Under the Low Carbon Fuel Standard (LCFS), crude oil producers may generate credits for oil that has been produced using innovative methods and delivered to California refineries for processing. Holmes Western Oil Corporation (Holmes) has applied for the approval of a solar generated electricity project, for producing crude oil at the Midway Sunset Oil Field.
The Holmes Solar Project is a 1.12 megawatt (MW) direct current, 0.876 MW alternating current, solar array using fixed-tilt mounted solar photovoltaic panels, located in Kern County at Holmes’ Midway Sunset oil field. In 2017, the oil wells connected to the solar system produced 332,600 barrels (bbl) of crude oil. Holmes holds additional leases on wells that produce crude oil in the Midway Sunset field that are not connected to the solar field.
Construction of the Solar Project was completed in July 2017, but is currently operating at partial capacity until Pacific Gas and Electric Co. (PG&E) completes necessary mitigation work on their electric grid. Once the upgrades are completed, the system will be fully operational in approximately mid-2018.
The solar project in full operation will generate approximately 1,849,931 kilowatt-hours (kWh) annually. Applicant states that in full operation 1,738,935 kWh (ninety four percent) of the produced solar electricity will be consumed onsite by Holmes’ crude oil production equipment, and another 110,996 kWh (6 percent) will be delivered back to the utility using a Net Energy Metering (“NEM2”) tariff. In current partial operation, the system is generating 511,013 kWh (twenty seven percent of the full operation), all of which will be consumed onsite.
The estimated potential for innovative method credit is about 889 metric tons (MT) for the first twelve months of full operation, or 261 MT for its current partial operation.
ARB staff says that Holmes meets the eligibility threshold of 0.10 grams of carbon dioxide-equivalent emissions per mega joule (gCO2e/ MJ) carbon intensity (CI) reduction for both partial and full operation based on estimated operating conditions.