspect of this is really valuable because California’s been wrestling with ways to lower carbon intensity, of all of the fuels that are consumed in California, now for over a decade. And so they have this California program called the LCFS or the Low Carbon Fuel Standard, that also incentivizes the reduction CI to a credit. So you’re able to combine kind of the best of both programs to provide a nice incentive, to make these projects viable and to get the right return on capital to make these projects commercial. So we do need, in the US at least, the regulated market or the regulated incentives to come through and create a market. Now, California has an extra enhancement, interestingly enough, we use the concept of carrots and sticks. Talk about carrots, the carrots would be all the incentives that we’re talking about, LCFS or 45Q through the Inflation Reduction Act, but you also have a stick. The stick is a carbon tax. We pay greenhouse gas taxes, about $40 per tonne. Any emitter, any industrial emitter in the state of California has to pay a tax through cap and trade that’s increasing every year. So you have a forcing mechanism on one end for avoidance. But you also have incentives on the other end. So it makes it economically very viable to be looking at carbon sequestration as a real solution to avoid the tax but also get paid some enhanced incentives. We do see a voluntary market ultimately growing, in particular around direct air capture. We see big companies that have hard-to-abate emissions throughout the world wanting to buy a high-quality credit from direct air capture, a little bit of blockchain technology where you can only buy one molecule, and you own the storage of that CO2 into the ground. There’s some interesting, in really fast-developing views around how the voluntary market will participate in carbon sequestration. But we see that more as a need to have for longevity of the space, in the near term we need that government support both ways to be able to get these projects off the ground.
 

00:36:05 - 00:36:39
Lance Mortlock
And that maybe leads me to my last question, which is what is the role of government in carbon management and the energy transition? How does CRC collaborate with policymakers? And if you can share which regulations have helped California encourage more CCUS deployment in the state. Is it simply money? If money is put on the table, whether it’s through tax incentives or other instruments, that helps these projects go forward? Or is it more nuanced than that?
 

00:36:39 - 00:40:46
Francisco Leon
No, there’s much more to that. It’s not just money. Money, incentives and the ability to make the return on capital is critical to any business. So there’s no question about that. But that’s not the only part of that that’s going to make this successful. To maybe start at the California perspective, you have, it’s very helpful to have a state that has the ambition that California does. So it’s not just, I would say, wishful thinking. It’s a matter of law that we need to decarbonize. So that is an important element of commitment to get these projects off the ground. But beyond that, the California government, put the, what’s called the California Air Resources Board in charge of developing alongside with academia like Stanford, to figure out, okay, how do how do we best decarbonize as a state? What is practical? What are the real solutions out there? And they put in a scoping plan that lines out how the state was going to reach net zero over a couple of decades. So that framework and thinking around technologies, around incentives, around taxes, that is all a very comprehensive view of what ultimately the rules of the road are, so that we can have a framework from which to operate. And it’s in that analysis that the state of California decided that carbon sequestration, so CCS, would play a significant role in the decarbonization of the state. So then that’s when you have incentives that are critical to get the projects off the ground, so that framework and incentives are important. But then you have to also develop the permitting. In a lot of ways, this is a really innovative, unique new forms of permitting. So you have to get a very well-coordinated regulatory agencies to work in concert to make sure they not only have the right understanding of the objectives, the right understanding of the law, but ultimately have the right funding in the right resources to be able to develop these projects. And I would say that’s where we are today. The incentives are there, the mission statement is there. It’s in the permitting process where there’s a lot riding on decisions made by all these agencies, not only to create the first project, which we’re confident is going to be a CRC project but have hundreds of other projects that would follow that are needed for the state to reach its decarbonization goals. The federal government in the US is trying to do something similar, much harder to do it, it should take all of the United States in trying to achieve similar objectives, but there’s a lot of ways that California set the example on what to do. And in some cases, what not to do to drive this industry forward. And now we have a decade of experience in terms of putting that together. So in a nutshell, you do need the incentives, but it’s helpful, very helpful to have the government support and commitment. And then you have to have working very well in concert with regulatory agencies so that we can permit. And all of this needs to be done with a somewhat of a sense of urgency, because the investment dollars are finite and there’s going to be competition.
 

00:40:46 - 00:41:14
Lance Mortlock
Maybe one last quick question. With an election in the US coming in November, if Trump gets into power, does that change everything if he kills the IRA, from a policy perspective, what does that mean for organizations like CRC, where he comes into power.
 

00:41:14 - 00:42:01
Francisco Leon
Yeah. So we don’t think it puts a risk if you have a change in government. In many reasons, we see carbon sequestration, CCS, as a bipartisan issue. If you look at, from an ideologic sense, the Democratic Party has been the big driver of all these incentives. So that would be, to your point, I think there might be at risk. But if you look at where the incentives have gone, they’ve gone to the so-called red states, so Republican states. It’s really Texas and Louisiana that have embraced not only CCS and they have the right geology, but they’re the ones that are getting the majority of the incentives, federal incentives. 
 

00:42:01 - 00:42:03
Lance Mortlock
Interesting, that’s very interesting.
 

00:42:03 - 00:42:41
Francisco Leon
Yeah, we think it works, and we don’t think it’s mutually exclusive. That’s where our platform at CRC is towards the winning strategy because it’s not an either-or. We can do both traditional energy better than anybody has done it in the past. And we can also bring carbon management as a solution to make that industry better alongside other industries. We don’t think we have to pick one or the other. We will show over time how we can have true leadership in both traditional energy and new forms of energy, all underpinned to carbon management. 
 

00:42:41 - 00:42:58
Lance Mortlock
That’s great. And you know what? That’s a really great point, I think, to kind of close this conversation down and maybe I’d just say thank you for your time and insights, Francisco. Fascinating to talk to you. 
 

00:42:58 - 00:43:30
Francisco Leon
Lance, thank you so much for giving us some space in your podcast, appreciate the opportunity to talk about CRC and, yeah, look forward to continuous engagement and hopefully a lot of good lessons learned and collaboration that can happen between Canada and California. The parallels and the synergies are there already and maybe it’s something that we can talk about more of binational set of strategies. So thanks again.
 

00:43:30 - 00:45:40
Lance Mortlock
Yeah. No, that’s awesome, Francisco. Look, it was a pleasure talking to you about the California Resources Corporation and the role of carbon management, I think, in the energy transition. For our listeners, if you have your own questions or queries, you can reach out to EY via the attached contact details. Finishing yet another great conversation and episode, I’d like to share maybe a few kind of final thoughts with our listeners. One, I think CRC is at the spearhead of the energy transition. As Francisco said, the organization is focused on delivering low-intensity carbon products while also leveraging the offering carbon management solutions. I firmly believe that this is one of the key pathways to delivering sustainable, equitable and secure energy, which I’ve been talking a lot about. Secondly, CCUS has a growing presence with lots of opportunities. Carbon sequestration can offer a significant growth potential and expand influence for oil and gas producers like CRC. However, the tools and technologies still need some refinement, and I think we heard some of that from Francisco today, before we can yield long-term sustainable and economic benefits. And finally, effective messaging of CCUS I think is critical. CRC’s initiatives are expected to have substantial impact for them on the energy transition. I think it was very interesting to hear about the potential carbon sequestration opportunities and benefits. We need to make sure that the upsides are widely heard across the industry and the entire society to amplify the positive messaging for the oil and gas sector, which is particularly important, I think, in Canada and the US right now. So once again, thank you to everyone for joining our podcast. We’ll see you on the next episode.