Climate Startup Signs CO2 Deals With Three U.S. Oil Producers
Carbon management firm Spiritus has signed preliminary agreements with three U.S. oil and gas producers to sell captured CO2 for use in enhanced oil recovery (EOR), the company told Bloomberg. The move reflects a wider shift by some carbon-capture start-ups toward supplying CO2 for oil production amid shrinking federal incentives and a softer market for carbon removal services.
Why It Matters
This development highlights how policy changes and weaker demand for removals are reshaping the carbon-capture industry, pushing some firms to pursue revenue from EOR rather than permanent storage. It also underscores tensions between climate goals and near-term fossil fuel production dynamics, since CO2-EOR can both store carbon and increase oil output.
Key Facts
- Company: Spiritus
- Deals: Preliminary agreements with three U.S. oil and gas producers
- Potential additional oil unlocked: 70 million barrels (estimated by Spiritus CEO Charles Cadieu)
- Regions cited for potential incremental oil: Texas, the Rockies, and the Midwest
- Report cited: University of Houston white paper
Start-up carbon-management company Spiritus has shifted part of its business model to sell captured carbon dioxide to oil producers for enhanced oil recovery, signing preliminary agreements with three U.S. firms, the company told Bloomberg. Spiritus CEO Charles Cadieu said the injected CO2 could help unlock roughly 70 million barrels of additional oil from fields in Texas, the Rocky Mountains and the Midwest. The pivot comes as federal support for carbon-capture projects has waned and the market for carbon removal has cooled. After initial momentum for technologies including direct air capture, economic and commercial prospects have deteriorated amid reduced government funding and high project costs. The Trump administration removed a number of projects from federal financing, and large corporate buyers of carbon credits have pulled back as they reprioritize investments such as artificial intelligence. Faced with a weaker removal market, some companies have exited the space while others have moved toward selling CO2 for EOR, where demand from oil producers has remained strong. Cadieu described the pull of the EOR market as a primary commercial driver for Spiritus’ decision to supply CO2 to producers rather than focus solely on permanent storage. A University of Houston white paper cited in coverage of the trend estimates that up to 137 billion barrels of U.S. oil are technically recoverable using CO2-EOR, with more than half of those resources located in Texas and along the U.S. Gulf Coast. The report notes that injecting CO2 into mature reservoirs can reduce oil viscosity, improve sweep efficiency and restore reservoir pressure, producing incremental output beyond primary and secondary recovery while also offering a pathway to store CO2 underground.