Merits of Carbon Capture and EOR

Energy pricing continues to be a volatile variable in the global economy. Oil & natural gas businesses and enterprises face increasing pressure to reduce production costs while meeting rising production targets, all in the face of an uncertain market. Rising commodity prices and increased cost of doing business are also prevalent and hence the need to maximize available resources. There is a shortage of expert personnel, materials and equipment and challenges due to environmental challenges along with complexity of operational processes and the need for updating the oil & natural gas industry to latest regulations. At the same time, organizations must comply with the highest safety, environmental and health standards. There is a major inability to make critical and timely decisions due to lack of a centralized system that holds vital asset and operational data. There is lack of common information format throughout the life cycle of both existing and greenfield oil & natural gas assets covering development-execution-operations value chain.

Typically, exploration and production (E&P) for both onshore and offshore hydrocarbons yields water, crude oil and natural gas. Current E&P utilizes three recovery methods; 1) Primary recovery via natural methods such as reservoir pressure, artificial lift such as pumps, etc. yielding an additional 10% of original oil-in-place; 2) Secondary recovery occurs via re-injection of produced water and natural gas yielding an additional 20-40% of original oil-in-place and; 3) Tertiary recovery consisting of state-of-the-art Enhanced Oil Recovery (EOR) methods such as thermal/steam, microbes, chemicals, CO₂ and nitrogen, is now recognized as a potential way of improving production and dealing with greenhouse gas (GHG) emissions yielding an additional 30-60% of original oil-in-place. It has been noted by the U.S. Department of Energy (USDOE) that many tertiary EOR methods are subject to prevailing capital costs (CAPEX), operating costs (OPEX), as well as effective recovery yields of original oil-in-place. The capture of CO₂ from combustion in power generation and other industrial uses, supplied via CO₂ gas gathering pipeline infrastructure, is the subject of other research and development programs sponsored thus far by USDOE. As early as 2005, the USDOE acknowledged and judged that next generation CO₂-EOR technologies to be a “game-changer” in oil and natural gas production, one capable of doubling recovery efficiency. And geologic sequestration of industrial CO₂ in declining crude oil and natural gas fields was endorsed back in 2005 as a potential method of reducing greenhouse base emissions by the Intergovernmental Panel on Climate Change.

Current U.S. crude oil reserves are about 21 billion barrels. Based on USDOE Office of Fossil Energy;

“The presence of an oil bearing transition zone beneath the traditionally defined base (oil-water contact) of an oil reservoir is well established. What is now clear, and as recently documented in a series of DOE Office of Fossil Energy reports, is that, under certain geologic and hydrodynamic conditions, an additional residual oil zone (ROZ) exists below this transition zone, and this resource could add another 100 billion barrels of oil resource in place in the United States, and an estimated 20 billion barrels could be recoverable with state-of-the-art CO₂-EOR technologies. Large volumes of technically recoverable domestic oil resources remain undeveloped and are yet to be discovered in the United States, and this potential associated with CO₂-EOR represents just a portion, albeit large, of this potential. Undeveloped domestic oil resources still in the ground (in-place) total 1,124 billion barrels. Of this large in-place resource, 430 billon barrels is estimated to be technically recoverable. This resource includes undiscovered oil, "stranded" light oil amenable to CO₂ enhanced oil recovery (EOR) technologies, unconventional oil (deep heavy oil and tar sands) and new petroleum concepts (residual oil in reservoir transition zones).”

In this era of increased environmental restrictions, there is likely much greater efficiency and expediency in achieving meaningful increased oil & natural gas production utilizing EOR in existing fields than through what has become the regulatory nightmare of new E&P field development. Key driver to move forward for U.S. policymakers and stakeholders is to focus and place greater emphasis on energy independence, energy security, economic stability and jobs creation rather than pure politics. It is time for all sides to accept and jointly promote execution of multiple industry-wide projects for reducing energy prices via carbon capture and EOR.