In Trump tax bill, using carbon to recover more oil now as attractive as storing it

Tax credit will shift majority of use to getting more oil, experts predict.

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The Petra Nova Carbon Capture Cogen plant in Texas captures carbon dioxide from the W.A. Parish power plant for enhanced oil recovery. Photo: NRG Energy.

By Allison Prang

(Allison Prang is a freelance climate journalist based in Washington, D.C. Her work has appeared in The New York Times, The Wall Street Journal, POLITICO and Canary Media.)

WASHINGTON, D.C. (Callaway Climate Insights) — The “Big Beautiful Bill” took many hits at programs and incentives to fight climate change. One that flew under the radar makes using harmful carbon (CO₂) to push more oil out of the ground as financially attractive as storing it.

Companies through the federal 45Q tax credit now get the same amount of money for every ton of CO₂ they capture and use to recover more oil as they can if they trap the greenhouse gas and permanently store it. That could make companies less inclined to keep the CO₂ they trap from entering or re-entering the atmosphere — and by extension, help fight global warming — by permanently storing all of it and instead compel them to use it to produce more oil in a process known as enhanced oil recovery.

There’s “now going to be a lot more EOR than [there] would’ve been otherwise,” said Marcus Lima, cofounder and CEO of Heimdal, a Colorado-based carbon removal company that has a five-acre direct air capture plant in Oklahoma and says it will be able to capture as much as 7,000 tons of CO₂ a year. That CO₂ gets transported 200 feet from the plant to an oil well where it’s used for enhanced oil recovery.