The project has been designed to encourage oil companies to pump the greenhouse gas into the oilfields to increase the underground pressure, forcing the oil upwards and making it easier to recover.
The Weyburn CO2 Storage and Monitoring Project is a multinational effort led by Canada's Petroleum Technology Research Centre in Saskatchewan and the Weyburn oilfield operator, Calgary-based EnCana Corporation.
The project receives funding from the US Department of Energy, as well as industry and government organisations in Canada, Japan, and the European Commission.
The Department of Energy said that if the methodology used in the Weyburn Project could be successfully applied to oilfields throughout the world, between one-third and one-half of CO2 emissions could be eliminated within 100 years.
The sweetener for industry would be increased rates of recovery and the potential to extend the working life of oilfields nearing depletion that might otherwise be too costly to operate.
Similar oilfield pressurisation techniques using water or gas are common in the oil industry, but the CO2 sequestration is different in that for the project to be deemed completely successful, it will have to demonstrate that the "trapped" CO2 is not able to escape the oilfield's reservoir.
The Department of Energy's announcement on Tuesday marked the successful completion of Phase I of the Weyburn Project.
Phase I aimed to demonstrate the technical and economic feasibility of carbon sequestration, which is intended to permanently capture the CO2 in geologic formations.
During Phase I of the Weyburn Project, CO2 was piped into the oilfield from the Great Plains Synfuels Plant in North Dakota, where it is created as a by product of the plant's coal gasification process.
Using an industrial source of CO2 sequesters greenhouse emissions that would normally be vented into the atmosphere.
The CO2 sequestration project is said to have increased the Weyburn field's oil production by an additional 10,000 barrels per day.
Scientists working on the project have said the knowledge gained from the Weyburn Project will ensure the oilfield's viability for another 20 years, producing an additional 130 million barrels of oil, and sequestering up to 30 million tons of carbon dioxide.
"The success of the Weyburn Project could have incredible implications for reducing CO2 emissions and increasing America's oil production," said DoE secretary Samuel Bodman.
"Just by applying this technique to the oil fields of Western Canada we would see billions of additional barrels of oil and a reduction in CO2 emissions equivalent to pulling more than 200 million cars off the road for a year," Bodman said.
"The Weyburn Project will provide policymakers, the energy industry, and the general public with reliable information about industrial carbon sequestration and enhanced oil recovery."
The Weyburn Project will now move into Phase II, where researchers will compile a best practices manual to serve as an industrial reference in the design and implementation of CO2 sequestration in conjunction with enhanced oil recovery projects.
They will also expand their efforts to the neighbouring Midale Unit, develop more rigorous risk-assessment modelling techniques, improve injection efficiencies, and monitor CO2 flooding and storage with a variety of methods, including seismic wave technologies and geochemical surveys.
