During all of the budget talks in Washington, DC, I was interested to read a recent report entitled “CO2 Enhanced Oil Recovery” by the U.S. Chamber of Commerce regarding how enhanced oil recovery (“EOR”) techniques could add significant revenue to the Texas and federal budget, as well as enhance our energy security and benefit the environment!
Enhanced oil recovery is a general term that refers to techniques for increasing the oil that can be extracted from a given oil field. The type of enhanced oil recovery technique discussed in this report is carbon dioxide recovery. It works by pumping carbon dioxide into the reservoir, and the gas improves the flow of the remaining oil. Once the oil-carbon dioxide mixture reaches the surface, the two are separated and the carbon dioxide is recycled back into the reservoir. The U.S. is already leading the world in this technique and it is providing nearly 6% of our onshore oil production.
The new report was written by the Chamber’s Institute for 21st Century Energy. The report notes that the U. S. Department of Energy estimates that enhanced oil recovery could produce 67 billion barrels of oil, which is three times the size of the U.S. current proven oil reserves. If the price is $85/bbl, $1.4 trillion in new government revenue would result directly from these procedures, in addition to billions in private investment.
Karen Harbert, the president of the Institute, also noted that enhanced oil recovery would be better for the environment as well. The technology can take carbon dioxide captured from things like industrial and power plant sources and use it to enhance oil production. Ms. Harbert said, “EOR will increasingly utilize carbon dioxide that would otherwise be emitted into the atmosphere, while generating additional oil production from fields that are in decline.” At the end of the process, the carbon dioxide remains in the oil field, not in the air. It does not affect new lands, since it is used in existing producing oil fields.
Ms. Harbert said EOR could be “one of the next big things in energy production”. Although it should not be seen as a replacement for new production, it could be a valuable tool in helping the U.S. to become energy self-sufficient. Even President Obama seemed to understand this need. In his State of the Union speech earlier this year he highlighted the need to have an “all-out, all-of-the-above, strategy that develops every available source of American energy”. Enhanced oil recovery with carbon dioxide may have a unique place as a win-win technique in which everyone benefits. EOR techniques should play a larger role in the discussions on energy and government revenues. Ms. Harbert was right to point out that “(a)t a time when lawmakers are seeking to avoid falling off fiscal cliffs, increasing energy production and the resulting government revenue, jobs, and economic growth should be at the top of the agenda.”
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