Ahead of the 2026 Carbon Solutions Forum, Energy Dialogues sits down with senior leaders shaping the next phase of carbon management across the energy sector.

In this speaker preview interview, Francisco Leon, President and Chief Executive Officer of California Resources Corporation, discusses how carbon capture, utilization, and storage, low-carbon fuel pathways, and firm low-carbon power are becoming central to California’s energy and emissions strategy. The conversation explores lessons from permitting the state’s first Class VI CCS project, the role of market signals and policy frameworks in scaling CCUS, and how differentiated low-carbon energy products can support both climate objectives and energy security.

This interview is part of the Energy Dialogues Speaker Series and our ongoing commitment to convening pragmatic, solutions-focused conversations on carbon management. As we build toward the Carbon Solutions Forum, we are engaging early with leaders and practitioners whose experience will help ground the discussions in real-world deployment, market dynamics, and policy execution.

Francisco, thanks for joining us in this preview to the Carbon Solution Forum. California is at an inflection point on firm low-carbon power. How is CRC positioning Carbon TerraVault to help the state meet surging demand from data centers and industry while staying aligned with CPUC and CEC decarbonization goals? What signals or policy mechanisms are most critical for natural gas + CCS to play a meaningful role in California’s path to net zero power?

We agree with the CEC that natural gas power generation is critical for grid reliability and affordability, especially as demand increases to meet California’s electrification goals and AI load growth. Decarbonizing the grid on a 24/7/365 basis using renewables paired with storage alone is likely to be prohibitively expensive, a conclusion supported by research from institutions such as Oxford and Stanford.  This is where natural gas with carbon capture and utilization and storage (NGCCUS) could deliver a win for the state’s net zero goal while balancing reliability and affordability, and this is how we have positioned Carbon TerraVault (CTV) to solve some of the biggest challenges facing California.

The most critical policy mechanisms to advance NGCCUS projects are the Cap and Invest (C&I) rulemaking under the California Air Resources Board (CARB) and the Reliable Clean Power Procurement Program (RCPPP) under the California Public Utilities Commission (CPUC). CARB should allow for straightforward reductions in reported emissions when emissions are captured and sequestered by CCUS projects. That will reduce C&I fees and help underwrite CCUS investment. The RCPPP governs how California expects to reach its 100% renewable and carbon free energy goal by 2045, and including NGCCUS as an eligible zero-carbon resource will support utility procurement of the decarbonized electrons.

CRC is developing the first Class VI-permitted CCS project in California. What have you learned from permitting and project development that could shape future hubs in the state (particularly around subsurface characterization, community engagement, and coordination with CARB, CPUC, and EPA)?

Early engagement with communities and regulators is the key to project success. CTV I is our first fully permitted Class VI reservoir in Kern County that is poised for first injection early this year, and we have six additional Class VI permits in advanced stages of EPA review. In October of 2024, our CTV I Conditional Use Permit was approved unanimously by the Kern County Board of Supervisors demonstrating the strength of our application and the alignment between the project and the county’s goals. 

Undertaking a CCUS hub project requires a web of collaboration and partnership between businesses, communities, scientific and research institutions, local, state, and federal government and requires capital investment in the billions of dollars. This is nearly as complex as infrastructure projects get, but the north star in California is decarbonization.  Many of our peers consider California to be hostile to business and large infrastructure projects, but we see the collective vision of a decarbonized economy as a strategic advantage. If we can remove hurdles in regulation and policy, we can deliver CCUS solutions at scale.

With California’s reliance on imported crude increasing and infrastructure constraints limiting in-state options, how is CRC making the case that lower-carbon local production contributes to both climate and energy security? Is there market demand for differentiated low carbon intensity (CI) production (working with frameworks like MiQ and developing environmental attributes)?

In the 1980s, California produced over 60% of the crude it refined in state, and until 1997, we imported less than 10% of the crude we refined from foreign countries. Since then, that balance has inverted. In 2024, California produced only 23% of the crude it refined and relied on foreign imports for over 63% of our demand.  

In the 2025 legislative session, we saw an important course correction in Sacramento. Senate bill 237 set a target for in-state crude oil production to meet 25% of demand, which could pave the way to increase the supply of crude produced in the state and halt the decades long downward trend. Meeting in-state demand with in-state production is important in a few fundamental ways. 

1. Barrels produced in California support California jobs and generate tax revenue for local and state government.
2. Producers overseas are not subject to the strict environmental and human rights standards that apply to California producers, including the Cap and Invest rules aimed at reducing CO₂ emissions. When we import from countries without these safeguards, our environmental leadership is undermined. 
3. Relying on imports exposes California’s businesses and residents to potential energy shortages due to global oil market volatility. 
4. California refineries were built to process the specific chemistry of California crude, and importing crude from overseas has required expensive retooling at refineries, which can be passed on to consumers at the pump.

In terms of market demand for low carbon intensity energy products, we are actively building a market for these environmental attributes. Many sectors, especially hard-to-abate, will rely on traditional fuels for decades to come, and we see a market for differentiated traditional fuels in addition to alternative fuels. 

For example, there is much emphasis on sustainable aviation fuel (SAF) in the airline industry, and even if airlines meet their 2030 targets, the vast majority of the fuel mix will continue to be traditional jet fuel.  We think low carbon intensity crude oil (as a precursor to jet fuel) represents an important complementary product to SAF for the airline industry that addresses value chain emissions. We are eager to explore these innovative opportunities.

CRC is returning to the Carbon Solutions Forum and now becoming a Strategic Partner. What makes the Forum a valuable platform for your team this year?

We believe California can be the leader in carbon management, so supporting a conference on this topic in our backyard was an easy decision for our team. At our core, we are an upstream oil and gas company producing essential energy for California, but we are also a different kind of energy company that recognizes tremendous growth opportunities in alternative energy and CCUS projects in the state. The Energy Dialogues team has assembled the right group of people to advance carbon management initiatives, and my team and I look forward to engaging with our peers at the Carbon Solutions Forum in San Diego next month.