Water Conservation and Recycling

California Resources Corporation (CRC) serves the state as a net water supplier by extensively reusing, recycling and reclaiming water from oil and natural gas formations that would not otherwise be available. Because water conservation is such a high priority for the state, CRC has adopted a 2030 Water Sustainability Goal to significantly increase the volume of produced water we reuse, recycle or reclaim by 30 percent against a 2013 baseline. This goal is important because it reflects the beneficial use of produced water from underground oil and gas formations that is only accessible to contribute to the state’s agricultural or industrial water supply because of in-state production. As of 2019, we are nearly halfway to our targeted increase in our water recycling volume and we are on track to achieve our 2030 Water Sustainability Goal. We also apply two annual Sustainability Metrics for water recycling and conservation that are described below and are part of the incentive compensation for our management team and all employees.

CRC’s hydrologists, environmental scientists, engineers and operations personnel work diligently to implement conservation and recycling projects that decrease our fresh water use, develop alternative water sources like repurposing treated produced water from oil and gas formations, and help to sustain fresh water resources in the communities where we operate.

CRC’s investments in water conservation and recycling directly advance the state’s policy under Water Code Section 106.5 that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. The state’s Water Conservation Act of 2009 mandated a 20-percent reduction in statewide water use by 2020 to be achieved through implementation of best management practices and optimization of water reclamation opportunities in the urban, industrial and agricultural sectors. The State Water Resources Control Board (State Water Board) and the Regional Water Quality Control Boards (Regional Boards) have also expressly encouraged the use of recycled water to reduce demand on potable (i.e., drinking water) and other fresh water sources. In particular, these agencies have sought to restrict the use of potable water for non-potable uses wherever recycled water is available. CRC has demonstrated our commitment to conserve potable water and to reuse, recycle and reclaim other water supplies, both in recent drought years and in our 2030 Sustainability Goals (JPG).

The vast majority of water managed by CRC, called “produced water,” occurs naturally in hydrocarbon formations and is brought to the surface during the production of oil and gas. CRC separates produced water, which has natural salinity and minerals, from the produced oil and gas. In 2019, 90 percent of our produced water was reused, recycled or reclaimed, with the remainder disposed via reinjection into zones designated by regulatory agencies. California Senate Bill 1281 requires California oil and gas producers to submit detailed quarterly reports on sources and disposition of water used in their operations, which is publicly accessible through the California Geologic Energy Management Division (CalGEM) website.

We directly reuse or recycle 78 percent of our produced water in our improved or enhanced recovery operations, typically in a closed loop system by reinjecting it into the same oil and gas reservoirs from which it came. Even though recycled produced water is already our primary water source for our operations, we have invested in significant water recycling and treatment facilities to ensure that our fresh water use does not affect the availability of high-quality water to cities, towns, farms and ranches around our operations. For 2020, we established a water recycling sustainability milestone project to design and permit a pipeline system at Elk Hills that will redeploy more of our surplus produced water to areas of the field for reuse in waterfloods and pressure maintenance to prepare for future carbon dioxide injection in our CalCapture carbon capture and sequestration system. This project will help to advance our 2030 Water Recycling Sustainability Goal.

Our water reclamation investments have similarly enabled CRC to expand our role as a net water supplier to agriculture every year since our formation, supporting over 5,000 acres of productive farmland and associated farmworker jobs.

In 2019, we supplied over 5.35 billion gallons of treated, reclaimed produced water for agricultural water districts, 12 percent of the volume of produced water we generated. This delivery set a new company record and reflected a doubling of our reclaimed water volume since 2015. For every gallon of fresh water we purchased in 2019 for our statewide operations, we supplied 3 gallons of reclaimed water to agriculture. Our reclaimed water is blended with water that the agricultural water districts obtain from other sources. The reclaimed water and blended irrigation water are sampled and analyzed on a monthly and quarterly basis by an independent state-certified laboratory for up to 120 compounds and reported in a publicly accessible format to the Regional Board to ensure that the water used for irrigation or recharge meets water quality permit requirements. Moreover, water districts and the state’s Food Safety Expert Panel have also conducted crop sampling to validate the safety of reclaimed produced water for irrigation.

In 2019, we achieved our maximum water delivery to agriculture, since we recycled or reclaimed nearly 100 percent of the produced water from steamflood operations at the Kern Front field. Our 2020 reclaimed water volume is expected to decrease modestly since a neighboring Kern Front operator shut-in wells and is no longer supplying produced water to us for reclamation. We continue to evaluate projects to replace fresh water with recycled water in our operations wherever feasible and to reclaim even more water for beneficial uses. Recycling and reclaiming produced water add a new source for agriculture and industry to California’s water balance and extend supplies from existing water sources. Through our internal reuse and recycling and our supply of reclaimed produced water for agriculture, we help the state to sustain fresh water resources for cities, towns, farms and ranches, as well as for wildlife in river ecosystems.

Our Board of Directors has adopted an annual Water Conservation Sustainability Metric to measure our performance as a net water supplier to agriculture. The water conservation ratio is our volume of reclaimed water delivered to agriculture divided by our total purchased volume of fresh water. A ratio above 100 percent means that we are a net water supplier. As described in our most recent Proxy Statement, this metric directly affects the incentive compensation of our management team and all employees. As shown in the graph below, in 2019 we continued to improve our water conservation ratio.

CRC is Consistently a Net Water Supplier

 

Because of our focus on using recycled produced water and non-fresh water sources, only one-third of the fresh water we purchase is used in our upstream oil and gas operations. About 56 percent of our purchased fresh water is used in power plants to generate electricity at Elk Hills and Long Beach; and the remaining 11 percent is used in our farming operations on land that we own. During the height of the drought in 2016, CRC voluntarily reduced our use of fresh water from a local water district by 43 percent, allowing that district to meet its mandatory state water restrictions without curtailing its municipal or agricultural customers.


  Water Volume in Acre-Feet Percent Change
Water Category 2015 2016 2017 2018 2019 2015-2019
Potable Water Purchased 574 462 412 619 481 16.2% decrease
Non-Potable Fresh Water Purchased 4,551 4,269 4,795 5,262 4,960 9% increase
Total Fresh Water Purchased 5,125 4,732 5,207 5,881 5,441 6.2% increase
Reclaimed Water Delivered to Agriculture 8,144 12,101 15,035 16,214 16,405 101.4% increase
CRC Water Conservation Ratio Metric (Reclaimed Water to Ag over Purchased Fresh Water) 159% 256% 289% 276% 302% 89.7% increase

 

Definitions Applied by CRC

  • Fresh Water: Water typically purchased from municipal sources, water districts and water companies that requires little or no treatment for use. Fresh water may be potable or non-potable.
  • Potable Water: Water that is suitable for drinking and residential use.
  • Non-Potable Fresh Water: Fresh water that is not suitable for drinking or residential use without treatment but may be used for agriculture or other uses.
  • Non-fresh Water: Water from sources like reclaimed municipal wastewater, collected storm water or agricultural runoff that requires a significant amount of treatment before it can be used.
  • Reclaimed Produced Water: Produced water that has been treated by separation of oil, gas and solids for delivery to agricultural water districts for use in irrigation or recharge.
  • Recycled Water: Water that is treated to remove solids and impurities and reused.

In light of CRC’s detailed public reporting to state agencies of our water sources, uses and quality, we do not participate in the CDP water questionnaire, which applies terminology and criteria that differ significantly from our California focused reporting.

Learn more about CRC’s commitment to water conservation and recycling by viewing our Water Brochure (PDF) and our CRC’s Long-Term Commitment to Safety and Sustainability (PDF) infographic.

CRC Highlights

  • Supplied over 5.3 billion gallons of treated, reclaimed water for agriculture, a new company record
  • Delivered 3 gallons of treated, reclaimed water for every gallon of fresh water CRC purchased
  • Recycled or reclaimed 90% of our produced water, a 10% increase since 2015
  • Reduced produced water disposal by 46% since 2015
  • Reduced potable water use by 16% since 2015.