Man driving utility vehicle toward industrial structures and smokestack (© Luke Sharrett/Bloomberg/Getty Images)
The Petra Nova Carbon Capture Project in Thompsons, Texas, captures much of the refinery's carbon dioxide emissions to help its oil production. (© Luke Sharrett/Bloomberg/Getty Images)

Technology is helping U.S. oil companies extract more oil in an unconventional way: grabbing carbon dioxide that would normally go into the atmosphere and using it to increase oil production.

The technology is called “carbon capture,” and typically it isolates the carbon dioxide at the point of generation — an oil or gas refinery smokestack — and stores it deep underground. This approach takes the carbon dioxide and then injects it into underground oil fields, a process called “enhanced oil recovery.” Instead of polluting the environment, it’s helping to retrieve more oil.

The U.S. is expected to become the top oil producer in the world by 2023. Companies extracting oil and gas from shale rock formations using horizontal drilling and hydraulic fracturing — called fracking — are driving the production increase.

Large gray pipe with smokestack and blue sky behind (© Luke Sharrett/Bloomberg/Getty Images)
Petra Nova pipes carbon dioxide to an oil field. (© Luke Sharrett/Bloomberg/Getty Images)

A change in federal tax law is expected to encourage investment in carbon capture. Specifically, fossil fuel producers using carbon-capture technology will get tax credits that could amount to hundreds of millions of dollars over the coming years under legislation that President Trump signed earlier this year.

A recent International Energy Agency (IEA) report finds that the new tax credits could significantly raise U.S. carbon-capture capacity while increasing the country’s oil production by 50,000 to 70,000 barrels per day.

Companies coming on board

Texas oil company Petra Nova, in partnership with Japan-based JX Nippon, installed post-combustion carbon-capture technology that Petra Nova says will reduce its carbon dioxide emissions by 90 percent. The partner firms built a pipeline to route captured carbon dioxide to an oil field to increase production there. Petra Nova’s stated goal is to combine commercial with environmental benefits.

The Petra Nova project “demonstrates that clean-coal technologies can have a meaningful and positive impact on the nation’s energy security and economic growth,” said Energy Secretary Rick Perry.

Metal pipes and valves, with blue sky behind (© Ernest Scheyder/Reuters)
Occidental Petroleum’s enhanced oil recovery project is the largest in the U.S. Southwest’s Permian Basin. (© Ernest Scheyder/Reuters)

Net Power and Occidental Petroleum are two more Texas companies aggressively developing carbon-capture technologies.

The approach is controversial among some environmental groups; they argue that it subsidizes the fossil fuel industry. But others — including IEA analysts — note that carbon capture can reduce carbon dioxide emissions by 37 percent. They see the tax credits as economic incentives that will bring carbon-capture technology costs down, making it a mainstream component of clean energy production.

Besides new storage options, scientists are developing new ways to store carbon and to turn it into other things, such as durable construction materials.