BrightSource Energy, a VC-funded concentrated solar power (CSP) developer, is in the midst of building the massive Ivanpah solar power tower facility, which could eventually produce up to one gigawatt of electrical power.

But the first commercial project they've completed produces steam for enhanced oil recovery (EOR) -- not steam to produce electricity. The facility, a Chevron site in Coalinga, California, commenced operation today.

According to a report by SBI, standard oil recovery can extract 10 percent to 30 percent of the potential oil from any given reservoir, leaving the majority of the oil in the ground.

Enhanced oil recovery sends a liquid or gas (in this case, steam) into an oil reservoir, thereby lowering the oil's viscosity and allowing more oil to be pumped out. The global market for EOR, according to SBI, is estimated at nearly $62.5 billion (for barrels of crude oil) for 2009. BCC Research estimates the global market for EOR technologies as $4.7 billion in 2009, due to grow to $16.3 billion in 2014.

EOR using CO2 is also being considered as a method to sequester carbon in the ground.

Chevron’s Coalinga field started pumping in the 1890s and, like many of the world's oil fields, is experiencing a decline in oil production. EOR can reverse this trend. The steam used at the Coalinga field and most EOR sites is usually generated by burning natural gas in a gas-fired steam generator. Typical sizes for those generators units are 23 MMBTU/hr or 62.5 MMBTU/hr -- and they are used in large numbers.

So although this is a relatively small-scale project, it proves the concept at scale and does so without the prospect of future fuel costs. Solar EOR doesn't exactly save the planet, but it can increase domestic oil production and keep jobs in the U.S.

The Coalinga site sits on 100 acres and uses 3,822 heliostats that are focused on a boiler sitting on top of a 327-foot-tall solar tower.

According to BrightSource's S-1 form, filed in anticipation of their IPO, most of the firm's early revenue has come from the Coalinga project. BrightSource signed a contract with Chevron in 2008 to develop the facility. The S-1 also states that, "The Coalinga Solar-to-Steam for EOR project was entered into at a loss and as such the Company initially recognized a provision for loss on contract in the amount of $10.5 million as a component of costs of sales."

Tags: brightsource, brightsource energy, bse, chevron, enhanced oil recovery, eor, solar to steam