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>> While the American oil business cycles through boom, bust and now boom again, some producers have managed to weather the ups and downs of oil prices. Their secret, a low cost method of production that keeps the oil flowing and is beloved by environmentalists. I'm Ernie Scheyder with Reuters in Hobbs, New Mexico, where Occidental Petroleum is using carbon dioxide to literally push oil out of old wells that have been operating since the 20s or 30s.
Now it's a process called enhanced oil recovery and while it's not new, it's been around for about 40 years, Oxy and other companies like it are hoping that Congress expands a tax credit so needed to make the cost of carbon dioxide cheaper. Output from a typical shale well might decrease after a few years, but carbon dioxide injection wells across Texas and New Mexico have pumped consistently for decades.
The challenge is getting all that compressed carbon dioxide. Oxy pumps 1.9 billion cubic feet of CO2 into the ground each day. Currently, a US government tax credit pays oil producers $10 per metric ton of CO2 injected into wells, that offsets some of the costs of production. But a bill before the US Congress would raise that credit to $35 per metric ton, making the method more affordable and more popular.
Supporters say that would encourage carbon emitters, such as coal-fired power plants, to do more to capture and sell the gas back to producers. A move that might both cut taxes and carbon emissions means it has support from Senate Republican Leader Mitch McConnell and environmental groups such as the Sierra Club.
So far, CO2 has only been used in traditional oil wells but scientists in North Dakota are studying to figure out just how use carbon dioxide to coax more oil out of shale as well.