Canada’s CCUS market just gained the financial catalyst it has been missing. The conversation around advancing Carbon Capture, Utilization, and Storage (CCUS) projects has been reignited by the recently released Canada-Alberta Memorandum of Understanding (MOU) with the inclusion of Enhanced Oil Recovery (EOR) as Investment Tax Credit eligible. This announcement aligns Canada’s federal tax incentives with the changes made in the US, which levelized incentives for CCUS and Carbon Capture and Storage (CCS) projects. This change has been highly anticipated as EOR is a means to decrease anthropogenic emissions, incrementally increase production from mature reservoirs, and enhance revenue streams for the producer and the province.

Decrease Hard-to-Abate Emissions

• EOR is recognized by ISO as an equally effective means of permanent sequestration of CO₂ emissions as CCS, with both resulting in <1% losses over the lifetime of the project. In addition, the Canadian Clean Fuel Regulations recognized EOR as a means to reduce the carbon intensity of produced fuels. Both highlight the importance of EOR in the suite of decarbonization mechanisms needed to meet international climate commitments.
• EOR projects have been operating in Canada for decades. EOR reservoirs are already mapped creating the potential for rapid deployment compared CCS projects utilizing formations with greater uncertainty. This could allow EOR projects to be brought to scale at the speed of emitters installing carbon capture at the source.

Boost Production from Mature Assets

• CO₂ EOR provides for incremental recovery of oil and gas from mature reservoirs, while permanently storing anthropogenic emissions. This allows for the continued production of these assets to meet growing global demands.
• Extending the lifespan of existing oil and gas reservoirs reduces the need to drill for new hydrocarbon resources. This could decrease additional anthropogenic emissions from drilling and production, while also reducing the environmental footprint associated with constructing additional well pads and pipelines.

Unlock Revenue Streams

• EOR creates incremental revenues for the producer through the production of additional oil and gas. This additional revenue stream creates the potential for EOR projects to offer lower transportation and storage fees for large emitters looking to sequester emissions. The inclusion of EOR under the ITC reduces the high cost of capital to install capture facilities on-site. In combination with the renewed commitment to carbon pricing, these announcements could tip the scales toward a positive FID for project proponents.
• The increased production of oil and gas results in the generation of more royalties for the province where the resources are produced. Additionally, the incremental tax revenues contribute to the economic stimulus of programs and services for people across Canada.

GLJ’s recently released EOR map shows historical and current EOR projects in Alberta and Saskatchewan. GLJ’s long history of expertise with EOR projects results in a clear and actionable path forward. With the announcement of ITC eligibility, EOR is a bankable pathway to cut emissions, boost recovery, and strengthen project economics. Now is the time to consider integration of EOR into your decarbonization strategy.

GLJ’s CO₂-EOR assessment can identify oil fields for suitable reservoir criteria to allow companies to shortlist candidates for detailed technical evaluation. Minimum criteria for initial screening includes:

• Oil reservoirs should have adequate original oil-in-place (OOIP) such that the incremental production revenue offsets the costs incurred. Preliminary screening at 25,000 Mbbl provides a reasonable baseline, however, only a full reservoir assessment will reveal real recovery potential and project economics. Smaller reservoirs could be clustered together to enhance economic returns.
• Reservoir depth below 800 m to maintain the pressure and temperature required for the CO₂ to be miscible which results in greater storage potential over immiscible CO₂-EOR projects.
• Oil gravity (or density) of between 22 to 45  API with an oil viscosity of 0.4 to 6.0 cP are preferred for incremental oil production via miscible flooding with CO₂.
• Initial oil pressure must also be above the Minimum Miscibility Pressure (MMP) for the CO₂ and oil to combine into a single phase with reduced viscosity which results in greater mobility and potential recovery factors.

Based on these criteria, Alberta has a multitude of potential mature oil fields that could meet the initial screening criteria to investigate for CO₂-EOR potential. Preliminary screening identified 132 fields with significant potential based on these criteria. These fields should be advanced for further geological review. These oil fields with CO₂-EOR potential are distributed across Alberta showing regions with significant potential. In aggregate, the top 132 fields could yield an incremental of nearly 3 billion bbl of oil and sequester over 1,200 MT CO₂ (p50 estimate) if fully developed for CO₂-EOR.

These initial screening criteria can be used to estimate the EOR recovery factor range and the net CO₂ utilization factors to determine initial project feasibility. However, it is through technical evaluations that companies can determine the specific characteristics of the targeted reservoir and determine project viability, including the potential economics and revenue uplift through incremental production and optimized CO₂ utilization. The ITC improves economics for CO₂-EOR, driving competitive returns with WTI under $50/bbl.

GLJ works with our clients to characterize the reservoir and project capacity through a suite of potential studies:

• Independent Technical Due Diligence
• Site Screening & Selection
• Subsurface Characterization
• Subsurface Modeling & Simulation
• Uncertainty Analysis & Quantification
• Risk Assessment & Mitigation
• FEED Studies & Designs
• Pilot, FDP & MMV
• Economic Modelling
• Certification of Storage Space Capacity (SPE-SRMS)
• Training & Certification

With EOR becoming ITC-eligible, the path to lower emissions, higher oil recovery, and stronger project economics has never been more favorable. GLJ’s decades of EOR expertise, proprietary screening tools, and end-to-end technical capabilities position us to help companies rapidly identify viable opportunities, de-risk development, and move confidently toward FID. As the policy landscape aligns and momentum accelerates, now is the moment to integrate EOR into your decarbonization strategy. Connect with us directly to unlock the full value of CO₂-EOR.

GLJ is Canada’s premier energy consulting group. With over 50 years of experience, we help our partners make strategic decisions to ensure responsible and sustainable energy development. Our team of engineers, geoscientists and business professionals are future-thinking international leaders in traditional and emerging energy services.

We work with our clients to navigate the ever-changing energy landscape and provide the data-driven analysis required to develop tailored, sustainable business and operational strategies.