California Resources Corporation (CRC), the state’s largest oil company, has proposed constructing a substantial data center campus inside the Elk Hills oil field in Kern County’s Central Valley. The facility, intended to support AI-related operations, would occupy 600,000 square feet and rely primarily on power generated by an existing natural gas plant near the site.
This proposal marks a broader trend of situating data centers near or within oil and gas infrastructure, aiming to take advantage of existing energy supply while reducing resistance often encountered from residential communities raised over noise, water usage, and electricity costs. CRC believes that placing the project at this remote industrial location could ease local opposition since the nearest homes are more than a mile away and the area has a history of heavy industrial activity.
The Golden Valley Technology Hub, as the project is known, plans to operate using surplus electricity from a 550-megawatt natural gas plant on site and include water-saving closed-loop cooling systems alongside noise barriers and investments in local infrastructure. According to CRC’s chief sustainability officer, the development will create jobs and generate tax revenue while minimizing impacts on the surrounding communities and addressing the state’s growing digital infrastructure requirements.
However, environmental advocates remain skeptical. Critics emphasize that relying on natural gas power contradicts California’s clean energy goals and could exacerbate pollution problems in this region, which already faces poor air quality. The move to an oil field does not allay concerns about the environmental footprint of data centers, given their significant electricity and water consumption. Opponents argue that situating data centers in oil fields merely displaces the negative effects rather than eliminating them.
California’s tension between expanding digital infrastructure and advancing clean energy policies fuels this debate. Data centers are critical for AI, cloud computing, and other digital services, but their increasing demand for power puts strain on electricity grids and natural resources. Finding suitable locations that balance technological growth with environmental and community well-being remains a challenge.