5 Things to Know About CO2-EOR

1. CO2-EOR substantially increases domestic energy reserves.

CO2-EOR accounts more than 300,000 barrels of oil production per day, or around 5 percent of annual U.S. oil production, and the industry could grow considerably in the near-term. According to the National Energy Technology Laboratory, between 21 and 63 billion barrels of oil could be “economically-recovered” using CO2-EOR, doubling or tripling the size of current U.S. proven oil reserves. Next generation CO2-EOR technology could provide access to even more oil reserves.

2. CO2-EOR has environmental benefits.

CO2-EOR projects have little additional impact on land and ecosystems because they occur on already-developed oil fields with existing well pads, roads, and other infrastructure. In addition, CO2-EOR extracts conventional oil resources, displacing imported crudes that increasingly come from more carbon-intensive resources. Moreover, when man-made CO2 is captured and used in EOR, atmospheric emissions of 0.3 to 0.7 tons of CO2 per barrel of oil produced by CO2-EOR are avoided, resulting in a net CO2 reduction benefit compared to conventional oil production. Except for de minimus losses, all of the utilized CO2 in EOR remains safely stored underground.

Finally, CO2-EOR offers the opportunity to advance the development of CO2 capture technology and the expansion of the CO2 pipeline network across the United States. For those CO2 capture technologies that have not reached full commercialization, especially in electric power generation, selling captured CO2 for use in EOR can provide a revenue stream that helps reduce the financial risks and uncertainty of investing in emerging technology.

3. CO2-EOR can deliver long-term economic value.

CO2-EOR projects offer longevity and certainty not always associated with other oil production opportunities. By revitalizing oil production from existing fields and producing incremental oil from proven formations that have been studied thoroughly, CO2-EOR can increase a formation’s yield by 5 to 15 percent of the original oil in place. While CO2-EOR operators must inject CO2 for approximately one year before a formation will yield additional oil, the resulting production may continue for up to 30 years, usually peaking for 10 years (between years 5-15). The first two large-scale CO2-EOR projects in the United States (SACROC and Crossett in West Texas) began in the 1970s and are still in operation today, producing more than 100 million barrels of oil per year. CO2-EOR therefore can provide relatively stable energy production, employment, and benefits to local economies.

In addition, CO2-EOR offers rates of return that compare favorably with other oil production projects, provided that CO2 can be delivered at an affordable price. Advanced Resources International estimates that CO2-EOR yields a 20% rate of return assuming that a barrel of oil sells for $85, CO2 can be delivered for $40 per ton, and 0.3 tons of CO2 are used to produce one barrel of oil. NEORI’s recommended tax credit would go to parties that capture CO2 and enable them to sell CO2 at a price that EOR operators are willing to pay.

4. The potential to pursue – and benefit from – CO2-EOR is widespread across the United States.

Many states have oil fields that are candidates for CO2-EOR. As of 2010, 10 states had existing CO2-EOR operations, while overall, at least 23 U.S. states have CO2-EOR potential. Most existing CO2-EOR projects are located in the Permian Basin of West Texas, where there is an extensive CO2 pipeline network and numerous existing CO2-EOR projects. Over the last decade, new CO2-EOR projects have been initiated in the Gulf Coast, Rocky Mountains, Oklahoma, and even Michigan. Expanded or additional CO2-EOR projects could be initiated in each of these locations and other states. Oil produced domestically via CO2-EOR can displace imports of foreign oil, create local job opportunities, and raise new revenues for federal and state governments.


5. Even states without CO2-EOR could benefit from local companies that capture and sell captured CO2 from man-made sources or build CO2 pipelines.

Even states without oil reservoirs suitable for CO2-EOR could play a role in the industry. By extending CO2 pipeline networks, industrial facilities and power plants in virtually any state could eventually supply CO2 for EOR. Constructing CO2 pipelines and installing CO2 capture equipment can create new jobs in many communities. Around 4,000 miles of CO2 pipelines are already in operation across the United States.

An expanded and reformed 45Q program would enable CO2 capture from a wide range of man-made sources, including gas processing, ethanol, fertilizer and chemical production, industrial gasification, the manufacture of cement and steel, and coal and natural gas-fired power generation. The broad range of industrial sources of CO2 means that even non-oil and gas producing states will be able to participate economically in CO2-EOR value chain as suppliers of man-made CO2 to the oil industry.


CO2-EOR’s potential is based on several factors – advances in CO2-EOR technology; a growing number of oil fields known to be amenable to CO2-EOR; an era of relatively higher oil prices; and access to affordable, but mostly naturally-occurring, supplies of CO2. Expanding CO2-EOR will require capturing a much greater quantity of CO2 from man-made sources and delivering it to EOR operators at a price they are willing to pay. An expanded and reformed 45Q tax credit program, which NEORI is working to advance, would help in supplying more CO2 for EOR and target the “cost gap,” or the difference between EOR operators’ willingness to pay for CO2 and the cost to capture and transport it.