56 TEXAS JOURNAL OF OIL , GAS , AND ENERGY LAW [ Vol . 16:1
that ’ s producing the last barrel of oil . And that barrel of oil has to be from [ CO 2 ] enhanced oil recovery , because that ’ s the lowest emission barrel possible .” 59 According to recent data , Oxy injected more than 2.6 Bcf , or approximately 136,800 metric tons , of both CO 2 from naturally-occurring sources and anthropogenic CO 2 per day in connection with its thirty-four active EOR projects in the Permian Basin in 2019 . 60
3 . Application of CO 2 for Sequestration Projects
According to the Energy Department , deep saline formations could potentially store up to 12 trillion metric tons of carbon dioxide . 61 The injection process for sequestration of CO 2 is similar to the injection process for EOR operations . However , unlike EOR operations , sequestration does not entail the extraction of hydrocarbons . In other words , “ storing CO 2 in deep saline reservoirs does not have the potential to enhance the production of oil and gas or to offset costs of [ CCUS ] with revenues from the produced oil and gas .” 62 However , oil producers , service companies , and midstream operators are the most logical groups to play a role in the sequestration process since they have the technical expertise and experience required to physically move the CO 2 and conduct the operations necessary to store captured CO 2 in these deep saline formations . One study notes :
Most industrial and power plant operators lack the knowledge and ability to execute a large-scale CO 2 injection and monitoring program . To receive the expanded tax credits , they will likely partner with CO 2 services companies . Potential partners may include traditional oil and gas companies with CO 2 EOR experience ( e . g ., Oxy , Denbury ), traditional oil and gas service companies ( e . g ., Schlumberger , Baker Hughes ), or new entities willing to shoulder the operational and post-operational responsibilities . They may also include CO 2 pipeline companies ( e . g ., Kinder-Morgan ). 63
59 . Id .
60 . Vincent A . Alspach , Comment in response to Notice 2019-32 Regarding the Section 45Q Credit for Carbon Oxide Sequestration ( July 2 , 2019 ), https :// beta . regulations . gov / document / IRS-2019-0026- 0031 .
61 . Allyson Versprille , Carbon-Capture Projects Face Uncertain Future Amid IRS Delays ,
BLOOMBERG TAX ( Feb . 11 , 2020 , 3:38 PM ), https :// news . bloombergtax . com / daily-tax-report / carboncapture-projects-face-uncertain-future-amid-irs-delays ( citing Carbon Storage R & D , OFF . OF FOSSIL
ENERGY , https :// www . energy . gov / fe / science-innovation / carbon-capture-and-storage-research / carbonstorage-rd ( last visited Nov . 4 , 2020 )). 62 . FOLGER , supra note 11 , at 9 . 63 . Advancing Large Scale Carbon Management : Expansion of the 45Q Tax Credit , ENERGY FU-
TURES INITIATIVE , 20 ( May 2018 ), https :// static1 . squarespace . com / static / 58ec123cb3db2bd94e057628 / t / 5d2ce5a6d73552000171a460 / 1563223469397 / EFI _ Advancing % 2BLarge % 2BScale % 2BCarbon % 2B Management- % 2BExpansion % 2Bof % 2Bthe % 2B45Q % 2BTax % 2BCredit _ 2018 . pdf .