CIPA ANNUAL MEETING

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“Repurposing Legacy CA Oil Production Assets”

13 June 2026

Prof. Donald L. Paul

William M. Keck Chair of Energy Resources

Executive Director of the USC Energy Institute

Outline

• Opening remarks
• The evolving California energy system
• Repurposing legacy oil assets: wells, pipelines, and co-gen
• Summary comments

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Energy systems are multi-dimensional

Science and Technology

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Business, Investment, and Economics

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Government and Regulation

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Societal Expectations and Consumer Behavior

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Energy systems are multi-dimensional

Science and Technology

+

Business, Investment, and Economics

+

Government and Regulation

+

Societal Expectations and Consumer Behavior

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Business decision factors:

Scale

Time

Capital

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• California’s electricity demand is shifting from long-term stability toward structural growth driven by electrification and digital infrastructure.
• Recent California Energy Commission forecasts explicitly account for transportation electrification, behind-the-meter solar, and data center growth.
• As a result, the state needs more capacity that better balances variable and base load sources.
• Legacy assets can be evaluated against future grid conditions and power growth demands in addition to their historical oil-field roles.

California’s power demand profile is changing

CA electric generation capacity by fuel (ref. CEC)

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CA electric generation by fuel (ref. CEC)

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Capacity Utilization Factor (CUF)

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CUF = (actual electrical energy output over a given time period) / (nameplate energy output capacity x given time period)

Total U.S. power grid capacity utilization factor�1965 to 2025

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Capacity utilization factors by power generation source

• Baseload: Nuclear, Coal, and Geothermal ~ 70% to 90%
• Baseload and backup: Natural Gas ~ 40% to 80%
• Baseload and variable: Hydro ~ 40%
• Variable: Wind and Solar ~ 15% to 40%

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• U.S. Grid Average Today ~ 70%

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Energy storage at scale can convert variable sources to baseload sources

The scale of data center power demand

• Small data center: 1MW to 5MW
• Medium data center: 10MW to 20MW
• Large data center: 50MW to 100MW
• Hyperscaler data center: 500MW+
• Hyperscaler data center complex: 2000MW+

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• The California Energy Commission identifies data centers as a meaningful and growing contributor to statewide peak demand.
• In early 2026, data centers accounted for roughly 1,000 MW, or about 2% of CAISO peak demand, with projections rising to approximately 4,500 MW and 9% by 2040.
• EV charging, building electrification, and climate-driven cooling add further pressure to the system.
• These trends increase the value of location-specific infrastructure and local resilience.

New CA power loads are material

Repurposing legacy oil assets: �wells, pipelines, and co-gen facilities�

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• California has roughly 35,000 wells classified as idle.
• AB 1866 raised idle-well fees and strengthened elimination requirements beginning January 1, 2025.
• The state’s primary concern is environmental and fiscal liability, especially when operators become insolvent or abandon wells.
• Industry is concerned with maintaining sufficient operating scale to maintain economic viability.

Idle and Abandoned Wells: the California context

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• Thermal energy storage concepts that pair sealed wells with surface heat-exchange systems.
• Carbon management support roles, including subsurface monitoring applications.
• Geothermal heat—and in select cases, geothermal power—using existing wellbores.
• Groundwater and environmental observation uses where long-term monitoring value exists.

Wells: Potential repurposing pathways

W. Bartling - Geo2Watts LLC - USC AI and Geothermal Energy

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26 May 2026

Key Performance Metrics from Preliminary Modeling

W. Bartling - Geo2Watts LLC - USC AI and Geothermal Energy

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26 May 2026

Momeni 2026 internal document

A single well is not a utility-scale plant. The battery becomes powerful when clustered across dense well fields.

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Quoted from www.crc.com/carbon-terravault

CRC / CTV CO2 Management

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Quoted from www.crc.com/carbon-terravault

2023 CA GHG inventory by sector (CARB 2025)

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• Key technical factors include depth, bottom-hole temperature, casing condition, cement integrity, and isolation of hydrocarbon zones.
• Project viability also depends on interconnection access, industrial heat and power demand, land rights, and proximity to sensitive social infrastructure.
• Corrosion, incomplete legacy data, and leakage risk can quickly disqualify candidate wells.
• Many wells will still likely be better candidates for plugging than for reuse.

Wells: What determines repurposing feasibility?

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• Pipelines preserve rights-of-way, corridor value, and sunk capital.
• In the right corridor, conversion may be faster and less expensive than building entirely new infrastructure.
• The central question is whether the new service matches the pipeline’s metallurgy, pressure rating, and route value.
• Without that match, conversion costs and risks can rise quickly.

Pipelines: Why repurpose them?

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• Carbon dioxide transport to support carbon capture and sequestration systems.
• Produced-water or reclaimed-water transport where water infrastructure is especially valuable.
• Hydrogen blending—or in select corridors, dedicated hydrogen service.
• Large-scale fiber optics transmission fairways.
• Industrial utility or district energy service in advantaged local cases.

Pipelines: Main reuse cases

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• These sites often already include grid interconnection, switchyards, thermal systems, industrial loads, and experienced operating staff.
• These attributes may make them more practical and immediate transition candidates than many other oil-and-gas assets.
• Potential future roles include resilience and energy security hubs, microgrids, thermal storage sites, or cleaner CHP platforms.
• Their value is highest where local reliability and industrial heat demand remain important.

Co-Generation CHP Facilities: Why they stand out

Scale: prominent CA oilfield co-generation facilities

• Sycamore Cogeneration Facility (Kern River): 300 MW
• Midway-Sunset Cogeneration Facility: 225 MW
• Belridge Cogeneration Plant: 60 MW

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• California’s evolving demand structure will require more baseload power capacity to better balance with variable renewable generation.
• Potential value streams include electricity sales, thermal services, resilience and energy security benefits, carbon management fees, and avoided current carrying costs and future P&A costs.
• Key sensitivities include regulatory constraints, power prices, carbon value, interconnection delays, and technical failure risk.
• In many cases, repurposing will not be economic, unless the asset offers a strong location or infrastructure advantage.

Summary Comments:

What could make repurposing work?