DOE Announces $17.2 Million to Use Carbon Dioxide for Enhanced Oil Recovery in Unconventional Reservoirs, Combined with Carbon Storage DEADLINE December 13, 2023

September 20, 2023

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(U.S. Department of Energy) The U.S. Department of Energy’s (DOE) Office of Fossil Energy and Carbon Management (FECM) today announced up to $17.2 million to evaluate the potential for unconventional oil production through a combined process that uses captured carbon dioxide (CO₂) emissions to recover residual oil—called CO₂ enhanced oil recovery (CO₂-EOR)—while safely and permanently storing that CO₂ underground in the oilfield. The research targeted through this funding will help to accelerate carbon storage operations in depleted domestic oilfields, repurposing existing infrastructure in support of the Biden-Harris Administration’s historic decarbonization goals.

“Integrating geologic storage of carbon emissions into our key energy production processes is an important component of broader decarbonization and achieving President Biden’s goal of net-zero emissions by 2050,” said Brad Crabtree, Assistant Secretary of Fossil Energy and Carbon Management. “Combining carbon dioxide enhanced oil recovery operations with permanent storage of captured carbon dioxide emissions in the same geologic formations provides an important pathway to accelerate carbon storage and help reduce the overall carbon footprint of that oil we will continue to produce while we transition to a net-zero energy and industrial economy.”

CO₂-EOR is a technique used to recover oil, typically from mature fields that are no longer productive using traditional oil recovery methods, which can leave up to two-thirds of the original oil in place. In conventional oilfields, the CO₂-EOR process is not only effective in increasing ultimate oil recovery, but also in its ability to geologically store CO₂ emissions through the recovery process. Following the CO₂-EOR operations, the captured CO₂ remains permanently underground in the geologic formation, thereby prevented from entering the atmosphere. This funding opportunity focuses on examining the effectiveness of this process when applied to low-permeability, light-oil fields that have dominated new production in recent years.

Through scientific research carried out using a field laboratory, projects awarded this funding will inject CO₂ under various scenarios, measure the volumes of incremental oil produced and CO₂permanently stored, and evaluate the conditions under which oil wells in depleted unconventional reservoirs can be transitioned to carbon storage wells in a manner that economically yields a reduction in carbon emissions.

Applicants for DOE funding must address the societal considerations and impacts of their proposed projects, emphasizing active engagement with communities. Applications must explain how projects are expected to deliver economic and environmental benefits and mitigate impacts; conduct community and stakeholder engagement; incorporate diversity, equity, inclusion and accessibility; and promote workforce development and quality jobs. Projects selected under this opportunity will be required to develop and implement strategies to ensure strong community and worker benefits, and report on such activities and outcomes.

Read more details about this FOA here. All questions must be submitted through FedConnect; register here for an account. Visit our website to find resources on how to include equity and conduct community engagement in project plans.

FECM minimizes environmental and climate impacts of fossil fuels and industrial processes while working to achieve net-zero emissions across our economy. Priority areas of technology work include carbon capture, carbon conversion, carbon dioxide removal, carbon dioxide transport and storage, hydrogen production with carbon management, methane emissions reduction, and critical minerals production. To learn more, visit the FECM website, sign up for FECM news announcements and visit the National Energy Technology Laboratory website. READ MORE

Funding Notice: Enabling a Reduced Carbon Footprint for Carbon Dioxide Enhanced Oil Recovery (CO2-EOR)/Storage Field Test Sites in Unconventional Reservoirs (U.S. Department of Energy)

Biden’s Risky Bet that Oil Companies Can Lead a New Climate Industry -- In aligning with fossil fuel companies, the administration is deepening skepticism of carbon removal. (Heatmap)

Companies capture a lot of CO2. Most of it is going into new oil. The government is still funding the controversial practice of “enhanced oil recovery" (Washington Post)

Excerpt from U.S. Department of Energy:

Key Dates

FOA Issue Date:	09/13/2023
Submission Deadline for Full Applications:	12/13/2023 at 11:59:59 PM ET
Expected Date for Selection Notifications:	May 2024

Additional Information

Download the full funding opportunity on FedConnect READ MORE

Excerpt from Heatmap: For as long as people have been talking about building machines that suck carbon dioxide from the atmosphere, the concept has sparked fierce debate. Would such a tool be used the way that scientists envision — alongside aggressive emission cuts? Or would it be co-opted to prolong dependence on fossil fuels?

Suddenly these questions have become less theoretical. Last month, Carbon Engineering, one of the first companies to actually build a “direct air capture” machine, was acquired by Occidental Petroleum, a fossil fuel company that plans to use the technology to market “net-zero oil.” The Biden administration has also selected Occidental as a potential recipient of one of two major grants, worth up to $600 million each, to build a “DAC hub” in South Texas near Corpus Christi. As part of the same announcement, the Department of Energy gave funding to oil and gas companies in California, Alaska, and Alabama for the early planning stages of additional hubs.

“Cutting back on our carbon emissions alone won’t reverse the growing impacts of climate change," Energy Secretary Jennifer Granholm said in a press release for the DAC hub awards. "We also need to remove the CO2 that we’ve already put in the atmosphere,”

She’s right. The UN’s Intergovernmental Panel on Climate Change says pursuing carbon removal is “unavoidable” if the world hopes to limit warming to safer temperatures — but it will only work if we stop burning so much oil and gas. In handing the reins of this new industry to fossil fuel companies, the administration has confused the message, stoking the mistrust of those already skeptical of the technology, and giving carbon removal projects with no fossil fuel connections a steeper hill to climb to earn support.

It hasn’t helped that Occidental’s CEO, Vicki Hollub, has described DAC as a “license to continue to operate.” Shortly after the Biden administration’s announcement, she told NPR that thanks to this technology, “there’s no reason not to produce oil and gas forever.” READ MORE

Excerpt from Washington Post: For over a decade, the U.S. government has been quietly funding the capture of CO2 that is ultimately used to drill more oil. Some experts and researchers argue that the climate impact is net positive: The oil will be drilled anyway, and the process can help companies learn how to capture CO2 more efficiently. But others say that the government shouldn’t be helping companies sustain more fossil fuel extraction.

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Climate and energy experts have said for years that the world will need some amount of carbon capture to zero out carbon emissions. The International Energy Agency estimates that the world will need to be able to capture 1.2 billion tons of CO2 per year by 2050; today, the world’s total carbon capture amounts to just 4 percent of that goal.

But for a long time, there wasn’t a way for companies to make much money off burying carbon dioxide underground. The United States did offer a tax credit for CO2 stored permanently, but it was only around $20 per metric ton. Experts say it didn’t give companies enough of an incentive to take on the costs of burying CO2 deep underground in places like saline aquifers — areas of porous rock filled with salty water.

So, many oil and gas companies used the CO2 that they captured for a process that already existed: enhanced oil recovery.

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Congress updated a tax credit known as 45Q, which pays companies to capture CO2. The tax credit now offers companies up to $60 per ton of CO2 captured and used for enhanced oil recovery. (Companies get more, up to $85 per ton, if they inject the CO2 underground in something like a saline aquifer.)

“Congress should not have created — and later increased the value of — a new oil and gas industry subsidy under the guise of climate emissions mitigation,” said Josh Axelrod, senior advocate for the nature program at the Natural Resources Defense Council.

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The government offers more cash for companies that pull CO2 directly from the air — rather than a power plant or natural gas processing — and put it into enhanced oil recovery. Companies pulling CO2 from the air get up to $130 if that CO2 goes into more oil, or up to $180 if it goes into permanent storage.

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There is evidence that this practice might be on the way out — in part because firms can now make more money by burying it.

The Clean Air Task Force has been tracking new announcements of carbon-capture projects, and Longstreth points out that many of those upcoming projects aren’t planning to use the CO2 for enhanced oil recovery. Because companies now get $25 more per ton to bury the CO2 permanently, Longstreth says, there isn’t as much incentive to use it to drill oil. Remaining companies that use enhanced oil recovery, he says, may be in locations where there isn’t a better storage option. READ MORE