Carbon dioxide captured at Colorado coal plants could boost waning oil fields in Texas, if Colorado Springs’ Neumann Systems Group proves it can economically pull the gas from smokestacks.

Colorado Springs Utilities already plans to use Neumann's NeuStream system to remove sulfur dioxide emissions at its Martin Drake Power Plant, although installation of the system is in a slowdown while the community debates the future of the downtown coal plant. And, earlier this month, Neumann announced a new push to extract rare earth metals from coal ash.

Capturing carbon dioxide, however, could be a whole new ball game for the company.

Carbon dioxide is the chief greenhouse gas linked to global warming. At the same time, it can aid in the retrieval of crude oil from oil fields in a process known as EOR, or enhanced oil recovery. Although regulations to limit emissions of carbon dioxide because of its effect on climate change have yet to gain traction, Neumann believes it can capture the gas at local power plants and use an existing pipeline to ship the gas to Texas to be injected into depleted oil fields, allowing more oil to be recovered.

“The question is, is it going to be regulations-driven, or is it going to be profit-driven?” said Andy Awtry, a principal scientist with Neumann. “With the potential for EOR (enhanced oil recovery) to use the CO2 to make money in the oil fields, there’s a new reason to get CO2 and now we’ve got another partner.”

Pumping the gas into oil fields can permanently bury carbon dioxide, so the process would kill two birds with one stone, said Rob Fredell, Neumann’s vice president for business development.

“That’s the big market for this,” Fredell said. “Everybody talks about, ‘We’ve got to sequester this (carbon dioxide),’ well you get a twofer with EOR.”

Neumann announced Friday that its initial, small-scale testing with the University of North Dakota’s Energy and Environmental Research Center showed the process has the potential to operate more efficiently and deliver lower costs than competing systems.

Neumann won a $9 million Department of Energy grant last year to advance the technology with a larger test unit. That project will continue into 2014 and then Neumann will compete for an additional grant to build a commercial-scale system.

Neumann’s eventual goal would be to connect coal plants in Colorado Springs and Pueblo to a carbon dioxide pipeline that now ships carbon dioxide from naturally occurring deposits in Huerfano County to oil fields in the Permian Basin in west Texas. The Huerfano County deposits are themselves becoming depleted, so there’s a large financial incentive to find another carbon dioxide source to supply the pipeline, Fredell said.

He said the company believes carbon capture can be profitable if it can produce it for less than $40 a ton and Neumann believes it’s system can produce carbon dioxide for $30 a ton.