Anthropogenic CO2 used and trapped within an EORrepresents abated emissions, but questions have been raised about whether it reduces emissions on a project life-cycle basis. This is primarily because CO2 EOR involves producing oil. Although energy is consumed and CO2 produced in the CO2 EOR process, it is the emissions associated with the combustion of the resulting refined petroleum products that can tip the balance from abatement to increased emissions overall. If CO2 EOR just displaces other oil supplies, and does not change the level of petroleum product consumption, CO2 EOR reduces emissions. For an example of a study that assumes no change in oil consumption see Faltinson and Gunter (2010). See Jarmillo et al. (2009) for a study which compares life-cycle emissions from oil production from CO2 EOR relative to other sources of oil.
The extent to which oil production from CO2 EOR is exactly offset by a reduction in other sources of oil supply depends on the impact CO2 EOR has on global oil consumption and associated change in the market price of oil. A lower oil price will be required to increase consumption. But a lower price of oil would reduce total oil supply from other suppliers as marginal projects became uneconomic. That is, even as oil consumption increases, the change in consumption is less that the incremental production of CO2 EOR as other supplies of oil decline in response to lower prices.
Based on recent estimates of the responsiveness of consumption and production to oil prices changes (e.g. Baumeister and Peersman 2011), the increase in consumption is likely to be between 17–67 per cent of the increase in production resulting from CO2 EOR with a median increase of 50 per cent. That is, given the demand and supply response, each barrel of oil produced from CO2 EOR most likely displaces half a barrel of oil from other production sources resulting in a net increase in oil consumption of half a barrel.
Given this range of likely consumption increases due to each barrel of CO2 EOR production then it is likely that there is a net reduction in emissions when A-CO2 is used as the source given the average efficiency of CO2 EOR production. This analysis includes accounting for the emissions associated with recycling the CO2 and refining the oil into petroleum products. Nonetheless, in certain cases, if production of oil is very high for a given amount of injected CO2 it is possible for net emissions to be positive at a project level. Although defining the boundaries of a project is critical to correctly account for life-cycle emissions from EOR, even including the energy and CO2 costs incurred in the cleaning, compression and transport of the CO2, an unpriced good that would otherwise be released to the atmosphere still results in negative life-cycle emissions on average.