Where supercritical CO2 is injected into aquifers, the subsequent dissolution of CO2 into the brine may result in substantial reaction and chemical transformation of the minerals comprising the reservoir and caprock and disturb the stress field, and alter the permeability These combined effects may result in weakening of pre-existing faults, transformation of permeability and the triggering of induced-seismicity, via weakening. Pristine and CO2-alterd rocks from the Crystal Geyser (Major et al. 2014) define the evolution of Fe-coating (hematite) into altered tribological films (goethite) surrounding the grains with different strength and stability properties. We use this transformed microstructural form to examine the ensemble strength and structural stability. We use a 2-D Distinct Element Model (DEM) to simulate fault gouge materials under slip events. The mechanical response of grain-grain contacts is represented by a linear-elastic contact model with rotational resistance and a slip-weakening friction law. Goethite and hematite coating configurations are represented using tiny particles surrounding quartz analog particles with different contact properties. Numerical shear experiments are performed on simulated fault gouge with unaltered (hematite coating) and altered (goethite coating) configurations. CO2 altered gouge shows lower friction coefficient (~0.4) than unaltered gouge (~0.65). However, the weakening effect of the goethite coating is not enhanced by increasing relative coating concentration. Results of end-member (unaltered and altered gouge materials) behaviors show that the goethite film may serve as the main mechanism of weakening and creep behavior in these CO2 altered faults.