Enhanced oil recovery may offer climate solution: Fuel for Thought
As counterintuitive as it may sound to those who want to transition away from fossil energy to combat climate change, the US government has long supported research into technology that could potentially slow or even halt the growth of industrial carbon emissions while expanding the recovery of oil from existing fields.
Many in the oil industry support the concept—and have been implementing commercial projects based on it for decades, in the US and abroad.
In using this technology to enhance the recovery of oil (EOR), the oil industry has developed an extensive know-how for capturing, permanently storing, and monitoring carbon dioxide (CO2).
Additionally, a US government-backed research initiative has identified scores of underground receptacles nationwide that have the collective capacity for permanently storing, or sequestering massive volumes of CO2 captured from industrial sources—better known as carbon capture and storage (CCS).
The question arises anew because of shifting political winds in Washington. The administration of President Donald Trump is a strong advocate of fossil energy and wants to see more production of oil and natural gas and coal—rather than accelerating the nation’s transition away from these fuels and to renewable energy sources. Meanwhile, pressure continues to mount worldwide for the US to resume a leadership role in curbing greenhouse gas emissions in order to tackle climate change.
In a sign of changing US priorities, a two-year federal budget approved by Congress early Friday includes an expanded tax credit for enhanced oil recovery, a measure pushed by top Permian oil producer Occidental Petroleum and governors of six oil- and gas-producing states including North Dakota and Oklahoma.
The new incentive offers credits worth $35/mt of CO2 used in EOR, up from $10/mt. The existing program had a cap of 75 million mt that was on track to max out in the first half of this year, according to ClearView Energy Partners.
CO2 EOR Flooding
EOR has proven a key arrow in the industry’s quiver of solutions for maximizing the recovery of oil resources from sub-surface rock formations by overcoming the barriers posed by the physics of fluid flow.
There are three stages of recovery: primary (natural lift, subsurface pumps), secondary (flooding the reservoir with water or repressurizing it with associated natural gas) and tertiary, aka EOR.
These stages represent levels of resource recovery ranging from 5% to 60%—which means that, in most cases, more than half the oil remains unrecovered in the reservoir.
EOR methods include the injection of chemicals, gases, or thermal energy into an oil reservoir to alter the subsurface rock physics so as to enhance the flow of oil to the wellbore.
By far the most widespread and prolific form of EOR is carbon dioxide flooding, or CO2 EOR.
The US Department of Energy’s National Energy Technology Laboratory (NETL) has estimated that the volume of residual discovered oil left behind—and thus a target for EOR—totals more than 400 billion barrels.
For perspective, BP’s Statistical Review of World Energy estimated US proved reserves of oil in 2016 totaled 48 billion barrels.
The US oil industry as of 2014 was injecting 3.5 Bcf/d of CO2 from natural and industrial sources to help produce 300,000 b/d of oil from 136 CO2 EOR projects, according to Vello Kuuskraa, president of Advanced Resources International Inc. of Arlington, Virginia. Kuuskraa then predicted that CO2 EOR oil production would increase to 638,000 b/d by 2020 with the availability of new CO2 supply sources.
What has stymied further growth in CO2 EOR is the lack of adequate, reliable supply of economic sources of the gas, according to ARI.
In a 2010 study ARI conducted for the Natural Resources Defense Council, most of the CO2 used for EOR comes from natural CO2 reservoirs,
which are limited in capacity and distant from markets other than the Permian Basin.
ARI recently noted that, even with increased access to naturally sourced CO2 by operators such as Denbury Resources, those sources remain inadequate relative to potential demand for CO2 by EOR.
“Thus, an attractive market exists for CO2 emissions captured from industrial sources and power plants for expanding domestic oil production through the application of CO2 EOR,” ARI concluded in the study.
Of course, with current CO2 EOR floods, the costly gas is recycled for multiple injection courses and can be considered permanently sequestered only after the targeted reservoir has been depleted of economically recoverable oil.
But some projects were designed for CCS as much as they were for CO2 EOR.
A prominent example is the Weyburn-Midale CO2 project in Saskatchewan, Canada, in which CO2 was injected into two adjacent oil fields for EOR, and the subsurface behavior of the CO2 was monitored from 2000–2011 by a large group of institutions led by the International Energy Agency.
The CO2 was sourced from the Great Plains Synfuels Plant at Beulah, North Dakota. The synthetic fuels plant is described by the Basin Electric Power Cooperative subsidiary that operates it as the only commercial-scale coal gasification plant in the US that manufactures natural gas and as the world’s largest CCS project.
Apart from recovering an incremental 160 million barrels of oil as a result of the CO2 EOR flood, the project is expected to permanently sequester about 40 million metric tons of CO2.
The Big Picture
For all of its potential for sequestering CO2 industrial emissions and recovering large volumes of incremental oil, the hard truth is that CO2 EOR has a limited capacity for absorbing the mammoth volumes of North America’s total CO2 emissions, according to NETL.
However, the US DOE, Natural Resources Canada, and Mexico’s Energy Ministry issued a report in 2012 that North America has enough subsurface capacity combined in depleted oil and gas fields, uneconomic coal seams, and deep saline aquifers to store all of the continent’s CO2 emissions for 600 years.
With that potential in mind, DOE in 2003 awarded cooperative agreements to seven Regional Carbon Sequestration Partnerships, which are tasked to determine the best geologic storage approaches and apply technologies to safely and permanently store CO2 for their specific regions.
In short, there is enormous potential for CCS to help meet the challenge of climate change.
Bob Williams, Director of Content, Platts RigData