NEW YORK (TheStreet) -- Despite its new solar and wind partnerships, the Blackstone Group (BX) - Get Report , one of the world's top investment firms, quietly announced last week a $700 million investment in carbon dioxide-enhanced oil recovery, or CO2 EOR, the use of carbon dioxide to stimulate production in older oil wells. That could indicate Blackstone believes domestic government support for CO2 EOR to be just around the corner. That development could bode especially well for Denbury Resources (DNR) - Get Report , the only true pure play in the space.

The investment takes the form of an equity commitment to the oddly namedWindy Cove, a group of mostly former Kinder Morgan (KMI) - Get Report executives founded in 2014 to promote CO2-enhanced oil recovery projects throughout the U.S.

Efficiency is the modern-day battle-cry for exploration and production players, and according to the DOE, the CO2 EOR extraction technique is attracting the most market interest. Although its is hard to get current CO2 EOR projections, analysis from the U.S. Chamber of Commerce suggests this tertiary extraction method can boost production from 350,000 barrels of U.S. oil per day to 4 million bopd for 50 years. To put that figure into context, that is nearly a full million "more" barrels a day than presently produced by the country of Iraq, the second largest OPEC producer behind the Saudis.

CO2 EOR is really a story about doing more with less -- in this case, producing more oil from existing oil wells. Thanks to continued advances in technology, big data sets and experts' understanding of rock formation, some estimate additional recovery totaling more than 20% of the original found oil could be possible within the same land footprint. Such estimates are possible assuming policies are put into place that do not inhibit growth of CO2 EOR through inappropriate carbon storage classifications.

Long-term carbon sequestration offers a bonus for the environment, taking captured, man-made carbon dioxide and pumping it into the depleted reservoirs. The majority of the carbon used to increase the flow of oil during CO2 EOR phase remains permanently in the ground.

This is not a new concept. In fact, it's been monitored over the past 40 years with no known environmental concerns after 800 million-plus tons of injected CO2 across the country.

But let's be clear, the end goal of CO2 EOR is a higher amount of oil production, not carbon storage. However, if the process of boosting recovery rates prevents man-made carbon from entering the atmosphere and contributing to global warming, that's one more good reason to support the technique. 

From a financial standpoint, the use of next generation CO2 EOR helps the economics of many wells that previously couldn't continue oil production. More production equals more jobs to create and maintain that production, including new pipelines and cost-effective man-made carbon capture systems to boost CO2 supplies vital to CO2 EOR. According to Advanced Resources International, "increased production from CO2 EOR could create 375,000 jobs by 2030."

Exploring further CO2 EOR advancement will likely turn investors on to Denbury, a company with an attractive dividend, a smart hedging program, and a strong production growth profile. The company, which owns its own pipelines, has repurchased nearly $1 billion of Denbury stock since the third quarter of 2011 at an average price of $15.68, or roughly 22% "above" current levels.

I'm all for renewable energy, but fossil fuels will likely play a vital role in our energy supply chain for the foreseeable future. Clearly, Blackstone's investment in Windy Cove proves it agrees.

At the time of publication, Denbury Resources was a client of the author's consulting firm, Blue Phoenix.

Follow @bluephoenixinc

This article is commentary from an outside contributor and separate from TheStreet's new coverage.

TheStreet Ratings team rates DENBURY RESOURCES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate DENBURY RESOURCES INC (DNR) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."

You can view the full analysis from the report here: DNR Ratings Report