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Laura Miller and Brad Crabtree, Minneapolis, column: A common-sense energy, environment solution

By Laura Miller and Brad Crabtree MINNEAPOLIS -- Amidst an increasingly contentious and partisan energy debate, an unlikely coalition of utility and energy executives, state officials and labor and environmental advocates has come together in com...

By Laura Miller and Brad Crabtree

MINNEAPOLIS -- Amidst an increasingly contentious and partisan energy debate, an unlikely coalition of utility and energy executives, state officials and labor and environmental advocates has come together in common purpose: to expand American oil production through a proven technique called carbon dioxide enhanced oil recovery, or CO2-EOR.

On Feb. 28, members of the National Enhanced Oil Recovery Initiative were joined by North Dakota's congressional delegation and other members of Congress in supporting CO2-EOR as a critical, commonsense solution to our nation's energy security, fiscal problems and environmental challenges.

A compelling example of American ingenuity, EOR works by injecting CO2 into existing oil fields, where it acts like a solvent to free up hard-to-reach crude. CO2 that returns to the surface with the oil is recycled and re-injected, ultimately remaining securely stored, deep underground.

EOR began in earnest in West Texas during the 1970s. Today, the EOR industry productively uses about 65 million tons of CO2 a year, which it obtains mostly from underground formations but also from industrial sources such as natural gas processing, ethanol, fertilizer and chemical production and coal gasification.

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This CO2 is delivered to oil fields via 3,900 miles of pipelines to produce 281,000 barrels per day, or nearly 6 percent of U.S. oil production.

North Dakota has played a pioneering role in EOR. Basin Electric's Dakota Gasification at Beulah, N.D., gasifies lignite coal to produce natural gas and fertilizer and has captured CO2 since 2000. At nearly 3 million tons a year, Dakota Gasification operates the largest CO2 capture operation with coal in the world, from which the CO2 is piped more than 200 miles to Saskatchewan for EOR.

Looking to the future, North Dakota's Industrial Commission approved funding last month to study the feasibility of using CO2 to expand oil production in the state's Bakken formation.

Through public and private initiatives like these, CO2-EOR can extend North Dakota's oil production in an environmentally responsible manner for generations by simultaneously storing CO2 emissions from power plants and other industrial facilities.

Nationally, CO2-EOR could be a game-changer for America's energy security. A recent assessment published by the U.S. Department of Energy's National Energy Technology Laboratory estimates that an additional 26 billion to 61 billion barrels of oil could be economically recovered through CO2-EOR with today's technologies. That's potentially more than twice our nation's current proved reserves.

Moreover, next-generation EOR technologies could yield 67 billion to 137 billion barrels of oil and store 20 billion to 45 billion metric tons of CO2 that otherwise would be released into the atmosphere.

With all this recoverable crude, oil prices at over $100 per barrel and world-class expertise in states like Texas and North Dakota, what's the barrier to expanding CO2-EOR? The answer is that geologic and industrial supplies of CO2 are limited.

That's why initiative members recommend federal and state incentives to reduce the cost of CO2 capture and to build out new CO2 pipelines. These incentives would target a range of industry sectors, including from ethanol, fertilizer and chemical production sa well as coal and gas-fired power generation, to help expand the EOR industry's CO2 supply.

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Crucially, with the federal government and most states struggling to rein in deficits, these incentives will more than pay for themselves through revenues from new oil production. For example, the initiative's proposed federal production tax credit would generate estimated net positive federal revenue of $105 billion over 40 years while producing 9 billion barrels of additional oil and storing 4 billion tons of CO2.

In short, CO2-EOR can create a virtuous circle of increasing benefits to the American people: expanded domestic oil production, good-paying jobs, new federal and state revenues, declining expenditures on imported oil and reduced CO2 emissions.

We commend North Dakota's congressional delegation and state officials for their bipartisan support. This is a timely, constructive solution for the economy and environment when consensus on most other big issues of energy policy is increasingly hard to find.

Miller, a former mayor of Dallas, is director of projects at Summit Power in Seattle. Crabtree is policy director at the Great Plains Institute of Minneapolis, which co-founded and helps staff the National Enhanced Oil Recovery Initiative.

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