State-of-the-Art Summary

Carbon Dioxide: Curse or Blessing?
by Dwight Rychel, P.E., Petroleum Technology Transfer Council

The answer to that question very much depends on who you ask. And increasingly, the person being asked will have a strong opinion. For two centuries or more, scientists have been measuring an increasing level of carbon dioxide (CO₂) in the atmosphere, beginning in the 19th century as industrial nations began burning increasing amounts of carbon-based fuel. There are indications of temperature increases, but there is vigorous debate within the scientific community whether this is global warming due to CO₂ or due to cycles as observed in geologic time. In the same time frame, petroleum engineers and geoscientists have been advancing and developing the technology to use CO₂ from natural sources, such as the geological domes in the southwest to squeeze up to 20% more oil out of mature water-flooded reservoirs. These CO₂ floods are now contributing over 4% of the domestic oil supply. Environmentalists and oil companies have a long history of conflicting interests and it's no small irony that the technology developed by the oil companies is viewed as one of the front-line means of reducing the growth of greenhouse gases. This technology, the long-term sequestration of CO₂ in geological formations, has brought about an alignment of oil company and environmental interests. This article will look at recent events and research efforts in CO₂-enhanced oil recovery (EOR), sequestration, where the CO₂ comes from, how it can be reduced and what role the U.S. and other governments are playing.

This new partnership was very evident at the 11th Annual CO₂ Flooding Conference and Carbon Management Workshop held in Midland, Texas, December 6 - 9. (Go to www.spe-pb.org for agendas and presentation downloads). This conference has grown from a local operations meeting, spawned by the DOE Reservoir Class field demonstration program among the Permian Basin operators, to a global workshop on CO₂ flooding technology and carbon management. The December meeting attracted over 400 people from 10 countries and 20 states and represented 135 different companies, laboratories and government agencies. Speakers and attendees included, as one would expect, engineers and scientists, but also lawyers,

Peter Fusaro of Global Change Associates and Michael Moore of CO₂ Global commented on the growing market for the trading of GHG credits, similar to the U.S. markets for NO_x and SO_x. This activity is taking place within the Kyoto countries and does not yet include credits for CO₂ EOR. However, trading between Kyoto and non-Kyoto countries is emerging but it is very thin and illiquid. The market farthest along is the European Union Emissions Trading Scheme (EU ETS) which commenced on January 1, 2005. The scheme will work on a "Cap and Trade" basis, with EU member state governments setting the cap for all installations. Early trades for current periods have been in the €30/ton range ($35.90 US at today's conversion). Forecasts for EU ETS range from $20 to $50/ton and are expected to settle around $30/ton. This would suggest that if an operator can capture and sequester an emitted MCF of CO₂, they could receive a credit of just under $2 when the protocols are finalized and the markets mature.

Figure 1:  Anthropogenic CO2 Sources, Courtesy Melzer Consulting