Report Finds CO2 Could Unlock 137 Billion Barrels

Permian Basin oil and gas operators seeking to increase production could find the solution buried beneath their own oilfields. A new report from the University of Houston finds enhanced recovery using carbon dioxide could unlock 137 billion barrels of domestic oil reserves. Texas and the Gulf Coast hold more than half of the resources favorable to carbon dioxide-enhanced recovery.

"It's important for people to recognize CO2 is not a waste but an important part of the energy value chain. Especially in West Texas where it has been used for many years," said Chuck McConnell, executive director of the university's Center for Carbon Management in Energy. He authored the paper along with Zhiyuan Li, a petroleum engineering doctoral candidate at the university.

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The limitation is the supply of CO2, he told the Reporter-Telegram. "There's only so much available from natural sources," he said.

Projects coming to West Texas that produce CO2 present an opportunity, he said. Data centers and hyperscalers need electric power and plan to use power generated by gas-fired turbines. The CO2 from those turbines could be captured and used in enhanced oil recovery projects, he said.

"When these guys show up, they talk about construction, they talk about jobs," he said. "They all have the opportunity to contribute strongly to future oil production in the Permian Basin."

These centers are vocal in wanting to utilize decarbonized electricity. Saying wind and solar power are not feasible for their needs, he said the centers are turning to natural gas-fired turbines.

"Hyperscalers can, with full confidence, use low carbon-intensive electricity," he said.

The paper examined the potential for carbon dioxide-enhanced oil recovery, or CO2-EOR, to tap vast amounts of oil left behind in existing U.S. fields while permanently storing carbon dioxide underground, potentially increasing U.S. energy supply while reducing carbon emissions.

Of the estimated 624 billion barrels originally contained in conventional U.S. oil reservoirs, about 434 billion remain underground, including roughly 20 billion barrels of proven reserves. The report estimates 137 billion barrels could be technically recoverable through CO2-EOR, with Texas positioned to play a major role.

Texas and the Gulf Coast, including offshore resources, contain more than half of the nation's oil resources considered technically favorable for CO2-EOR, potentially positioning the region to lead redevelopment efforts.

There is nowhere in the U.S. more receptive than West Texas, he said. The area has the infrastructure, natural gas supplies, favorable geology and a lot of oil in the ground, McConnell said.

"The economic feasibility of a CO2-EOR project depends on the combined performance of all associated elements," the report said, pointing to costs associated with carbon capture, transportation, field redevelopment, operations, monitoring and tax incentives.

Existing oil fields also present both advantages and challenges. Older wells may require inspection, repair or re-plugging to prevent injected CO2 from escaping, while operators must continue monitoring reservoirs throughout and after a project's operating life. Existing infrastructure can be leveraged for enhanced project economics and implementation effectiveness.