North Dakota Oil Industry Grappling With CO2 Issues

WATFORD CITY — Though the push in the U.S. to drive down climate-warming emissions has slowed, officials at the North Dakota oil industry's annual meeting on Wednesday said they still hope that better technology for capturing them emerges.

When carbon dioxide gets released into the atmosphere, it traps heat, contributing to climate change. But if those emissions are captured, they can be pumped underground to extract oil that is otherwise unrecoverable from aging fields, a process called enhanced oil recovery (EOR). The process can reduce the carbon footprint of oil and gas, though estimates on how much vary.

It is an expensive, technically challenging and — at times — controversial proposition, but North Dakota's oil industry will need to find a way to import more CO₂ into the state than it produces to maintain steady production, officials said.

"We're thinking 100 million tons of CO₂ a year," University of North Dakota's Energy and Environmental Research Center (EERC) official John Harju said. "Just as a point of reference, the coal plants in our state today only emit about 30 million tons."

The EERC has worked on carbon capture technology for decades.

While some projects have taken off in North Dakota, bigger efforts have run into both financial and political challenges — especially some of the large pipelines that would be needed to import CO₂ from out of state.

"The capture costs are exorbitant when you start looking at this ... these are multibillion-dollar projects and they have long timelines," Harju said.

Capturing and transporting the CO₂ is just one part of making EOR a reality in the Bakken. While EOR has been practiced for decades in conventional oil fields, the Bakken is a shale formation with unconventional wells; other unconventional fields face similar challenges.

"We know it works, we know we can do it. The much higher bar is: How do you do that and make a return?" Devon Energy CEO Clay Gaspar said.

Even some of the largest companies are still working out the details.

ExxonMobil and its subsidiary Denbury have active EOR projects in conventional wells in southwest North Dakota, according to Pam Heatherington, who is both the Americas general manager for ExxonMobil and CEO of Denbury.

"ExxonMobil is working really hard to figure out a business model to make that work," she said. "Our scale and pipeline network should hopefully allow us to do that."

Both the North Dakota state government and the federal Energy Department have historically been major funding sources for EOR research efforts.

But recently, getting federal funding for this research has slowed.

Since President Donald Trump took office in January, his administration has either paused or cut spending across numerous agencies. The Energy Department has not been an exception. Numerous loans and grants that were already approved but not disbursed under former President Joe Biden remain paused. Billions of dollars of projects have also been canceled.

"Essentially nothing has been done with their (2025 federal) appropriations for the last eight months," Harju, with the EERC, said. "They've been busy reeling things in and looking at how they might repurpose resources ... into things that are ideally very accretive to North Dakota."

Uncertainty over grants and loans is not the only challenge. A relatively lower oil price for the last few months — which is projected to continue — also reduces the incentives to set up EOR infrastructure.

"It's sad, but true, for 23 years we've been trying to get these stars to align and there's always some little wrinkle that seems to occur as we're trying to do so," Harju said.

Still, representatives from the industry said they were more optimistic about its future on Wednesday than they were at this time in 2024. Despite the U.S. becoming the world's largest producer of oil and gas in 2023, the Biden administration drafted up multiple new rules and regulations aimed mostly at limiting climate pollution. The industry argued the rules would hamper production.

Since taking office, the Trump administration has pursued a massive deregulatory push.

While federal funding has been slow rolling, EOR does appear to have the support of the Trump administration.

Energy Department Chief Chris Wright addressed the conference with a video call from Austria.

"Let's figure out how we can inject CO₂ underground to increase our oil recovery and extend the life of the Bakken for decades to come," he told the conference on Wednesday.

There are also some funding bright spots for EOR researchers. The North Dakota Legislature appropriated $25 million for EOR projects, while the federal tax credit for EOR was raised to $85 per metric ton by Congress this summer, in line with the tax credit for carbon storage.

Pam Heatherington, Americas general manager for ExxonMobil, left, and Kathy Neset, of Neset Consulting, speak about ExxonMobil's operations in North Dakota at the North Dakota Petroleum Council's annual meeting in Watford City.

Figuring out EOR in the Bakken will "future-proof" the state's industry, said Kathy Neset, who runs an oil field consulting company out of Tioga.

But large supporters of the industry are mostly concentrated in the Republican Party which in addition to controlling the presidency has a majority in Congress, though it is only guaranteed for about another year and a half.

"Right now we have a window," Petroleum Council President Ron Ness said.

Moving quickly on research will be necessary, Harju said.

"The next 18 months we absolutely need to establish confidence that we know how to extract incremental molecules out of the Bakken system," he said.

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