A new study found that CO2 capture and utilization at existing and new coal-fired power plants and coal-to-liquids facilities could boost U.S. oil production by more than 3.5 million barrels per day for more than 40 years.

The study, prepared for U.S. Energy Secretary Steven Chu by the National Coal Council, features input from 60 energy experts in coordination with the National Petroleum Council. The focus is enhanced oil recovery, or EOR, which has increased U.S. oil production for almost half a century, the NCC said.

"It's time to think of CO2 as a valuable commodity," study chairman Richard Bajura said. "Advanced coal technology is key to affordably realizing deep reductions in emissions. The U.S. uses more coal than any nation except China, and potential production of U.S. oil from coal-derived CO2 for CCUS/EOR applications dwarfs other projected new domestic sources. We have a unique opportunity to more fully use domestic, low-cost coal to access more oil."

According to the NCC, research sponsored by the National Energy Technology Laboratory shows that more than 60 billion barrels of oil is economically recoverable using next-generation technology at an assumed world oil price of $85 per barrel.

"CO2-based EOR projects are operating profitably even in the current challenging economic environment," added Fred Palmer, chairman of the NCC's Coal Policy Committee. "Successful deployment of CCUS/EOR responds to the U.S. administration's goal to reduce emissions 80 percent from 2005 levels by 2050. With a regulatory framework that facilitates the increased deployment of this technology at scale, we can increase use of domestic energy, fuel economic growth and enhance national security."

The expansion of CO2-based enhanced oil recovery can significantly reduce emissions while reaching oil not accessible by conventional drilling, the NCC said. However, "the limited availability of CO2 has been a constraint." The study calls for capture of CO2 from coal and transportation through a robust network of pipelines. With CO2 capture and utilization, or CCUS, technology, 18 billion to 31 billion tonnes of additional CO2 could be injected into U.S. oilfields over at least the next 40 years, compared to only 2 billion tonnes available from natural sources and natural gas processing.

The report includes these additional findings:

* By 2035, the combination of coal-based EOR and CTL technology could satisfy up to 30% of U.S. liquid fuel demand and ensure energy security for decades. Much of the CO2 could come from large coal-fired plants distributed broadly across the U.S., including economically recovering regions like the Ohio River Valley.

* Use of CO2-based EOR and CTL could generate $200 billion in economic activity, more than 1 million skilled jobs and $60 billion in tax revenues.

* At least 100 GW of advanced coal generation capacity could be built or retrofitted over the next two decades. These plants could consume an additional 300 million tons of coal annually.

* CTL plants with carbon capture could convert coal into more than 2.5 million barrels per day of additional oil. An additional 450 million tons of coal per year could be used in these operations.

* Capturing a high volume of CO2 for commercial purposes, coupled with CTL operations, would increase coal use to 1.75 billion tons per year. "This production level is well within the capability of the United States, home to 30 percent of the world's coal reserves," the NPC said.

Earlier in June, Swan Hills Synfuels applied to Alberta regulatory agencies for approval to build and operate a power plant fueled by synthetic fuel derived from coal. Emissions will be captured and stored for use in EOR. Also, Exelon Corp. teamed up with The Shaw Group Inc. to develop power plant technology aimed at generating revenue from sales of captured CO2 for enhanced oil recovery.

In May, Bloomberg published its semiannual ranking of the most advanced large-scale coal and natural gas-based CCUS pilot projects, including projects designed for EOR. In March, Summit Power Group Inc. announced that it will team with National Grid plc and Petrofac to build a 400-MW coal-fired power plant with options for CO2 storage and, later, EOR.

The National Coal Council is a private, nonprofit advisory body chartered by the secretary of energy under the Federal Advisory Committee Act.

Copyright 2012 SNL Financial LC. All Rights Reserved.

(Originally published June 25, 2012, in SNL Daily Coal Report.)