Renewable Oil? Chevron Plans Solar-Produced Hydrogen at CA Oil Field

Chevron New Energies, a unit of oil and natural gas giant Chevron, plans to build its first 5 MW hydrogen production plant in California’s Central Valley. The installation will churn out more than 2 tons of hydrogen daily, supporting the company’s newfound expansion into commercial hydrogen production. 

The project will focus on what Chevron calls “lower carbon intensity hydrogen,” which includes electrolysis powered by resources with little to no greenhouse gas emissions. While conventional grey or blue hydrogen production relies on fossil fuels, low-carbon hydrogen uses renewable electricity, such as solar panels, to power electrolyzer equipment to split water into oxygen and hydrogen. 

Chevron’s electrolyzer will be powered by an existing solar photovoltaic (PV) installation at its Lost Hills Oil Field. The system will receive non-potable water (unsuitable for human consumption) as a byproduct from the site’s operations and treat it on-site. 

 

Chevron’s 29 MW solar array will power an electrolyzer to produce low-carbon hydrogen at the Lost Hills Oil Field in California. Image used courtesy of Chevron

 

Commercial production is expected to begin in early 2026, topping 2.2 tons daily—enough hydrogen to support 132,000 miles of driving. Chevron cautioned that commercial launch would depend on flexible energy legislation and regulations, engineering design, permitting, and material acquisition. 

Hydrogen, a versatile energy carrier, continues to garner global interest as a low-carbon fuel for heavy-duty transportation, industrial equipment, and heat-intensive manufacturing. Hydrogen is also a useful power generation resource and storage technology that can dispatch energy on demand, a critical function to balance volatility from intermittent renewables like solar panels and wind turbines. 

 

Chevron’s First Hydrogen Production Plant 

The hydrogen project will serve as a blueprint for meeting new customer demand along the Central Valley transportation corridor. The Lost Hills Old Field, which has been churning out oil and gas for over a century, began operating a 29 MW solar PV system in 2020. Chevron plans to use the 220-acre solar field to power the electrolyzer, producing low-carbon hydrogen for the existing Lost Hills facility. 

The PV installation was developed by Chevron and SunPower, a California-based solar equipment provider. When it launched in 2020, it was California’s largest net energy metering project and Chevron’s largest solar facility. As of May 2022, the system supplied about 80% of the oil field’s annual energy demand, producing 75 GWh from nearly 90,000 single-axis tracking PV modules. 

A Chevron engineer stated the solar array would be fitted with an electrolyzer and equipment to compress the hydrogen output before transporting it to customers.

 

How the electrolysis process works. Image used courtesy of Chevron

 

Chevron’s Hydrogen Expansion

The project will expand Chevron’s low-carbon fuel portfolio, combining its activities in renewable diesel and sustainable aviation fuels. The company has integrated renewable base oil into its lubricant product lines. 

Chevron recently acquired a majority stake in ACES Delta, a joint venture between equipment manufacturer Mitsubishi Power and storage cavern developer Magnum Development, to build a green hydrogen production and storage center in Utah. The Advanced Clean Energy Storage project will use renewable-powered electrolysis for hydrogen conversion and salt caverns for seasonal energy storage. 

The project’s first phase, now under construction, aims to convert and store 100 metric tons of hydrogen daily. It’s expected to launch commercial operations in mid-2025, pursuing opportunities to sell hydrogen to utilities, industrial facilities, and transportation customers in the western region of the U.S. 

Chevron has earmarked $2 billion in capital expenditures to reduce carbon emissions and expand its clean energy business. Part of its plan targets the growing demand for low-carbon hydrogen. However, several technical and practical gaps stand in the way of scaling hydrogen in the U.S.

For one, the U.S. lacks the infrastructure to connect hydrogen consumers and producers, making new investments risky. While hydrogen fuel cell vehicles are available in the passenger car market, there’s little refueling infrastructure to support rapid expansion nationwide. According to data from the Department of Energy (DOE), the U.S. only has 59 retail hydrogen stations, mostly in California. 

California is accelerating its hydrogen push with plans to build 100 public refueling stations statewide. Last year, the DOE selected the state as a Regional Clean Hydrogen Hub, awarding $1.2 billion for statewide projects powering heavy-duty trucks, public transportation, and ports. 

While Chevron targets 150,000 tons of annual low-carbon hydrogen production by 2030, the company still acknowledges ongoing barriers to large-scale deployment in the transportation sector. Its 2023 Climate Change Resilience Report cites regulatory standards, supply chain challenges, hydrogen costs, and technical gaps like the energy density of hydrogen fuels. Gaseous fuels like hydrogen need large, heavy tanks for onboard vehicle storage. Scaling would require reducing the weight and size of those tanks. 

 

Energy density improvements will support the deployment of hydrogen and other alternative fuels in long-distance shipping and air travel. Image used courtesy of Chevron (Page 28, Exhibit 12)

 

Chevron, which already produces 1 million tons of hydrogen annually for its refining operations, plans to leverage its experience to support new technologies and infrastructure. It’s currently building hydrogen fueling stations at select locations, including California.