State-of-the-Art Summary

The world's first CO₂ capture and storage project actually began in 1996 in the Sleipner gas field offshore Norway. The operator (Statoil) processes the produced gas to reduce its CO₂ content from 9% to 2.5% before sale. If the extracted CO₂ were released to the atmosphere, Statoil would be required to pay a tax of about US$45 per metric ton, so the company injects the CO₂ into a regional saline aquifer via a single, highly deviated injection well. Over the past nine years the Sleipner operation has injected over 7 million metric tons of CO₂ and the operational plan is to continue to inject for another 15 years. The saline aquifer has the potential to sequester 600 billion tons of CO₂.

A more recent injection project funded by DOE (part of the core R&D program mentioned earlier) is underway in the South Liberty oil field northeast of Houston. The brine-filled injection zone in this field is a sandstone zone within the Frio formation, at a depth of about 5000 ft, on the flank of a salt dome. The site was selected due to its proximity to a large concentration of power plants, refineries and chemical manufacturing plants that emit CO₂. The Gulf Coast region emits roughly 520 million metric tons of CO₂ each year. The Frio sands in this region have been estimated to be capable of storing between 200 and 358 billion metric tons. For this project, injection of about 3000 metric tons from a nearby refinery took place over a three-week period. A number of monitoring, diagnostic and modeling activities have taken place or are underway.

Regional Strategies for CO₂-EOR
Anticipating a time when economics will support the simultaneous capture and storage of CO₂2 and the enhancement of oil production, DOE has undertaken a fresh look at the potential for enhanced oil recovery from CO2 injection in the nation's older reservoirs. Using the CO₂-PROPHET model developed by Texaco for DOE, Advanced Resources International (ARI) evaluated major reservoirs in six regions of the country: Oklahoma, onshore Gulf Coast, Illinois, onshore California, offshore Louisiana and Alaska. The model was used to determine the economic (>15% ROR BFIT) resource. For each region, the analysts evaluated alternative oil recovery strategies and scenarios. The first scenario assumed CO₂-EOR technology as applied in the past (Traditional Practices Scenario). The second scenario assumed that all of the lessons of past CO₂-EOR technology are applied using state-of-the-art technology and oil price averages $25/Bbl, but CO₂ supply costs remain high at a per MCF cost of about 5% of oil price (State-of-the-Art Scenario). The third scenario examines how the potential for CO₂-EOR could be increased through a strategy involving state tax reductions, federal tax credits, royalty relief and/or higher oil prices that would together be equivalent to a $10 per barrel lift in oil price (to $35) received by the producer (Risk Mitigation Scenario). In the fourth scenario low-cost CO₂ is assumed to be available at a per Mcf cost of about 2% of oil price (kept at $35/Bbl), from existing natural sources and industrial sources via CO₂ capture technologies (Ample Supplies of CO₂ Scenario).

The results for the four areas of interest to most independent producers (onshore lower-48 states) show that at reasonable long-term oil prices of $25-$35 per barrel, there are substantial potential recoverable reserves obtainable from CO₂-EOR if a reliable, reasonably priced source of CO₂ can be found (Table 2). Given that some believe that oil prices might move considerably higher than that range, and that up to 30% of the total resource was not evaluated, these totals could be conservative. On the other hand, the lack of existing CO₂ gathering and distribution infrastructure in these areas will make it costly to deliver CO₂ at prices in the 2 to 5% of oil price range, even if new technology lowers the cost of CO₂ capture and separation. Some sort of favorable tax treatment could help to alleviate this risk.

So, while the idea of widespread application of CO₂-EOR outside of the traditional Permian Basin area may seem farfetched, a radical change in the cost of capturing EOR-ready CO₂ or a radical shift in the value assigned to removing CO₂ from the atmosphere could change the picture. The resource remains there, waiting for the right set of circumstances.

Note: This article was prepared with input from three primary sources: The NETL Carbon Sequestration website at www.netl.doe.gov/, an article by Kamel Bennaceur (and others) in the Autumn 2004 issue of Schlumberger's Oilfield Review available at www.slb.com/, and draft copies of ARI's reports: Basin Oriented Strategies for CO₂ Enhanced Oil Recovery. These reports are expected to be published in the near future and will be available on the DOE website at www.doe.gov/.

Reprinted with permission of Gulf Publishing