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ARI: Carbon capture could boost EOR projects

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, Mar. 11 -- US climate legislation, if enacted, potentially could lead to large volumes of captured carbon dioxide from power plants and other industrial sources, consequently accelerating enhanced oil recovery and boosting oil production, said a report by Advanced Resources International (ARI) of Arlington, Va.

The report, released on Mar. 10, said carbon capture stemming from proposed climate legislation could boost US oil production by 3-3.6 million b/d by 2030, assuming all the captured CO2 were to be used for EOR.

Any resulting reduction in US imported crude oil volumes would depend upon how much captured CO2 goes into EOR projects, ARI said, which prepared the report for the Natural Resources Defense Council.

Mike Godec, ARI vice-president and author of the report, said captured CO2 could provide “an important piece of the puzzle for reducing our dependence on foreign oil and cutting carbon emissions.”

EOR could contribute to greater energy independence, help boost the US economy, and help reduce CO2 emissions by an estimated 410-530 million tonnes/year in 2030, Godec told reporters during a conference call.
States likely to receive the most benefit from increased EOR projects include Arkansas, California, Indiana, Illinois, Kansas, Louisiana, Montana, New Mexico, North Dakota, Oklahoma, Texas, and Wyoming, the report said.

Industry response
Tracy Evans, president of Denbury Resources Inc., said the largest deterrent to expanding production from CO2-EOR is the lack of large volumes of reliable, affordable CO2. Godec said large CO2 supplies are unlikely to be available without federal climate legislation.

Denbury owns CO2 reserves in Mississippi. Most CO2 for EOR today comes from natural reservoirs, which are limited in capacity, Godec said.

Evans noted that additional pipelines would have to be built to deliver the captured CO2 from power plants into areas having oil fields with EOR potential. Denbury already has more than 500 miles of CO2 pipeline and is building another 320-mile pipeline, he said.

Godec said most power plants likely to be equipped with carbon capture and storage technology are within 700 miles of oil basins having EOR potential.

“The transport network necessary to serve a CCS-oriented marketplace would be much less complicated than the current network utilized for natural gas,” Godec said in the report.

Given an oil price of $70/bbl on the New York Mercantile Exchange and delivered CO2 cost of $15/tonne, Godec estimated that more than 38 billion bbl would be economically recoverable in the Lower 48 states.

In the US, CO2 injection has accounted for recovering about 1.5 billion bbl of oil and US CO2 sales for EOR reached an estimated 3 bcfd in 2008 (OGJ, Dec. 7, 2009, p. 41).

Contact Paula Dittrick at paulad@ogjonline.com.


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