Carbon management engineering company Spiritus has signed preliminary agreements with three U.S. oil and gas producers to sell them captured CO2 for enhanced oil recovery. Under the EOR process, carbon dioxide is injected into reservoirs to help unlock additional crude output.
Spiritus CEO Charles Cadieu told Bloomberg that the injections could help bring out an additional 70 million barrels of oil from wells in Texas, the Rockies, and the Midwest. He said the carbon removal market is currently under pressure, pushing the company toward segments with stronger commercial demand.
According to the report, cuts to U.S. federal incentives for carbon capture and storage projects, along with uncertainty over future regulation, have led some startups to rethink their business models. Instead of focusing only on capturing and storing CO2, they are increasingly looking to sell it to oil companies to support higher recovery rates.
The economics of the sector have also worsened because carbon capture technologies, including direct air capture, are still not fully mature while project costs remain high. The article notes that in the U.S., the Trump Administration removed many projects from funding, while major buyers of carbon credits, including tech giants, scaled back purchases as they shifted investment toward AI development.
That tougher backdrop has forced some businesses to shut down and others to pivot. Spiritus is among the latter and is now leaning more heavily into supplying CO2 to U.S. oil producers.
Support for that strategy also comes from a University of Houston report released last month. It found that as many as 137 billion barrels of U.S. oil are technically recoverable using CO2-enhanced oil recovery. The white paper said more than half of the U.S. oil resources considered technically favorable for the technology are located in Texas and the U.S. Gulf Coast.
The University of Houston report said injected CO2 can help revive mature oil fields by reducing oil viscosity, improving sweep efficiency, and restoring reservoir pressure. That, in turn, can generate incremental production beyond primary and secondary recovery. The paper also argued that CO2-EOR can support permanent carbon storage and yield oil with uniquely low carbon intensity for global markets.
