A solution to data center backlash? Put them in oil fields.
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- California Resources Corporation unveiled plans for a 600,000-square-foot "Golden Valley Technology Hub" data center on 100 acres in the Elk Hills oil field, partnering with developer Beacon, with roughly a year of environmental review ahead.
- The project will draw nearly all its power from an existing 550-megawatt natural gas plant on the field that now runs below capacity because Elk Hills' crude production has fallen sharply; CRC says cooling will consume water equivalent to one Olympic swimming pool over 10 years.
- Earthjustice and other climate groups disputed CRC's "responsible development" framing, arguing that running a California data center on fossil fuels worsens air quality in an already heavily polluted region and pulls the state backward from its clean-energy buildout.
- CRC plans to attach a carbon-capture system to the gas plant supplying the data center; its existing first-of-its-kind pilot captures about 7 percent of the plant's emissions, though the company says it has underground storage capacity for several hundred times that amount.
- The deal fits a wider trend: Chevron has signed on to supply methane to a Microsoft data center in west Texas, and similar projects are being planned in Pennsylvania's shale patch and Texas's Permian Basin, where excess gas would otherwise be flared or vented.
- Kern County's oil and gas employment has roughly halved since 2015 (about 12,000 to 6,000 jobs), and CRC's permit application included about 150 resident signatures backing the project — at least five of them affiliated with the local oil industry.
Why it matters: For declining producers like CRC, plugging underused gas-fired capacity into AI compute offers a lifeline as California's gasoline demand has fallen about 15 percent and crude output by more than half over the past decade. But for the state's climate posture, a fossil-fueled data center in Kern County hands oil companies a 'responsible development' cover story that Earthjustice and others call greenwashing — and gives the industry a fresh argument for keeping aging fields alive.
