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  • Lee Pence, SeaVar

CO2 for Enhanced Oil Recovery


For several decades, CO2 has been used in extracting crude oil from depleted oil wells in the United States. When a newly drilled well is placed in service, subsurface pressure forces the oil, together with gas and water, to the surface. But this pressure dissipates in time, requiring pumps to continue oil extraction. Eventually, as much as 60 percent or more of the original oil in place (OOIP) remains in the reservoir, and water flooding replaces pumping to push the oil towards producing wells. In most cases, water flooding becomes ineffective when the reservoir oil levels drop to about 50 percent of the OOIP. At this point, supercritical CO2 is injected to recover a portion of the remaining oil in the reservoir. This process is referred to as CO2 enhanced oil recovery (EOR).

How effective is EOR?

An example of the effectiveness of EOR is the Shell Oil Denver Unit in the Wasson Field in West Texas, with primary production from 1938 to 1965, when reservoir pressure was depleted to the point where water flooding was required. This was replaced with CO2 EOR in 1983, which resulted in producing over 120 million incremental barrels of oil through 2008. Of the approximately 31,500 barrels per day produced in 2012 in the Denver Unit, 26,850 barrels per day were attributable to CO2 EOR.

Availability of CO2

Early success in 1970s and 1980s with CO2 injection for EOR led to the construction of major CO2 pipelines in the United States. The three most prominent of these connected the Permian Basin fields in West Texas and others in Southeastern New Mexico with natural underground CO2 reservoirs located at the McElmo Dome and Sheep Mountain sites in Colorado and the Bravo Dome site in northeastern New Mexico. In the recent past, over 1.6 billion cubic feet per day of naturally occurring CO2 has been injected in wells in the Permian Basin alone.

But the cost of the CO2 transmission and distribution infrastructure required to transport naturally occurring CO2 to faraway oil fields has been significant. This fact led to the development of methods to capture anthropogenic (man- made) CO2 from industrial sources located closer to the oil fields for use in EOR. And because CO2 used in EOR operations remains permanently stored in underground formations, using anthropogenic CO2 in EOR provides a method for sequestration of a greenhouse gas.

FAQ

A few selected questions are addressed below.

Will the CO2 injected in the well be released after producing oil?

No. Because of the high cost of CO2 used in EOR, well operators capture any CO2 brought to the surface with the oil and re- inject it into the well.

Will the CO2 injected into the well eventually leak into the atmosphere, negating the whole idea of sequestration?

Experts have determined that the rock formations in these EOR fields will retain over 99 percent of the CO2 injected into the well for more than 1,000 years. Given the significant expenditures involved in CO2 injection over the decades of operating a well, it is the investment community that has the most interest in the eventual destination of the CO2 used.

What incentives are available for capturing anthropogenic (man- made) CO2 for use in EOR?

This is a key economic driver, whose value cannot be ignored. In 2018, The FUTURE Act became law. Known in the industry as 45Q, it provides very attractive tax credits for the capture and use of anthropogenic sourced CO2, including in EOR. These are dollar for dollar credits, not deductions, and represent a sea change in the economics of CO2 capture. More information on 45Q is presented in a following blog.


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