Enhanced Recovery Intertwines Naturaly With CO2 Sequestration

(Tech Connections Column, January 2004, American Oil and Gas Reporter)

Industry is building on decades of carbon dioxide flooding experience, and is further developing new projects while staying abreast of future carbon management opportunities.

The organizers of the annual CO2 conference in Midland, TX., expanded the program this year to include a carbon management workshop. Participants were offered a choice of two field trips to either Oxy Permian’s North Hobbs CO2 project or to Amerada Hess’s CO2 processing/recycle plant in the Seminole San Andres Unit. U.S. oil production from CO2 flooding is now over 200,000 barrels a day, with three-fourths of that coming from the Permian Basin. Several new projects have been brought on line. New emphasis is being placed on capturing CO2 from industrial sources, turning a liability for one into opportunity for another.

Investments in CO2 flooding are front-end loaded, so stable oil prices are needed. Even when the economics work, attractive projects in many areas stall because natural CO2 sources, or high purity industrial sources and delivery systems, are not available. That is where the interplay with carbon management occurs.

Capturing CO2 and pressurizing it from power plant stacks is three-four times as costly as from naturally occurring sources. Incentives can accelerate CO2 capture and subsequent use in EOR projects while technology advances. Vello Kuuskraa with Advanced Resources International Inc., presented an analysis showing how an incentive of $5 per barrel of oil produced by CO2 flooding (or $0.73 an Mcf of industrial CO2 captured) could generate an additional 1 million bbl/d of oil production. This incentive would be revenue neutral to the public.

The Department of Energy’s oil research and development program is examining incentive strategies, and would be very interested in hearing industry’s thoughts on incentives and other options that would most effectively stimulate carbon capture and EOR. Contact David Beecy at DOE’s Office of Natural Gas and Petroleum Technology (david.beecy@hq.doe.gov) if you have some information you would like to share.

The greenhouse gas/emission reduction credits (GHG/ERC) trading market is still in its formative stages, but geopolitical and business forces are moving toward agreeing on how the system should and will work. CO2 captured from man-made sources for EOR projects is a natural for ERCs. Astute CO2 flood operators are learning the “rules of the game,” and are documenting ERCs, even though there may not yet be a widely accepted market for trading them. Operators have many of the skill sets to do so, and there are recognized firms available to assist. Carbon capture and ERCs are only the frosting on the cake, though. Oil recovery will remain the primary thrust.

Future CO2 projects are influenced by lessons learned from decades of experience in the Permian Basin. Among others, common trends include more full-stream injection, especially in smaller projects; common flowlines for water and CO2 injection; decreased water-alternating-gas cycles or simultaneous water/gas injection; and less severe corrosion than originally anticipated. On the production side, controlling corrosion benefits from the passivating effect of hydrogen sulfide when H2S/CO2 ratios are above a certain level. From the processing/injection standpoint, CO2 is noncorrosive as long as it is dry. Proving that point, Kinder Morgan has hydro-tested the 32-year-old CRC Pipeline built in 1971 to transport CO2. Only one minor failure occurred. After testing, the line was rated for 2,025 psi maximum operating pressure, which established a 200 psi increase over most recent ratings. This increase translates into increased throughput and deliverability.

The CO2 conference had the expected updates on well-publicized projects, but a project by a small independent in Michigan deserves special mention. Core Energy, in a DOE Preferred Upstream Management Practices III project led by Michigan Tech University, and also involving Western Michigan University, is injecting CO2 into a couple Niagaran reefs. The initial projects are located in an area where the Antrim Shale produces natural gas containing CO2. Core takes CO2 from a gas processing plant, then compresses and transports it a few miles to the target reefs. Success in these reefs could lead to more reef projects involving CO2 capture.

CO2 sequestration and EOR are intertwined and mutually beneficial. The many projects in the Permian Basin have proven that CO2 is an efficient recovery process, and technology advances continue in sweep improvement and knowing where the CO2 is moving. Experience indicates that depleted oil reservoirs can provide safe and reliable CO2 storage. Expanded use of CO2 from high purity man-made sources, such as fertilizer plants, depends on proximity, pressure at the source, and transportation costs. CO2 capture from today’s power plants requires technology advances to lower cost, and, probably, other incentives before it becomes viable. However, when CO2 emissions become such a large concern that new power plants are designed to provide an inexpensive, high-pressure CO2 product, CO2 flooding will be widely used for carbon sequestration.