Key facts
- Spiritus has signed preliminary agreements with three U.S. oil and gas producers to sell them captured CO2 for enhanced oil recovery.
- The CEO of Spiritus, Charles Cadieu, told Bloomberg that injecting CO2 could unlock an additional 70 million barrels of oil.
- A University of Houston report found that 137 billion barrels of U.S. oil are technically recoverable using CO2-enhanced oil recovery.
- Texas and the U.S. Gulf Coast contain more than half of the U.S. oil resources favorable for CO2-EOR.
- Injected CO2 reduces oil viscosity, improves sweep efficiency, and restores reservoir pressure, leading to incremental oil production.
Amid challenges in the carbon capture market, including reduced federal incentives and high costs, climate tech startup Spiritus has pivoted to selling captured carbon dioxide to U.S. oil producers for enhanced oil recovery (EOR). The company has signed preliminary agreements with three such producers.
Spiritus CEO Charles Cadieu told Bloomberg that the CO2 injection could help unlock an additional 70 million barrels of oil from wells in Texas, the Rockies, and the Midwest. Cadieu noted that the "removal market is challenged right now" and that "the pull is just great in the EOR space."
The economic feasibility of carbon capture projects has worsened due to insufficient government support and high expenses. The Trump administration previously cut funding for many projects, and major buyers of carbon credits, such as tech companies, have reduced their purchases to focus on AI development. This challenging environment has led some carbon removal businesses to cease operations, while others, like Spiritus, have shifted their focus to the EOR market.
A recent report from the University of Houston indicated that up to 137 billion barrels of U.S. oil are technically recoverable through CO2-enhanced oil recovery. According to the report, Texas and the U.S. Gulf Coast hold over half of the U.S. oil resources suitable for this technology. The report further explained that injected CO2 revitalizes mature oil fields by lowering oil viscosity, improving sweep efficiency, and restoring reservoir pressure, thereby increasing oil production beyond primary and secondary recovery methods. It also stated that CO2-EOR supports permanent carbon storage and can yield low-carbon intensity oil for global markets.