On May 21, 2025, the Joint Minerals, Business and Economic Development Committee met in Casper, Wyoming. Lawmakers and industry leaders examined the future of enhanced oil recovery (EOR) in the state—an effort that could unlock an estimated 2 billion barrels of stranded oil and generate billions in new revenue.
The committee’s discussion highlighted the technical potential of carbon dioxide (CO2) injection and alternative recovery methods, as well as the economic, regulatory and infrastructure challenges that need to be overcome for broader implementation.
Recently, U.S. oil and gas executives have indicated a growing consensus that the domestic shale boom has plateaued with future production increases likely to be modest due to various economic and geologic factors. This could set up a golden age for EOR in the U.S., especially in Wyoming. In 2025, the Wyoming legislature passed Senate File 17, establishing a stimulus program to promote the use of CO2 in EOR operations. This could give Wyoming a distinct advantage in developing these resources.
A LONG-TERM RESOURCE OPPORTUNITY
Enhanced oil recovery, particularly through CO2 injection, is not new to Wyoming. Since 1986, CO2-based EOR projects have recovered more than 173 million barrels of oil that would have otherwise remained in the ground. These projects have generated more than $1.1 billion in tax revenue for the state, according to Lon Whitman, director of the Enhanced Oil Recovery Institute (EORI).
EOR typically unfolds in three phases:
- Primary recovery, where natural reservoir pressure produces about 15% of oil.
- Secondary recovery, often using waterfloods, adds around another 20%.
- Enhanced recovery, including CO2 injection, can yield around an additional 25%.
Even after these efforts, about 40% of original oil in place remains unrecovered—highlighting both the potential and the limitations of current techniques.
CAPITAL AND INFRASTRUCTURE NEEDS
While the promise is significant, so are the costs. Some projects require more than $300 million in capital, including pipelines and CO2 acquisition contracts. One example is TR Operating’s EOR initiative in northeast Wyoming, which depends on a 41-mile spur pipeline and large-scale CO2 purchases from ExxonMobil’s Shute Creek facility.
CO2 pricing for EOR is often indexed to the West Texas Intermediate (WTI) oil price, typically around 2% of WTI per thousand cubic feet (MCF) or about $1.26/MCF at $63 oil, equating to roughly $22 per ton for CO2. Operators may spend tens of millions annually on CO2 alone before seeing production returns.
DIVERSIFYING RECOVERY TECHNIQUES
While CO2 flooding remains the flagship approach, EORI and industry partners are testing other methods to reduce costs and expand applicability.
These methods include:
- Polymer-augmented waterfloods have boosted oil production in smaller fields like Edsel.
- Natural gas liquids (NGLs) are being trialed at Skull Creek Field, with promising mobility and reuse advantages.
- Enriched air injection, using portable direct air capture units, is underway in the Alpha Field.
These alternative techniques aim to address the limitations of CO2 EOR in fields lacking infrastructure or favorable geology.
CO2 SUPPLY AND 45Q TAX CREDIT DEBATE
Wyoming’s CO2 supply is distinctive in that it is exclusively derived from captured emissions. This is predominately accomplished at ExxonMobil’s Shute Creek Facility, which is recognized as the largest operation globally for the capture of helium and CO2. This aligns with federal policy under the 45Q tax credit, which provides incentives for both geologic storage and EOR use of CO2. However, concerns persist over the disparity in credit value—$85 per ton for storage vs. $60 for EOR. Federal lawmakers are working to level the playing field or even increase the EOR rate to $120 per ton. Wyoming officials are hopeful this will incentivize productive use of CO2 in-state rather than sending it via pipeline to places like North Dakota, which offers its own set of EOR tax credits and infrastructure exemptions.
REGULATORY HURDLES AND BONDING REFORM
The Wyoming Oil and Gas Conservation Commission oversees unitization and injection wells, but several barriers exist:
- Aquifer exemption processes must clear both state and EPA requirements.
- Old wells may need costly retrofitting or re-plugging to prevent contamination.
- New bonding requirements have challenged smaller operators; however, Wyoming lawmakers recently created a bonding pool program to improve access to capital.
Commission staff reported improvements in coordination with the Bureau of Land Management (BLM) and EPA, which have historically delayed federal permitting.
LEGISLATIVE MOMENTUM AND INDUSTRY URGENCY
The Petroleum Association of Wyoming (PAW) urged the legislature to act boldly to retain Wyoming’s CO2 and deploy it for state-based oil recovery. PAW warned that without further action, states like North Dakota—with their own tax incentives and infrastructure—could outcompete Wyoming for CO2 usage.
Industry leaders with the Wyoming Energy Authority discussed additional ideas, such as expanding Wyoming’s Energy Matching Funds to specifically support EOR infrastructure and exploring state-backed financing models similar to North Dakota’s state-run bank. Lawmakers expressed interest in developing a strategic field prioritization list for pipeline investment and potential future state involvement in EOR project financing.
CONCLUSION
With world-class CO2 resources and extensive stranded oil reserves, Wyoming is well-positioned to lead the next wave of enhanced oil recovery. To seize this opportunity, state officials recognize the need for coordinated investment, regulatory streamlining and a proactive approach to developing carbon infrastructure. As state legislative and federal policy evolves, EOR may once again become a major economic engine for Wyoming.
