CO2 capture will help raise US oil output
London, July 31, 2012
By John Kemp
Until now, the CO2 used for recovering oil has been specially extracted from underground but the government is working to use the lure of oil extraction to encourage the capture and storage of carbon produced from power stations.
Pumping carbon dioxide into depleted fields to recover oil left behind by conventional production methods and waterflooding accounts for more than 300,000 barrels per day (bpd) of US oil output, according to a survey published earlier this year in the Oil and Gas Journal, up from 200,000 bpd in 2004.
The first commercial-scale carbon dioxide injections to support enhanced oil recovery (EOR) began at Scurry County, Texas in 1972. Since then, the US has become the largest employer of CO2-EOR technology in the world.
In 2012, CO2 injection was being used to support EOR at more than 100 projects across the US, up from around 50 in 1990 ("Miscible CO2 now eclipses steam in U.S. EOR production" Oil and Gas Journal, April 2, 2012).
Ironically, given that policymakers are worried about global warming as a result of man-made emissions, almost all the CO2 being used in EOR projects comes from natural sources.
CO2 is produced from underground formations where it occurs naturally, transported by pipeline, then pumped back into depleted oil fields to support oil extraction. There is no net benefit in terms of reduced atmospheric CO2.
Most CO2-EOR projects are concentrated in Texas, Wyoming, Louisiana and Mississippi, close to natural CO2 sources. In contrast, California's depleted oil fields mostly inject hot steam, producing around 300,000 bpd by this technique in 2012.
Shortages of CO2 from natural sources at reasonable prices have emerged as the main constraint on producing more oil by this method.
EOR through CO2 injection offers the perfect combination for policymakers concerned about the cost of curbing global warming and anxious to wean the US off dependence on foreign oil.
From an energy perspective, it promises to extend the life of existing oil fields, and help recover billions of barrels of oil that would otherwise remain "stranded", unavailable for commercial use.
Most oil fields go through three phases of production during their lifetime. During primary production, oil is produced using the natural pressure of the reservoir. In secondary production, sometimes called "improved oil recovery" (IOR), water or sometimes natural gas is pumped into the reservoir to maintain output as natural pressure falls.
But even after waterflooding, 60 percent or more of the oil originally in place (OOIP) is still typically left in the reservoir. CO2 injection (and other EOR methods) can recover an additional 5-20 percent, depending on the type of oil and the reservoir geology.
The potential for gleaning extra oil from aging fields is therefore enormous. Excluding the deepwater areas of the Gulf of Mexico, the US was originally endowed with 596 billion barrels of oil, of which 175 billion had been produced by 2008, and another 21 billion had been booked as proved reserves, according to ARI.
That still leaves 400 billion barrels "stranded" after primary and secondary recovery ("Storing CO2 with enhanced oil recovery" May 2008).
From a climate perspective, carbon capture and storage (CCS) remains an essential part of policy in the US and Europe, despite the lack of commercial projects on any significant scale to capture emissions from power plants.
CCS is crucial to ensuring the continued viability of coal-fired power generation (and to a lesser extent natural gas) while meeting CO2 reduction targets.
Coal reserves are simply too large a part of the total hydrocarbon base to write them off for climate reasons. The policy problem is especially acute in the US, which has the world's largest coal reserves, and where coal is vital to the economy of several politically contested states.
Burning coal therefore has to be made politically and environmentally acceptable, even if there is still scepticism about the seriousness of the "clean coal" mantra, which many environmental groups and policy analysts still regard as little more than clever branding campaign. The same problem applies albeit to a lesser extent to natural gas.
EOR cannot sequester all the CO2 being produced in the US each year. At most it can make a small contribution. Total US CO2 emissions from industrial sources are about 100 trillion cubic feet per year, according to NETL. So far the cumulative amount of CO2 injected under EOR programmes since 1972 is just 11 trillion cubic feet, about 10 percent of one year's CO2 emissions.
Even if CO2-EOR is scaled up massively in the next 20 years, most CO2 emissions would still have to be stored in other formations such as salt-water aquifers.
For policymakers, the real significance of CO2-EOR is its potential to act as a catalyst or "early action pathway" to overcome barriers to a wider roll out of CCS infrastructure. - Reuters
(John Kemp is a Reuters market analyst. The views expressed are his own)
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