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In spite of the steady growth of
projects and production, today's floods barely scratch the
surface of the potential.
A recent report prepared by Advanced Resources International (ARI) for the DOE screened the major U.S. oil producing basins and suggested that as much as 89 billion additional barrels could be recoverable with today's "state-of-the-art" technology, which presumes, among other things, sufficient volumes of CO2 available at prices comparable to today's Permian Basin prices. To even begin to access those reserves a number of drivers need to work together: new technology to capture and separate the CO2 cheaply, government tax credits for sequestration projects and emission credits for verifiable reductions. An earlier ARI report projected the potential from CO2 EOR production growing from 250 MBarrels/day today to 2,000 MBarrels/day by 2050, sequestering over 400 million tons/year of CO2.
Clearly, based on the numbers above, this convergence of oil producers and environmental interests must result in inexpensive anthropogenic CO2 being available at the field to continue the growth of this source of domestic oil. A number of other (non-EOR) options for disposing of the CO2 once it is
captured are being researched, including geological formations, terrestrial and
the deep ocean. In terms of technical feasibility and timeframe for development,
disposal into geological formations (depleted oil and gas, unmineable coal
and saline) is closest to reality. Of those options, the technology for long
term storage in oil reservoirs already has a 30± year history and will be the
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first option. The DOE estimates that oil reservoirs in the lower
onshore 48could hold 40 - 50 billion tons, gas another 80 - 100, coal 15 - 20 and deep aquifers between 5 and 500 billion tons.
Going Forward—DOE and Energy Industry
Presentations at the Midland conference by ARI, U.S. Department of Energy and a number of others drive home the fact that the technically recoverable oil using the latest CO2 flooding technologies is enormous. With reservoir characterization, monitoring, horizontal drilling and pattern modification and other state-of-the-art technologies, the 240,000 barrels/day currently being produced could increase ten-fold, given new inexpensive sources of CO2. This can only happen if the need for reducing green house gases brings (1) research to provide the technology to reduce the cost to separate, capture, transport and store CO2, (2) financial markets emerge to monetize the value of verifiable emission reductions and (3) federal and state governments reduction of the risk of these large projects with changes in the investment tax credits, federal royalties and state severance taxes.
David Hyman, Project Manager with the Department of Energy,
presented the very ambitious DOE Carbon Sequestration Program, mostly carried
out by the regional partnerships mentioned above. Spending for these projects
was $46 million in FY 2005 with over 60% going to research on the capture and
sequestration of CO2. Spending in FY06 is expected to grow by 50%.
The timeline for this activity, beginning in
2003 to 2012 is in |
phases beginning with geologic
sink opportunities, permitting and regulatory, measurement and
monitoring verification protocols and capture technologies,
through deployment. Clearly, the study of sequestration in
geologic formations builds on a strong industry experience
base and the current activity is focused on active and
depleted oil and gas reservoirs and, to a lesser degree, deep
brine-bearing formations. Future research will expand that
knowledge base to deep, unmineable coal seams and shales.
A cornerstone of the program is
the FutureGen project. (www.f
ossil.energy.gov/ news/techlines/
2005/tl_futuregen_signing
.html) This
objective of this $1 billion project is to design, construct
and operate a 275 Megawatt plant to produce electricity,
hydrogen and over a million tons per year of CO2
with near zero emissions. This Integrated Gasification
Combined Cycle (IGCC) project will utilize a variety of fuels
including coal and lignite. The CO2 will be
sequestered in a geologic formation, oil, gas or saline. On
December 6, 2005 the DOE signed an agreement with the
FutureGen Industrial Alliance to build the plant. The Alliance
is made up of eight large coal utilities and developers and
will contribute $250 million of the cost. They plan to issue a
site selection solicitation in March, with proposals due by
May 2006, to develop a short list. Final site selection is
anticipated by Fall 2007. A number of regional consortiums,
including FutureGen Texas, have solicited local proposals in anticipation of the solicitation.
The phrase "tipping point" was used by several speakers at the conference. It was the consensus of the speakers and audience that the convergence of the nation's need for more domestic oil and the economic benefits of that, the maturing of the technology to extract oil left behind with improved recovery techniques, especially CO2, the growing concern over the growth of greenhouse gas, the government's investment in methods of removing and permanently storing these gases and the emerging financial markets for the verifiable reduction are all coming together today for a true win-win outcome. So maybe the curse can indeed become a blessing. |
State-of-the-Art
Summary