U.S. POLICY 

ANALYSIS FOR CARBON DIOXIDE ENHANCED OIL RECOVERY:

A CRITICAL DOMESTIC ENERGY, ECONOMIC, AND ENVIRONMENTAL OPPORTUNITY— 

DETAILED METHODOLOGY AND ASSUMPTIONS

May 25, 2012 

The Center for Climate and Energy Solutions (C2ES) and the Great Plains Institute (GPI) 

conducted an analysis, with extensive input from the participants of National 

Enhanced Oil Recovery Initiative (NEORI), to inform NEORI’s recommendations for a 

federal production tax credit to support enhanced oil recovery with carbon dioxide 

(CO2-EOR). In particular, C2ES and GPI explored the implications of the 

recommendations for CO2 supply, oil production and federal revenue. This document 

describes the research, assumptions, and methodology used in the analysis. NEORI’s 

recommendations report, Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic 

Energy, Economic, and Environmental Opportunity, can be found at:

http://neori.org/publications/neori-report/.

C2ES and GPI compared the likely cost of a federal tax 

credit for greater CO2 capture and supply with the federal 

revenues expected from applying existing tax rates to the 

resulting incremental oil production. C2ES and GPI 

quantified two key relationships for CO2-EOR development and a related tax credit program: 

1) Cost gap – the difference between CO2suppliers’ 

cost to capture and transport CO2and EOR operators’ 

willingness to pay for CO2. The goal of the tax credit is to 

bridge the cost gap. Thus, the cost gap determines the

expected level of the tax credit in a proposed competitivebidding process. 

2) Revenue neutrality/revenue-positive outcome the 

federal government will bear the cost of a CO2-EOR tax 

credit program, yet it will enjoy increased revenues from 

the expansion of CO2-EOR oil production when existing 

tax rates are applied to the additional production. C2ES 

and GPI analyzed when the net present value of expected 

revenues would equal or exceed the net present value of 

program costs.
2 National Enhanced Oil Recovery Initiative (NEORI) 

FIGURE 1: Illustration of the Cost Gap and Revenue Neutral/Revenue Positive Outcome of 

Federal Production Tax Credit Program

*The “cost gap” is the difference between the cost to capture and transport CO2 and what EOR operators are willing to pay for CO2

**Net present value is the sum of annual tax revenue minus annual production tax credit costs for each year of the production tax credit 

program, discounted for each year 

C2ES and GPI calculated the tax credit required to 

bridge the cost gap, and the cost and revenue implications. C2ES and GPI developed input assumptions 

based on real-world physical and market conditions 

after consulting with NEORI participants and other 

industry experts and reviewing available literature. 

C2ES and GPI developed a core scenario based on 

“best guess” inputs and conducted several sensitivity 

analyses of key inputs. C2ES and GPI demonstrated 

that a program can be designed that will become 

“revenue positive” (defined as when the federal 

revenues from additional new oil production exceed 

the cost of a carbon capture tax credit program after

applying a discount rate to both costs and revenues)

within ten years after tax credits are awarded. 

Sensitivity analysis reveals that the program remains

revenue positive using a realistic range of likely 

assumptions. 

CO2 TRANSPORTATION AND CAPTURE COSTS 

Key Variables: CO2 Capture Cost, CO2 Transportation Cost, 

Total Price of CO2 

CO2 capture and transportation costs determine the 

total price of CO2. 

• (Total Price of CO2) = (CO2 Capture Cost) 

plus (CO2 Transportation Cost) 

The ultimate size of a federal incentives program will 

be heavily influenced by the total price of CO2

(capture costs plus transportation costs). Capture and 

transportation costs vary among CO2 suppliers, who 

will bid for tax credits based on how much it costs to 

bring their CO2 to market. Recognizing these cost 

differences among CO2 suppliers, NEORI’s 

recommended federal tax credit program establishes 

separate tranches to incentivize different CO2 supply 

sources. After consulting publicly available literature

1. Production 

tax credit (PTC) 

closes the"cost 

gap"*

2. Incentivized 

CO2

supply 

leads to 

incremental 

EOR production

3. Tax revenue is 

generated from 

incremental EOR 

production, while 

tax credits are 

awarded

4. Over time, tax 

revenue exceeds 

the cost of 

production tax 

credits

5. Revenue 

neutral/revenue 

positive outcome 

achieved when 

net present 

value** becomes 

positive
Analysis for Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity 3

FIGURE 2: Assumptions Regarding Carbon Capture and Transportation Costs for Different 

Technology Tranches

and consulting NEORI participants with industry 

expertise, C2ES and GPI made a best estimate of CO2

capture and transportation costs for each CO2 source 

for its core scenario. NEORI’s core scenario used the 

capture and transportation costs for each CO2 supply 

source in the table listed below. Sensitivity analysis 

increased and decreased capture and transportation 

costs to reflect how changes in these key variables 

affect the year in which a revenue neutral/revenue 

positive outcome is achieved. 

CO2 Transportation Costs 

CO2 transportation costs vary for different projects and 

across geographic regions. A literature review and 

consultation with NEORI participants suggested that 

the likely range of CO2 transportation costs is $5 to $20 

per tonne of CO2, but likely closer to $10. The core 

scenario assumed that transportation costs were $10 

per tonne of CO2, and sensitivity analysis used $5 and 

$20 per tonne of CO2 as low and high estimates of CO2

transportation costs. 

CO2 Capture Costs 

CO2 capture costs vary by CO2 source. This is because 

CO2 capture technologies are in different stages of 

development and deployment. A literature review of 

publicly available sources and NEORI participant 

insight informed the selection of point estimates for 

CO2 capture costs. Appendix Table 1 lists the publicly 

available studies that informed NEORI’s analytic work. 

The following list shows additional assumptions 

regarding CO2 cost. 
4 National Enhanced Oil Recovery Initiative (NEORI) 

Power Plant CO2 Capture Costs - The CO2 cost for a 

power plant with carbon capture can be calculated 

either as a cost of avoided CO2 emissions or a cost of 

captured CO2. Both calculations use incurred cost (the 

calculation numerator) as the difference in levelized 

cost of electricity ($/ megawatt-hour (MWhr)) 

between the plant with carbon capture and a reference 

plant (usually the same technology and configuration)

without carbon capture. However, the two calculations 

differ in the quantity of CO2 (the calculation divisor) 

associated with the cost. Avoided CO2 (tonnes/MWhr) 

is the reduction in CO2 emissions per net MWhr with 

CO2 capture compared to the same reference plant 

without CO2 capture. The amount of CO2 captured per 

net MWhr will always be greater than the amount of 

CO2 avoided per net MWhr because of the reductions 

in both net MWhr and efficiency when capturing CO2. 

This also means that the capture cost per tonne of CO2

will always be lower than the avoided cost per tonne of 

CO2. As an example, for first-generation coal plants 

with carbon capture, captured CO2 may be 30%-45% 

greater than avoided CO2. Since revenue and 

incentives will be based on the quantity of CO2 that is 

delivered to EOR, the costs provided by NEORI are for 

captured CO2. 

Learning - CO2 capture costs are unlikely to remain 

static over time. After pioneer, first-of-a-kind projects, 

CO2 capture costs are likely to fall as capture 

technology matures, and CO2 suppliers learn from 

building multiple facilities of a given type. A literature 

review (see Appendix Table 2) and insight from 

industry experts helped to determine an appropriate 

estimate of cost decreases over time and with each 

generation of CO2 technology development. 

Low-Cost CO2 Source Aggregation - Many of the 

lower-cost man-made sources are not much more 

expensive than the willingness-to-pay price for CO2 at 

current oil prices. However, because the lower-cost

sources also tend to be small in volume, it is 

impractical to construct dedicated pipelines to serve 

only lower-cost sources except in some niche 

applications. It is assumed that if an incentive were 

available at a sufficient level to bring on larger-volume, 

higher-cost sources, it would become possible to 

aggregate the lower-cost, smaller-volume industrial 

sources to bring them to market. NEORI’s analytic 

work assumed that lower-cost CO2 sources would 

receive a minimum tax credit amount depending on 

the observed willingness to pay. 

CO2 SUPPLY OVER TIME 

Key Variables: CO2 Supply by Source 

Projecting likely CO2 supply over time is important for 

projecting the size of an overall federal tax credit program. The availability of CO2 is constrained by capture 

technology, pipeline capacity, time, and overall CO2

potential. C2ES and GPI, with extensive input from 

NEORI participants, developed a realistic supply 

expansion scenario (See Appendix Tables 3a-3d). In 

terms of capture technology; power plants, low-cost 

industrial sources, and high-cost industrial sources

each have different time horizons for development 

and deployment. For example, capture technology for 

low-cost industrial sources is closer to or already

deployed at a commercial scale than capture technologies for power plant and high-cost industrial sources. 

In terms of pipeline capacity, the federal 

production tax credit will help cover the cost of 

constructing new CO2 pipeline networks across the 

country. Over time, these pipeline networks can 

accommodate additional CO2 capture projects, 

reducing future transportation costs and the level of 

production tax credits needed for CO2 capture. 

In terms of time, CO2 supply growth is constrained 

on an annual basis, at least in the early years of the 

incentive program. Power plants and industrial 

facilities take time and resources - material and 

financial - to complete, and, given current market 

conditions, it is unlikely for more than a few power

plants or industrial facilities to go into operation in a 

given year during the early years of the program. 

Over the longer term, capture technologies for both

new-build facilities and retrofits are likely to become 

available more broadly and at lower costs. CO2 supplies 

are projected to scale up rapidly after an initial 

deployment phase and approach the total available 

supply for a given CO2 supply source. 

CO2 DEMAND/EOR OPERATORS’ WILLINGNESS 

TO PAY FOR CO2

Key Variables: Oil Price, EOR Operators’ Willingness to Pay, 

Cost Gap, Annual Federal Production Tax Credit Costs 

In general, EOR operators obtain CO2 through long-
Analysis for Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity 5

term contracts to ensure a reliable supply and a 

predictable price. Contracted prices for CO2 are 

generally set by tying the price of CO2 to the price of 

oil by a certain percentage (CO2 prices are stated in 

mcf of CO2; multiplying a given mcf quantity of CO2 by 

a factor of 18.9 expresses the CO2 quantity in tonnes). 

• (EOR Operators’ Willingness to Pay for 

CO2) = 

(Price per Barrel of Oil) multiplied by 

(Contracted Percentage of Oil Price for 

mcf of CO2) multiplied by 

(18.9 mcf/tonne of CO2) 

Oil Price - The U.S. Energy Information’s 

Administration’s Annual Energy Outlook’s 2011 

“Reference Case” provided annual forecasts for the 

price of oil per barrel. Forecasts are not made past 

2035, so post-2035 oil prices are assumed to be the 

price of oil in 2035 (See Appendix Table 4). Sensitivity 

analysis increased and decreased the annual oil prices 

by 20% to account for moderate shifts in forecasted oil 

prices. 

EOR Operators’ Willingness to Pay - EOR operators 

base their willingness to pay for CO2 on the price of oil 

and usually enter long-term agreements to buy CO2 at 

a certain percentage of the oil price. NEORI’s research 

and consultation with oil industry experts revealed that 

contracted percentages usually range from 1.5 percent 

to 2.5 percent of the price of oil (per mcf of CO2), 

taking into account project-specific transportation 

costs and the availability of other CO2 supply sources. 

The core scenario assumed a willingness to pay 

percentage of 2 percent, which is considered the 

industry’s rule-of-thumb percentage. Sensitivity analysis 

assumed willingness to pay percentages from 1.5 

percent to 2.5 percent of the price of a barrel of oil. 

Cost Gap - The cost gap is the difference between 

EOR operators’ willingness to pay for CO2 and the 

total delivered price of CO2 (expressed in 

dollars/tonne). NEORI’s proposed production tax 

credit was designed to overcome the cost gap and 

enable CO2 suppliers to bring man-made CO2 to 

market. 

• (Cost Gap) = (Total Price of CO2) minus

(EOR operators’ Willingness to Pay for 

CO2) 

Multiplier - Capture cost estimates are based on a 

thirty-year operating period for power plants and a 

fifteen-year operating period for industrial facilities. 

However, NEORI recommends a 10-year production 

tax credit, and a CO2 supplier is expected to bid for an 

incentive amount that will help cover operating costs 

of CO2 capture, compression, and transport after the 

tenth year of CO2 production. To calculate a 10-year 

incentive that would cover a longer payback period for 

CO2 suppliers, the cost gap was increased by a 

multiplier. Each multiplier represents a 15% internal

discount rate for CO2 suppliers. Sensitivity analysis 

used multipliers that reflected lower and higher 

internal discount rates, or 10% and 20% respectively. 

COST GAP MULTIPLIER

Power Plants (30-Year Payback) 1.33 

Industrial Facilities (15-Year Payback) 1.17 

The equation below reflects the overall projected 

incentive to cover the cost gap. 

• (Projected Tax Credits per Project) = (Cost 

Gap) multiplied by (Cost Gap Multiplier) 

In sum, CO2 suppliers will bid for production tax 

credits that will cover the difference between the EOR 

operators’ willingness to pay for CO2 and their cost to 

produce CO2 and bring it to market. CO2 suppliers’ 

desired incentives are therefore a reflection of the cost 

of investing in CO2 capture, transporting CO2, and 

covering a longer payback period with a 10-year 

incentive. 

• (Annual Production Tax Credit Costs) = Sum of 

(Projected Tax Credits per Project, for all projects

across all tranches) plus Sum of (Projected Tax 

Credits per Project, awarded in previous years) 

OIL PRODUCTION 

Key Variables: Annual Oil Production 

C2ES and GPI projected the incremental EOR oil production that results from incentivizing and increasing 

the supply of anthropogenic CO2. Assumptions for oil 

supply and production resulting from new incremental

CO2 supply were based on research by the Natural 

Resources Defense Council and reviewed by Initiative 

participants. The analysis accounts for the multiple 

phases of EOR production to project when the federal 
6 National Enhanced Oil Recovery Initiative (NEORI) 

government is likely to realize revenues from 

incremental EOR production. As indicated in the 

assumptions list below, a CO2-EOR project’s annual oil 

production will vary over its lifetime and reflect 

different development phases: initial injection, 

increasing production, plateau production, and 

declining production. 

Key Assumptions: 

Oil production: 

• After initial CO2 injection, 1 year lag before oil 

production commences; 

• 5 year ramp-up in oil production volume follows; 

• 5 year plateau in oil production follows; 

• 20 year decline in oil production follows; and 

• After 30 years, oil production ceases. 

CO2 purchase use: 

• Purchased CO2 injected for first 10 years at 100% 

(maximum level) 

• Purchased CO2 injections decline at 20% per year 

after peak oil production 

• Purchased CO2 continues to be injected at 10% for 

remainder of EOR project 

• CO2 injections cease at the end of 30 years 

Once plateau oil production ceases, CO2 that had 

been going to a project is redirected and used in 

different projects. The available amount of “redirected” 

CO2 increases annually as an existing project uses less 

and less CO2 in late stages of development. The 

addition of the redirected CO2 supply to the CO2 from 

a new source in a given year increases the amount of

CO2 available for initial injection in later years. This 

leads to expanding oil production over time. 

Net CO2 Utilization Rate -Although EOR 

production takes place in several regions, most 

industry experience suggests CO2-EOR oil production 

will follow the production characteristics of CO2-EOR 

oil production in the Permian Basin. While the 

characteristics of individual CO2-EOR projects vary, the 

core scenario assumes a CO2 net utilization rate of 0.4 

tonnes/barrel of oil, which is typical for the Permian 

Basin. The CO2 net utilization rate is the amount of 

tonnes of CO2 needed to produce one barrel of oil. 

Sensitivity analysis used a range of CO2 net utilization 

rates, from 0.28 to 0.7 tonnes per barrel, reflecting the

likely range of CO2 utilization rates in projects across 

the country. 

FEDERAL REVENUE 

Key Variables: Annual Oil Sales, Annual Federal Revenue, 

Present Value of Federal Production Tax Credit Costs and 

Revenues 

A federal tax credit program for CO2-EOR will 

generate additional tax revenue as the new CO2 supply 

enables additional oil production, which will be taxed 

at existing tax rates (the analysis assumes no tax 

changes other than the tax credit for CO2 capture and 

transportation for EOR). Over time, the net present

value of this new revenue far exceeds the net present 

value of the cost of the tax credits provided for CO2-

EOR. 

FIGURE 3: Example of a Project’s CO2 Injection/EOR Production Timeframe 
Analysis for Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity 7

Expected federal revenue from CO2-EOR 

production was estimated by multiplying the total 

value of oil sales by the expected percentage of the 

value of a barrel of oil that the federal government

collects in revenue. 

• (Annual Federal Revenue) = (Annual Oil 

Sales) multiplied by (Percentage of Oil Sales 

Revenue Received by the Federal 

Government) 

Percentage of Oil Sales Revenue Received by the 

Federal Government - The federal government 

receives tax income from oil production through three 

main sources: corporate income taxes, royalties from

oil production on federal land, and taxes on royalties 

going to private individuals. First, corporate income

resulting from EOR oil sales is taxed at typical federal 

corporate tax rates. Second, the federal government 

receives royalty payments for EOR production on 

federal lands, which accounts for one in six barrels of 

oil produced in the United States. Finally, the federal 

government also taxes royalty income that private 

landowners receive from oil production on their land. 

Actual tax rates will vary for specific companies and 

individuals, but the estimated percentage of the sale of 

a barrel of oil that goes to the federal government is 20 

percent. The core scenario used 20 percent as the 

percentage of a barrel of oil that is received by the 

federal government, and sensitivity analysis used 15 

percent and 25 percent as the low and high range 

estimates for revenue received by the federal 

government. 

Annual federal production tax credit program costs 

and annual federal revenue are discounted to calculate 

present value. 

Present Value of Annual Costs and Revenue 

• PV of Annual Tax Credit Program Cost = 

Costn[ 1 / (1 + i)n

 ] 

• PV of Annual Revenue = Revenuen[ 1 / (1 

+ i)n ] 

o i = discount rate 

o n = program year 

Net Present Value of Federal Tax Credit Program: 

• Sum of [(PV of Annual Revenue) - (PV of 

Annual Tax Credit Program Cost)] for all 

years of the program 

Discount Rate - Both revenues and costs to the 

federal government were discounted to determine the 

net present value of a tax credit program. All costs and 

revenues are in constant 2009 dollars. The Energy 

Information Administration’s Annual Energy Outlook 

2011 Reference case provides oil prices in 2009 dollars, 

and capture costs from the range of available literature 

were usually presented in base year 2009 dollars. The 

Office of Management and Budget’s official discount 

rate is based on the interest rates on Treasury notes 

and bonds for specified maturities. To match the 2009 

time period of oil prices and capture costs and the tenyear window for an incentive, the real interest rate for 

2009, 2.4 percent, was selected for this analysis. The 

core case scenario uses a 2.4 percent discount rate, and 

sensitivity analyses used discount rates of 2 percent and 

3.5 percent. 

Revenue Impact - The present value of annual 

federal costs and revenues was calculated to determine 

0%

50%

100%

150%

200%

250%

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35

injection volume/projection rate

Project Years

Purchased CO2

/Oil Production 

Oil

CO2
8 National Enhanced Oil Recovery Initiative (NEORI) 

the production tax credit’s overall impact on the 

federal government’s budget. The tax credit program 

was considered to be “revenue-positive” in the year

when the sum of present value annual revenues 

exceeded the sum of present value annual costs. 

Additionality Sensitivity Analysis - In the core 

scenario, 100% of incremental oil production from 

CO2-EOR is directly attributable to the federal 

production tax credit. Under sensitivity analysis, 

additional EOR production was reduced from 100% to 

90%. The following equation was used in sensitivity 

analysis: 

• (Annual Federal Revenue) = (Annual Oil 

Sales) multiplied by (Percentage of Oil Sales 

Revenue Received by the Federal 

Government) multiplied by (Percentage of 

Additional CO2-EOR Incremental Oil 

Production)
Analysis for Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity 9

APPENDIX 

TABLE 1: Publicly Available Studies on CO2 Capture Cost Reviewed by NEORI 

REFERENCE REFERENCE TITLE CO2 CAPTURE COST LINK

EIA Assumptions to the 

Annual Energy Outlook, 

Oil and Gas Module from 

NEMS 

All CO2 Sources http://www.eia.gov/forecasts/aeo/assum

ptions/pdf/0554(2011).pdf 

IEA Cost and Performance of 

Carbon Dioxide Capture 

from Power Generation 

Power Plants http://www.iea.org/papers/2011/costperf

_ccs_powergen.pdf 

CURC TBD Power Plants Forthcoming, expected to be available 

Spring 2012 

SPE 

International 

The Potential for 

Additional CO2 Flooding 

Project in the United 

States 

All CO2 sources http://science.uwaterloo.ca/~mauriced/e

arth691-

duss/CO2_General%20CO2%20Seques

tration%20materilas/CO2_Mohan_Pote

ntial%20USA%20EOR%20CO2%20Pro

jects_SPE-113975-MS-P.pdf 

IPCC Table 3.7, p. 47 All CO2 sources http://www.ipcc.ch/pdf/specialreports/srccs/srccs_chapter3.pdf 

Lindsay Carbon Capture and 

Storage in Industrial 

Applications (2010) 

(Synthesis from UNIDO) 

All CO2 sources http://www.unido.org/fileadmin/user_m

edia/Services/Energy_and_Climate_Cha

nge/Energy_Efficiency/CCS_%20industr

y_%20synthesis_final.pdf 

RCI CO2 Capture Transport 

and Storage in Rotterdam 

(2009) 

Hydrogen and Power 

Plants 

http://www.rotterdamclimateinitiative.nl

/documents/CO2%20capture%20and%

20storage%20in%20Rotterdam%20-

%20a%20network%20approach%2020

11.pdf 

HKS Belfer 

Center 

Realistic Costs of Carbon 

Capture 

Power Plants http://belfercenter.ksg.harvard.edu/publi

cation/19185/realistic_costs_of_carbon_

capture.html 

Dooley On the Long-term 

Average Cost of CO2

Transport and Storage 

Transportation and 

Storage 

http://www.pnl.gov/main/publications/e

xternal/technical_reports/PNNL17389.pdf 
10 National Enhanced Oil Recovery Initiative (NEORI) 

TABLE 2: Publicly Available Studies on the Effect of Learning on CCS Cost Estimates Reviewed 

by NEORI 

REFERENCE REFERENCE TITLE LINK 

Herzog Scaling up carbon dioxide 

capture and storage: From 

megatons to gigatons 

http://sequestration.mit.edu/pdf/Herzog_EnergyEcono

mics_2011.pdf 

Hamilton, Herzog, 

Parsons 

Cost and U.S. public policy for 

new coal power plants with 

carbon capture and 

sequestration 

http://www.sciencedirect.com/science/article/pii/S18

76610209009096 

Chan, et al. Expert elicitation of cost, 

performance, and RD&D 

budgets for coal power with 

CCS 

http://www.sciencedirect.com/science/article/pii/S18

76610211003663 

Lipponen, et al. The IEA CCS Technology 

Roadmap: One Year On 

http://www.sciencedirect.com/science/article/pii/S18

76610211008502 

IEA CO2 Capture and Storage - 

A key carbon abatement option 

http://www.iea.org/textbase/nppdf/free/2008/CCS_20

08.pdf 

Al-Juaied, 

Whitmore 

Realistic Costs of Carbon 

Capture 

http://belfercenter.ksg.harvard.edu/files/2009_AlJuaie

d_Whitmore_Realistic_Costs_of_Carbon_Capture_w

eb.pdf 

McKinsey & 

Company 

Pathways to a Low-Carbon 

Economy – Version 2 of the 

Global Greenhouse Gas 

Abatement Cost Curve 

https://solutions.mckinsey.com/ClimateDesk/default.

aspx 
Analysis for Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity 11

TABLE 3A: Core Scenario CO2 Supply Growth (2013-2022) 

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 

Power 

Plants 

Pioneer - First of a Kind Projects ($/tonne) $70 $70 $70 $70 $70 $70 $70 $70

CO2 Supply 3.9 4.26 6.89 10.96 11.94 13.02 13.63 14.28

Projects #2-#5 ($/tonne) $60 $60 $60

CO2 Supply 12.85 12.85 16.35

Nth of a Kind (Projects #6-onward) ($/tonne)

CO2 Supply

Cumulative Total CO2 Supply 0.00 0.00 3.90 4.26 6.89 10.96 11.94 25.87 26.48 30.63

Low Cost 

Industrial 

Pioneer - First of a Kind Projects ($/tonne) $38 $38 $38 $38 $38 $38 $38 $38 $38 $38

CO2 Supply 1 1 1 1 5.5 5.5 5.5 5.5 5.5 5.5

Projects #2-#5 ($/tonne) $38 $38 $38 $38 $38 $38 $38 $38 $38 $38

CO2 Supply 0.85 0.85 8.45 17.45 17.45 17.45 17.45 17.45 17.45 17.45

Nth of a Kind (Projects #6-onward) ($/tonne) $38 $38 $38 $38 $38

Natural Gas Processing CO2 Supply 3 6 9 12 15

Ammonia CO2 Supply 2 2 4 4 6

Ethanol CO2 Supply 1 1 2 2 3

SNG/Gasification CO2 Supply 1 1 2 2 2

CO2 Supply Cumulative Total 1.85 1.85 9.45 18.45 22.95 29.95 32.95 39.95 42.95 48.95

High 

Cost 

Industrial 

Pioneer - First of a Kind Projects ($/tonne) $65 $65 $65 $65 $65

Cement/Steel/Iron CO2 Supply 1 1 1 1 1

Hydrogen CO2 Supply 0.5 0.5 0.5 0.5 0.5

Refineries CO2 Supply 1 1 1 1 1

New Build Gasification CO2 Supply 1 1 1 1 1

Projects #2-#5 ($/tonne) $55 $55 $55

Cement/Steel/Iron CO2 Supply 1 1 2

Hydrogen CO2 Supply 0.5 0.5 1

Refineries CO2 Supply 1 1 2

New Build Gasification CO2 Supply 1 1 2

Nth of a Kind (Projects #6-onward) ($/tonne)

All High Cost Industrial CO2 Supply

CO2 Supply Cumulative Total 0.00 0.00 0.00 0.00 0.00 3.50 3.50 7.00 7.00 10.50

Total (All sources) 1.85 1.85 13.35 22.71 29.84 44.41 48.39 72.82 76.43 90.08

CO2 supplies are listed in million tonnes. Prices are the $/tonne capture costs. Capture costs are only listed for years when a production 

tax credit program might offer an incentive for a given CO2 supply source and technology development phase. 
12 National Enhanced Oil Recovery Initiative (NEORI) 

TABLE 3B: Core Scenario CO2 Supply Growth (2023-2032) 

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 

Power 

Plants 

Pioneer - First of a Kind Projects $70 $70 $70 $70 $70

CO2 Supply 14.7 14.7 14.7 14.7 14.7 14.7 14.7 14.7 14.7 14.7

Projects #2-#5 $60 $60 $60 $60 $60 $60 $60 $60 $60 $60

CO2 Supply 16.35 16.35 16.35 16.35 16.35 16.35 16.35 16.35 16.35 16.35

Nth of a Kind (Projects #6-onward) $55 $55 $55

CO2 Supply 7.75 9.68 12.09

Cumulative Total CO2 Supply 31.05 31.05 31.05 31.05 31.05 31.05 31.05 38.80 40.73 43.14

Low Cost 

Industrial 

Pioneer - First of a Kind Projects $38 $38 $38 $38

CO2 Supply 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5

Projects #2-#5 $38 $38

CO2 Supply 17.45 17.45 17.45 17.45 17.45 17.45 17.45 17.45 17.45 17.45

Nth of a Kind (Projects #6-onward) $38 $38 $38 $38 $38 $38 $38 $38 $38 $38

Natural Gas Processing CO2 Supply 15 15 15 15 15 15 15 15 15 15

Ammonia CO2 Supply 6 8 8 10 10 10 12 12 14 14

Ethanol CO2 Supply 3 4 4 5 5 6 6 7 7 7

SNG/Gasification CO2 Supply 3 3 4 4 5 5 6 6 7 7

CO2 Supply Cumulative Total 49.95 52.95 53.95 56.95 57.95 58.95 61.95 62.95 65.95 65.95

High Cost 

Industrial 

Pioneer - First of a Kind Projects $65 $65 $65 $65 $65

Cement/Steel/Iron CO2 Supply 1 1 1 1 1 1 1 1 1 1

Hydrogen CO2 Supply 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

Refineries CO2 Supply 1 1 1 1 1 1 1 1 1 1

New Build Gasification CO2 Supply 1 1 1 1 1 1 1 1 1 1

Projects #2-#5 $55 $55 $55 $55 $55 $55 $55 $55 $55 $55

Cement/Steel/Iron CO2 Supply 2 3 3 4 4 4 4 4 4 4

Hydrogen CO2 Supply 1 1.5 1.5 2 2 2 2 2 2 2

Refineries CO2 Supply 2 3 3 4 4 4 4 4 4 4

New Build Gasification CO2 Supply 2 3 3 4 4 4 4 4 4 4

Nth of a Kind (Projects #6-onward) $45 $45 $45 $45 $45

All High Cost Industrial CO2 Supply 6.30 8.18 10.21 12.37 14.67

CO2 Supply Cumulative Total 10.50 14.00 14.00 17.50 17.50 23.80 25.68 27.71 29.87 32.17

Total (All sources) 91.50 98.00 99.00 105.5 106.50 113.8 118.6 129.45 136.5 141.26

CO2 supplies are listed in million tonnes. Prices are the $/tonne capture costs. Capture costs are only listed for years when a production 

tax credit program might offer an incentive for a given CO2 supply source and technology development phase. 
Analysis for Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity 13

TABLE 3C: Core Scenario CO2 Supply Growth (2033-2042) 

2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 

Power 

Plants 

Pioneer - First of a Kind Projects

CO2 Supply 14.7 14.7 14.7 14.7 14.7 14.7 14.7 14.7 14.7 14.7

Projects #2-#5 $60 $60 $60 $60 $60

CO2 Supply 16.35 16.35 16.35 16.35 16.35 16.35 16.35 16.35 16.35 16.35

Nth of a Kind (Projects #6-onward) $55 $55 $55 $55 $55 $55 $55 $55 $55 $55

CO2 Supply 15.06 18.71 23.17 28.59 35.12 42.91 52.07 62.73 74.90 88.55

Cumulative Total CO2 Supply 46.11 49.76 54.22 59.64 66.17 73.96 83.12 93.78 105.9 119.60

Low Cost 

Industrial 

Pioneer - First of a Kind Projects 

CO2 Supply 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5

Projects #2-#5

CO2 Supply 17.45 17.45 17.45 17.45 17.45 17.45 17.45 17.45 17.45 17.45

Nth of a Kind (Projects #6-onward) $38 $38 $38 $38 $38 $38 $38

Natural Gas Processing CO2 Supply 15 15 15 15 15 15 15 15 15 15

Ammonia CO2 Supply 14 14 14 14 14 14 14 14 14 14

Ethanol CO2 Supply 7 7 7 7 7 7 7 7 7 7

SNG/Gasification CO2 Supply 7 7 7 7 7 7 7 7 7 7

CO2 Supply Cumulative Total 65.95 65.95 65.95 65.95 65.95 65.95 65.95 65.95 65.95 65.95

High Cost 

Industrial 

Pioneer - First of a Kind Projects 

Cement/Steel/Iron CO2 Supply 1 1 1 1 1 1 1 1 1 1

Hydrogen CO2 Supply 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

Refineries CO2 Supply 1 1 1 1 1 1 1 1 1 1

New Build Gasification CO2 Supply 1 1 1 1 1 1 1 1 1 1

Projects #2-#5 $55 $55 $55

Cement/Steel/Iron CO2 Supply 4 4 4 4 4 4 4 4 4 4

Hydrogen CO2 Supply 2 2 2 2 2 2 2 2 2 2

Refineries CO2 Supply 4 4 4 4 4 4 4 4 4 4

New Build Gasification CO2 Supply 4 4 4 4 4 4 4 4 4 4

Nth of a Kind (Projects #6-onward) $45 $45 $45 $45 $45 $45 $45 $45 $45 $45

All High Cost Industrial CO2 Supply 17.12 19.71 22.44 25.32 28.33 28.33 28.33 28.33 28.33 28.33

CO2 Supply Cumulative Total 34.62 37.21 39.94 42.82 45.83 45.83 45.83 45.83 45.83 45.83

Total (All sources) 146.67 152.9 160.1 168.4 177.95 185.7 194.9 205.55 217.7 231.38

CO2 supplies are listed in million tonnes. Prices are the $/tonne capture costs. Capture costs are only listed for years when a production 

tax credit program might offer an incentive for a given CO2 supply source and technology development phase. 
14 National Enhanced Oil Recovery Initiative (NEORI) 

TABLE 3D: Core Scenario CO2 Supply Growth (2043-2052) 

2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 

Power 

Plants 

Pioneer - First of a Kind Projects

CO2 Supply 14.7 14.7 8.7 8.7 5.3 5.3 5.3 0 0 0

Projects #2-#5 

CO2 Supply 16.35 16.35 16.35 16.35 16.35 16.35 16.35 3.5 3.5 0

Nth of a Kind (Projects #6-onward) $55 $55 $55 $55 $55 $55 $55 $55 $55 $55

CO2 Supply 103.54 119.6 136.5 153.7 170.83 187.4 203.0 217.51 230.5 242.05

Cumulative Total CO2 Supply 134.59 150.6 161.5 178.7 192.48 203.7 224.7 221.01 234.0 242.05

Low Cost 

Industrial 

Pioneer - First of a Kind Projects 

CO2 Supply 5.5 4.5 4.5 4.5 0 0 0 0 0 0

Projects #2-#5

CO2 Supply 17.45 16.6 8.5 0 0 0 0 0 0 0

Nth of a Kind (Projects #6-onward) 

Natural Gas Processing CO2 Supply 15 15 15 15 15 12 9 6 3 0

Ammonia CO2 Supply 14 14 14 14 14 12 12 10 10 8

Ethanol CO2 Supply 7 7 7 7 7 6 6 5 5 4

SNG/Gasification CO2 Supply 7 7 7 7 7 6 6 5 5 4

CO2 Supply Cumulative Total 65.95 64.10 56.00 47.50 43.00 36.00 33.00 26.00 23.00 16.00

High Cost 

Industrial 

Pioneer - First of a Kind Projects

Cement/Steel/Iron CO2 Supply 1 1 1 1 1 0 0 0 0 0

Hydrogen CO2 Supply 0.5 0.5 0.5 0.5 0.5 0 0 0 0 0

Refineries CO2 Supply 1 1 1 1 1 0 0 0 0 0

New Build Gasification CO2 Supply 1 1 1 1 1 0 0 0 0 0

Projects #2-#5

Cement/Steel/Iron CO2 Supply 4 4 4 4 4 4 4 3 3 2

Hydrogen CO2 Supply 2 2 2 2 2 2 2 1.5 1.5 1

Refineries CO2 Supply 4 4 4 4 4 4 4 3 3 2

New Build Gasification CO2 Supply 4 4 4 4 4 4 4 3 3 2

Nth of a Kind (Projects #6-onward) $45 $45 $45 $45 $45 $45 $45 $45 $45 $45

All High Cost Industrial CO2 Supply 28.33 28.33 28.33 28.33 28.33 28.33 28.33 28.33 28.33 28.33

CO2 Supply Cumulative Total 45.83 45.83 45.83 45.83 45.83 42.33 42.33 38.83 38.83 35.33

Total (All sources) 246.37 260.6 263.3 272.0 281.31 282.0 300.0 285.84 295.8 293.38

CO2 supplies are listed in million tonnes. Prices are the $/tonne capture costs. Capture costs are only listed for years when a production 

tax credit program might offer an incentive for a given CO2 supply source and technology development phase. 
Analysis for Carbon Dioxide Enhanced Oil Recovery: A Critical Domestic Energy, Economic, and Environmental Opportunity 15

TABLE 4: Oil Price Assumptions 

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 

$88.03 $91.38 $94.58 $97.62 $100.50 $103.15 $105.71 $108.10 $110.30 $112.36 

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 

$114.21 $115.96 $117.54 $118.99 $120.25 $121.34 $122.30 $123.09 $123.71 $124.20 

2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 

$124.53 $124.68 $124.94 $124.94 $124.94 $124.94 $124.94 $124.94 $124.94 $124.94 

2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 

$124.94 $124.94 $124.94 $124.94 $124.94 $124.94 $124.94 $124.94 $124.94 $124.94 

Source: EIA (2011). Annual Energy Outlook 2011 

Oil prices are “Crude Oil Prices – Imported Low-Sulfur Light Crude Oil.” Prices are listed in 2009 dollars per barrel and represent 

“weighted average price delivered to U.S. refiners.” 

Source Link: http://www.eia.gov/oiaf/aeo/tablebrowser/#release=AEO2011&subject=0-AEO2011&table=12-AEO2011®ion=0-

0&cases=ref2011-d020911a