Officials in Midwest explore potential to expand use of enhanced oil recovery, CO2 storage

Enhanced oil recovery is a decades-old, proven commercial activity already widely practiced in the Permian Basin of Texas, the U.S. Gulf Coast and elsewhere. But could EOR be more widely employed in the Midwest, and ultimately become a central part of this region’s energy policy?

Stateline Midwest, Volume 19, No. 11- December 2010

Enhanced oil recovery is a decades-old, proven commercial activity already widely practiced in the Permian Basin of Texas, the U.S. Gulf Coast and elsewhere. But could EOR be more widely employed in the Midwest, and ultimately become a central part of this region’s energy policy?

A group of policy leaders from the Midwest (appointed by governors via the Midwestern Governors Association and its Midwestern Energy Infrastructure Accord) has been exploring this question.

The promise of EOR is clear: While producing more domestic oil, EOR can help address the environmental problems associated with CO2 emissions. That is because an EOR operation can prevent the CO2 produced from coal, biofuels, natural gas processing plants and other industry sources from being released into the atmosphere. Captured and transported by pipeline to an EOR operation, the CO2 is injected into the ground to re-pressurize older, depleted oil fields. Currently in the United States, more than 50 million tons of CO2 are used to force over 250,000 barrels of oil per day to the surface.

While the Midwest is not traditionally considered a major oil-producing region, estimates show that the region has up to 7.5 billion barrels of oil that could technically be recovered through CO2-EOR operations. (To put that figure in perspective, the U.S. produced 5.31 million barrels per day in 2009.)

In Michigan and North Dakota, there already are commercial EOR plants in operation that use captured CO2 (from natural gas processing in Michigan and lignite coal gasification in North Dakota). 

One promising aspect of EOR-CO2 is that the oil industry has an incentive to pay for the carbon dioxide needed for EOR operations. This revenue stream could help finance the build-out of a CO2 pipeline infrastructure and accelerate the development of a carbon-capture-and-storage industry to serve the region’s utilities and biofuels industries.

What can Midwestern legislators do to advance the use of CO2-EOR? For one, they can support the development of a legal and regulatory framework that facilitates carbon-capture-and-storage projects and promotes the development of EOR operations. In 2009, North Dakota passed a bill (SB 2095) giving the state’s Industrial Commission primary oversight of CO2 geologic storage projects. And three years ago, with passage of HB 2419, Kansas legislators directed state regulators to develop rules for CO2 geologic storage.