June 21 Two-thirds of all the oil ever discovered would never have seen the light of day if it were not for enhanced recovery methods, which usually involve injecting steam or carbon dioxide into wells to force up the liquids.
But the process, which can cost about $13.50 per recovered barrel, is not cheap.
A far cheaper option, according to Glori Energy Inc Chief Executive Stuart Page, lies right under the feet of the drillers in the humble microbes that inhabit oil reservoirs.
Glori and rival Titan Oil Recovery Inc specialize in microbial enhanced oil recovery, a process that involves injecting the reservoir with nutrients that make the microbes grow quickly so they break down the oil into small droplets that can flow more easily to the surface.
"Because it needs no additional infrastructure or drilling or any other support, it is very cheap from a capital expenditure and operating expenses perspective," Page said in an interview.
Glori, which plans to go public, has high-profile backers in General Electric Co and ConocoPhillips Co, but it seems Big Oil has yet to be persuaded to think small.
Microbial enhanced oil recovery (EOR), while in use for half a century, still commands less than 1 percent of the $63 billion EOR market.
Now, the spotlight is back on new EOR methods as relatively high crude prices, and the high cost to explore and develop new resources, prompt companies to try to extract oil from mature fields that they once would have give up on.
"We are potentially at an inflection point," said Raymond James analyst Andrew Coleman.
The biggest barrier is convincing oil companies to try something new when tried and true methods more or less guarantee success, analysts say. It can take up to a year or more to complete an EOR cycle, from planning to production. That is time that companies don't want to gamble away by testing new methods.
"The biggest barrier for microbial EOR is to convince operators that it will work in the way it is modeled to work and for the cost that it is modeled at," said Glen Murrell, a research scientist at University of Wyoming's Enhanced Oil Recovery Institute.
The stakes are huge. Industrial and energy market research publisher SBI Energy expects the EOR market to grow at an average rate of 67 percent annually in the next few years, totaling $1.3 trillion in 2015. Gas and steam injection account for about 97 percent of the market.
Microbial EOR costs are between $6 and $10 per incremental barrel of oil, said Brian Marcotte, a director at Titan Oil Recovery. This means that at a time when drilling costs are rising, using the microbial EOR method instead of carbon dioxide injection can save companies up to $7 per barrel.
"We believe the (microbial EOR) market is gigantic," said Larry Aschebrook, chief executive of Gentry Financial Corp, which invests in small to medium entrepreneurial businesses.
"As far as Glori goes, we believe it will be a multi-billion dollar company in the foreseeable future," said Aschebrook, whose firm led Glori's latest financing round, raising about $20 million.
Major oil companies, including ConocoPhillips, are more reserved in their assessment.
"We are investing in technologies that we hope we can successfully apply to our business in the future," said a ConocoPhillips spokesman.
Glori filed with U.S. regulators in October to raise up to $115 million in an initial public offering of its common stock.
The company, which is also backed by NRG Energy Inc, said in its preliminary prospectus that apart from ConocoPhillips its customers include Cenovus Energy Inc , Plains Exploration and Production Co and Denbury Resources Inc.
"Our focus and our core business is CO2-enhanced oil recovery," said Denbury spokesman Jack Collins. "We look at a lot of different things and talk to different folks. The CO2 process is a proven process."
About half of Denbury's total production comes from CO2 injection.
General Electric, however, is optimistic.
"Microbial EOR has a very good chance of being the lowest cost compared to other technologies," said Kevin Skillern, managing director of Venture Capital at GE Energy Financial Services.
Titan's Marcotte has a theory about why the adoption rate of microbial EOR has been slower. He says oil companies more cautious about adopting the technology than he had anticipated.
The companies' wells, he said, "are like children to a family - the most valued possession."