It is said that carbon dioxide atmospheric content may triple by the end of the 21st century, should major carbon emissions continue at their current rate – and that is frightening, expensive, and perhaps catastrophic.
With respect to carbon sequestration, a major sink is geologic in nature, and enhanced oil recovery (EOR) happens to sequester significant sums of CO2; along with increased oil production – so needed more than ever. A particularly large sector for crude CO2 usage as a liquid product is the EOR sector, by volume, compared to single volume supply to typical merchant consumers, such as food and beverage customers.
Today, due to pressure from environmental sectors wishing to reduce CO2 greenhouse gas emissions (coupled with a strong need to produce more oil domestically), EOR and more creative means of producing oil and gas in general are very much in fashion. This big push to produce more oil via EOR is a reality, and for the (natural) gas sector, this is evidenced by all the shale formation sources which are now being developed for more gas production, and horizontal drilling.
In terms of natural gas applications for CO2, much of this is called ‘frac’ as an application in natural gas production. This sector has shown huge promise from a volume perspective as well, where single jobs for frac service can range, for example, from two tons to 2,000 tons – above and below these values as well. When the volume is particularly large, significant portable storage or large stationary vessels are brought in to serve these locations with sufficient volume on-site.
The same can apply to EOR projects, in terms of on-site storage, depending upon mode of supply, duration and size of the job. In both cases, this ‘down hole’ application requires immense pressures to achieve the goals sought, thus compression equipment on-site. If the liquid is delivered to an EOR project, which is always a long-term venture, compressor stations may also play a role throughout the length of the pipeline.
Carbon dioxide in action
The physical application of CO2 in EOR jobs exists in places such as the Jackson Dome in Mississippi, which is primarily operated by Denbury Resources, a Dallas-area oil firm owning the majority of the massive CO2 reserves in the Dome.
The company is pursuing the ongoing purchase of regional oilfields for delivery of the CO2 from the dome, via pipeline. Long-term plans appear to be to continue EOR from this source indefinitely.
Encana and Apache are two oil firms which show great success with EOR projects in Saskatchewan, supplied by pipeline from the Dakota Gasification Company in North Dakota. The Canadian government and provincial authorities are enthusiastic about the success for carbon offsets due to this EOR job, as well as economic gain due to more production of oil.
Today, the opportunity for EOR is particularly important, with the sky-high prices for oil – coupled by dire needs to address carbon offsets and greenhouse gases in general. States in the US and other world markets are now evaluating CO2 floods (another common term in EOR) for regions which are oil producing regions, sometimes where old, mature and often water-flooded fields are prime for secondary or tertiary CO2 floods. The water flood would be a primary flood, in such a case.
The actual physical application of CO2 would be modelled and built upon the success of a pilot flood; using specific geological and physical data, to drive out the most oil possible from a field using this solvent. The carbon dioxide has many benefits in the process, which of course is under significant pressure (2,000 psig and beyond), often performing in a ‘sweeping action’ – also reducing the oil’s viscosity, increasing permeability of the rocks and formations, reducing swelling of clays, and dissolving certain carbonates.
Long-term, it is a ‘win-win’ situation for CO2, more today than ever before, since oil production is ever important with high prices and scarce supplies; and carbon sequestration is an essential goal everywhere.
We are in a fossil fuel-based economy for a long time to come and, incrementally, biofuels and other renewable fuels will help replace fossil fuels over time. For the time being, it is essential to squeeze out what is possible from so many otherwise depleted fields.
These long-term EOR projects often operate for decades and require a substantial investment in the infrastructure, well beyond the injection and producing wells. This typically includes a recycling plant to continue the recovery and re-injection of CO2. The recycling plant would represent a loop system; continuously feeding additional CO2 from the pipeline, and re-injecting and feeding source product.
As for frac service, this application for CO2 generally is performed by the oilfield service companies which operate the compression, with or without other agents, including water, polymers, and the CO2 of course. The service companies often schedule and handle the jobs, which are ordered by their customer – the oil and gas firms.
Frac jobs can often run from a couple of tons up to and beyond 1,000 tons at a time, which can run into days or even weeks to complete. However, frac work is performed and concluded in a relatively short period of time – compared with long-term merchant sales of product to a food plant, for example.
A mention of enhanced coal bed methane, or eCBM as it is known, is something which can be a growth market, however this form of sequestration and enhanced recovery of natural gas is more challenging than the frac business. Much more work is needed to really further this technology; though it is a wonderful way to achieve increased natural gas production and sequester carbon.
Some experts see today’s high oil prices as cyclical and likely to return to more reasonable levels.
On the other hand, it seems maybe 15 years ago, when it was difficult to have cheap oil reach $30-35/barrel, compared to today at about $105/barrel, the producers which I worked for as a consultant said they needed prices into the mid $30 per barrel of oil to make the economics favorable for EOR.
Today we are at truly high levels, and perhaps this will increase even more into the hot summer months, but hopefully will decline again. Oil prices, in any event, are at a point (and will be at a point in the long-term) which should precipitate viable economics for the capital investment and returns necessary to make many EOR projects economically viable – assuming all other physical data work for the project in question.
Long-term, both EOR and CBM will continue to be excellent forms of carbon sequestration – and as the pressure mounts for America’s energy independence and a need to reduce & sequester carbon emissions, these applications will only grow. The same applies to all regions of the globe where scarce oil is such a valuable commodity; along with the need to sequester carbon.
Over the decades, with my work in the merchant trade and as a consultant, frac has been a market which has expanded and contracted, according to natural gas requirements and selling prices, However, the application will always be around and will gain greater favour, as the economics and demands for natural gas strengthen.