A closed loop system for increasing yield, reducing post process pollution, reducing energy consumed during and after extraction of fuels or contaminants in formations and for sequestering of carbon dioxide C0.sub.2 from various sources is converted to a critical fluid for use as a flushing and cooling medium. Electrical energy heats a hydrocarbon rich formation resulting in the extraction of hot fluids which are fed to heat exchangers, gas/liquid separator, and steam turbine whereby oil, electric power, carbon dioxide and methane are produced for reuse in the system or for external use. Further, a method for sequestering of carbon dioxide in a formation comprises the steps of injecting CO.sub.2 into the reservoir, flushing with cool pressurized CO.sub.2 for heat removal, infiltrating with ultra-fine low density suspended catalyst particles of dry sodium hydroxide in CO.sub.2, pumping water moistened CO.sub.2 into the reservoir to activate the catalysts, binding the CO.sub.2 with reacting materials and capping the reservoir.