New state law boosts Kern County oil permits; data center project also in works
A new California state law (SB 237) has led to a significant increase in oil drilling permits in Kern County, streamlining the process for companies like California Resources Corporation and Chevron. Additionally, California Resources Corporation has submitted a conditional use permit for a data center project at its Elk Hills property, detailing plans for a closed-loop cooling system and power from an existing 550-megawatt plant.
California's new state law, SB 237, which took effect on January 1st, has dramatically increased oil drilling permits in Kern County by allowing the state to defer to the county's environmental review process. Industry leaders, including California Resources Corporation (CRC) and Chevron, report that this legislative change has made the permitting process more predictable, fostering new jobs and investment. Brent Ilott, CRC Vice President of Operations, stated that the law streamlined surface permitting requirements, resulting in CRC receiving 193 out of 194 applied permits for its 2026 drilling needs. Ray Thavarajah, Chevron's General Manager of Operations, added that the permits help sustain production and maintain jobs, countering a previous slowdown in investment. Frank Rodriguez, a district manager with Halliburton, emphasized the stability the permits bring to the industry.
While environmental groups like Consumer Watchdog and FracTracker express concerns about increased drilling, Ilott noted that SB 237 includes provisions prohibiting new wells within 3,200 feet of sensitive receptors like homes or schools, and existing regulations for environmental scrutiny remain. Both CRC and Chevron anticipate Kern County maintaining its energy leadership, contingent on clear regulations, timely permitting, and community support.
Separately, California Resources Corporation is advancing a data center project at its Elk Hills property. Ilott confirmed the company has submitted a conditional use permit for the development, which is projected to create 200 to 250 permanent jobs within five years. The data center is designed with a closed-loop cooling system, requiring an initial 600,000 gallons of water (equivalent to about six homes' annual usage) and an estimated 6,000 gallons per year thereafter. Critically, the facility will be powered by CRC's existing 550-megawatt power plant, ensuring it will not require increased purchased natural gas.