National Enhanced Oil Recovery Initiative Looks for Progress in Energy Policy
Recently, I had the opportunity to attend as an observer the launch of the National Enhanced Oil Recovery Initiative, facilitated by the Center and the Great Plains Institute. In the short time since the launch, the EOR Initiative has generated notable
Carbon dioxide enhanced oil recovery (CO2-EOR) works by injecting CO2 into existing oil fields to increase oil production. It is not a new concept. In fact, around 5 percent, or 272,000 barrels per day, of all domestic oil produced comes from oil recovered using this technique, which was first deployed in West Texas in 1972. Decades of monitoring CO2-EOR sites have shown that in properly managed operations the majority of CO2 is retained in the EOR operation and not released to the atmosphere. One of the initiative’s goals is to better understand the role of CO2-EOR for carbon storage as this industry grows to produce more than 1 million barrels per day, or around 17 percent of domestic oil supply in 2030.
There are many benefits of CO2-EOR. From a climate perspective, if the CO2 used is from industrial (man-made) sources, CO2-EOR serves to reduce emissions from the industrial facility by storing CO2 that would otherwise enter the atmosphere. Currently, most CO2 used for CO2-EOR purposes come from naturally occurring CO2 reservoirs (45 million metric tons a year), but the demand for increased domestic oil supply has outpaced the supply of CO2. As a result, more CO2 will have to come from industrial sources.
But moving CO2 from industrial sources to EOR consumers is a challenge. Currently, 3,600 miles of CO2 pipeline carry 50 million metric tons of CO2 annually for EOR purposes. But much more pipeline is needed to connect the CO2 suppliers, such as Archer Daniels Midland’s ethanol refinery in Decatur, Illinois, to the EOR sites, such as Denbury Resources’ oil fields in Mississippi. Building pipelines is capital intensive, but once built, the pipelines can be used for carbon capture and sequestration (CCS) projects that would have climate benefits.
The benefits of CO2-EOR also include improved energy security, more domestic jobs, and a more robust economy – which is why the EOR Initiative has garnered endorsements from several members of Congress, including Sens. Kent Conrad (D-ND), John Hoeven (R-ND), Dick Lugar (R-IN), and John Barrasso (R-WY), and Rep. Mike Conaway (R-TX). Sen. Lugar has recognized the strategic importance of CO2-EOR and has recently introduced legislation that would reduce reliance on foreign oil using CO2-EOR. The National Enhanced Oil Recovery Initiative aims to build off of this political momentum and promote the use of CO2-EOR.
The initiative participants consist of many industry veterans, lawyers, elected officials, regulators, environmentalists, and engineers who aim to address the challenges facing CO2-EOR. The initial discussion was professional, grounded on practical solutions, productive, and constructive. The group’s next meeting is in early September. Based on the progress already made during their first meeting, be sure to look for their policy recommendations in early 2012.
Kevin Kuo is a Solutions Intern