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Greenhouse Gases

We are mining CO₂ in America

As society strains to contain greenhouse gas emissions, companies are pulling carbon dioxide out of geological deposits

by Craig Bettenhausen
April 30, 2023 | A version of this story appeared in Volume 101, Issue 14


A set of tanks and towers on a flat plane outdoors with a sunset in the background.
Credit: C5 Process Group
Equipment like these tanks from C5 Process Group are used to separate oil, gas, and water at enhanced oil recovery sites.

You might be surprised to learn that a handful of companies are extracting as much as 60 million metric tons (t) of carbon dioxide per year from geological reservoirs. That’s pure CO2 being pulled out of natural deposits for use up here on the surface.

Around 3% of this mined gas goes toward food and beverage, refrigeration, welding, lab gas, and other applications known collectively as the merchant CO2 market, according to a 2014 report by the US Department of Energy. But most mined CO2 is injected back into the ground to extract fossil fuels from depleted oil and gas fields, a process known as enhanced oil recovery.

Why would anyone pull CO2 out of the ground when the whole world seems intent on doing the opposite? Governments and corporations are spending billions of dollars to curtail or capture emissions of the greenhouse gas, claw it out of the atmosphere, and inject it deep underground for permanent storage.

The answer is that the mined gas is really good. The CO2 coming out of the Jackson Dome formation in Mississippi is 98% pure, and fields in Colorado and New Mexico yield similarly clean CO2. At that purity, compressing it to a liquid and piping it to enhanced oil recovery sites is simple and affordable.

But some industry watchers say mining CO2 is not sustainable and could even be banned at some point. That prospect is just one of many potential changes confronting companies involved in the sale and use of CO2, a gas that is both accumulating dangerously in our atmosphere and an important item of commerce.

To put CO2 mining in perspective, 60 million t per year has about the same CO2 footprint as 16 coal-fired power plants, according to the US Environmental Protection Agency. The US’s total greenhouse gas emissions are equivalent to 6.3 billion t of CO2, the EPA says.


A quarter of the carbon dioxide in the US merchant market is pulled out of the dedicated geological resevoirs. The rest is captured from various chemical production processes.


The merchant CO₂ market includes everything except enhanced oil recovery and is dominated by various forms of cooling. Indoor farming is only 3% but is the fastest-growing application.

"Sources: Intelligas Consulting, Gasworld.

2022 total = 10.3 million metric tons

Luke Lana, host of the CO2 industry podcast Catching Carbon, summed up well the irony of mining CO2 in the show’s second episode, recorded last summer. Lana’s main job is leading project development for TomCO2 Systems, an industrial CO2 and refrigeration equipment supplier. “We’re talking about pulling out of naturally occurring domes, while legislation is pushing to sequester CO2,” he said. “We’re putting it into the ground, and we’re pulling it right back out. How long is that really going to last? . . . How long until we say, ‘These domes are closed up; this is going exactly against everything we’re pushing for’?”

Lana’s cohost and TomCO2’s vice president for sales, Jeff Holyoak, tells C&EN that he isn’t aware of any active legislation to ban CO2 mining but that it seems inevitable. Shutting off the taps on mined CO2 would be a clear climate win, especially if it also curtailed petroleum production, but it would cause major headaches for industries like meatpacking and beer brewing, which also depend on the mined CO2.

“Twenty-five percent of our commercial CO2 comes from those domes,” Holyoak says. “If you were to shut them down without a replacement, we would have all sorts of problems.”

The major players in the so-called produced CO2 space are the petroleum firms Denbury, which controls the Jackson Dome supply; KinderMorgan, which has CO2 fields in southeastern Colorado; and Occidental, which extracts CO2 from wells in Colorado and New Mexico.

Mining for CO2 is mostly a US phenomenon. Linde and a handful of regional firms extract CO2 from wells and geothermal projects in Turkey, but the output is small compared with operations in the US.

Where you get your CO2 from today will not be where you get your CO2 from tomorrow.
Jeff Holyoak, vice president for sales, TomCO2 Systems

The consulting firm Advanced Resources International says enhanced oil recovery operations in North America used 68 million t of CO2 in 2014 and 38 million t in 2021. Consumption of CO2 for this use fluctuates widely based on the cost of petroleum. Globally, enhanced oil recovery uses 70–80 million t of CO2 per year, according to a 2019 report from the International Energy Agency.

Advocates for enhanced oil recovery argue that most of the injected CO2 stays underground, more or less returning mined gas to where it started. And companies like Denbury claim that if the CO2 is a by-product recovered from, say, an ethanol plant, injecting it underground for enhanced oil recovery more than makes up for the carbon in the extracted petroleum. The International Energy Agency says the carbon math on such “blue oil” can work at some enhanced oil recovery sites, but only if the CO2 comes from sustainable biomass or is captured from ambient air.

Mining pure geological reservoirs is one of a few sources of CO2 for enhanced oil recovery. Natural gas deposits often contain CO2, and energy companies always separate it out before sending the natural gas to customers. Converting natural gas to hydrogen also produces a voluminous CO2 by-product that can be used to recover oil.

Oil companies aren’t the only ones dependent on mined CO2. Gas industry consultant Maura Garvey says the US merchant CO2 market depends on mined gas for 25% of its overall supply of about 10 million t per year. Carbon dioxide from the production of ethanol and ammonia cover a combined 59%; hydrogen production and other sources make up the difference. Merchant market customers are served by industrial gas companies like Linde, Air Li­quide, Air Products, Messer, and Matheson.

Mined CO2 is a cheap and usually reliable supply that insulates users from more volatile sources, such as ethanol and ammonia manufacturing, where CO2 production levels are subject to the vicissitudes of the main business.

In an attempt to break away from this fickle market for high-purity gas, commodity-scale brewers like Anheuser-Busch have been canning beer with CO2 harvested from fermentation for years, but the equipment doesn’t pencil out as well for craft and microbreweries. As a result, all but the biggest breweries typically vent their by-product CO2 and buy liquid CO2 on the merchant market. After acquiring Earthly Labs, Chart Industries began offering CO2 recycling equipment sized and priced for craft breweries in 2022.

Another complication for CO2 users is that government incentives for carbon sequestration and enhanced oil recovery are starting to draw by-product CO2 out of the merchant market. Gary Robson, CEO of the CO2 purification specialist Sure Purity, says that carbon-free processes may replace conventional ammonia and hydrogen production in a handful of years and that firms attempting to turn CO2 into fuels and chemicals could gobble up enormous quantities of available CO2.

In the long term, carbon capture might provide plenty of CO2 for anyone who wants it. Prices for carbon capture systems are dropping as more are built and delivered, and captured carbon can protect CO2 users from disruptions like the loss of a major supplier, Robson says.

Only about 25% of US ethanol plants capture their CO2, for example. The nonprofit Global CCS Institute recently reported that 43 million t of carbon capture capacity is operational worldwide now and that another 208 million t is in development.

“Where you get your CO2 from today will not be where you get your CO2 from tomorrow,” Holyoak said in another Catching Carbon episode. He tells C&EN that CO2 prices will continue rising, from about $20 per metric ton traditionally to at least the $85 per metric ton the US Inflation Reduction Act offers in tax credits for sequestration.

Holyoak explains that the legislation creates a price floor for CO2. “If I have that capability in my operation to capture it, sequester it, and get my tax credit, why would I sell it for less than $85?” he asks.

Robson urges CO2 users to figure out their future supply plans now. The UK recently shuttered its last natural gas–based ammonia plant, which was also the main source of merchant CO2 for the British Isles, he says. As a result, plants that use CO2 to process meat or make beer have had to curtail production or shut down if they weren’t able to secure an imported supply.

Despite the supply crisis, he says, UK customers weren’t willing to turn to mined CO2 from Turkey because of the impact on their products’ carbon footprint. Instead, they imported CO2 derived from biogas and other anthropogenic sources in the EU and Asia.

Denbury declined to participate in this article, but a look at the firm’s recent financial and sustainability reports suggests that it thinks the days of mining CO2 are numbered—though there are still about 4 billion t in Jackson Dome. The company says it reduced the share of mined CO2 in its enhanced oil recovery pipelines from 75% in 2019 to 60% in 2022. Continuing that trend is Denbury’s main way of attacking an internal goal to be net negative in greenhouse gas emissions by 2030, the reports say.

The firm is also developing a carbon management business that includes CO2 sequestration sites, offtake agreements with industrial carbon capture developments, and supply agreements with CO2-to-chemicals projects.

In February, Denbury said that it will supply more than 2 million t per year of CO2 to a pair of companies in Texas seeking to make fuels from CO2 and hydrogen; it also said it had invested in companies offering carbon capture technologies. It’s not a total shift to cleantech, however. That same day, the firm reported more than $1 billion in 2022 sales of oil from enhanced oil recovery, compared with sales of $61 million from selling and sequestering CO2.

Holyoak says all companies that supply CO2 today will struggle to adapt to changes that will occur in the next 3–5 years—including where CO2 comes from, where it goes, and what it costs. And mined CO2 is a prime example. “It’s a cash cow with sunk costs,” Holyoak says. “I think the current distribution market falters because they won’t be able to see their way out of the model that they’re in today. . . . Can they really see a different business model?”.


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