Spiritus, a carbon management engineering company, has recently signed preliminary agreements with three oil and gas producers in the United States to sell extracted carbon dioxide for use in enhanced oil recovery (EOR) methods. These agreements were made in response to the reduction of federal incentives in the United States for carbon capture projects and the uncertain regulatory environment in the future.
Potential Oil Recovery Using CO2
According to Charles Cadio, CEO of Spiritus, injecting carbon dioxide into oil fields could lead to the recovery of an additional 70 million barrels of oil from wells located in Texas, the Rockies, and the Midwest of the United States. Cadio stated in an interview, "The carbon removal market is currently facing challenges, but the demand for carbon dioxide in the EOR industry is very high, and we are moving towards addressing commercial needs."
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Challenges in Carbon Capture Technologies
After an initial boom in carbon capture technologies, including direct air capture which is still maturing, the economic and commercial conditions of projects have worsened due to insufficient government support and high costs. In the United States, the previous government removed many projects from the funding support list, and the largest buyers of carbon credits, such as tech giants, have reduced their purchases to focus on AI development investments.
A report from the University of Houston indicates that up to 137 billion barrels of oil in the United States are technically recoverable using EOR methods. Texas and the Gulf Coast of the United States account for more than half of the country’s oil resources, which are technically favorable for utilizing this technology. The report notes that "injecting CO2 helps rejuvenate mature oil fields and leads to incremental oil production beyond primary and secondary recovery."
Additionally, the EOR method aligns with permanent carbon storage, thus producing uniquely low-carbon intensity oil for global markets.
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