Learn about the new international coalition aimed reducing short-lived climate pollutants, a framework for carbon capture and storage, and how federal agencies are incorporating climate adaptation into their decision making, the start of a clean energy standard conversation, and more in C2ES's February 2012 newsletter.
Agricultural industries and communities can benefit from selling CO2 to meet the growing demand for CO2 to boost domestic oil production.
The agriculture sector can supply high purity, manmade CO2 to access domestic oil resources in existing oil fields.
Agriculture industry opportunities for capturing CO2 to spur EOR expansion include:
- Ethanol production: The capture of biogenic emissions from ethanol production is technologically straightforward given the pure stream of CO2 produced in the fermentation process. Many ethanol plants sell CO2 to the food and beverage industry, but CO2-EOR represents a much larger market.
- Domestic fertilizer production: CO2 capture from fertilizer production is fully commercial and relies on the same proven technology platform used in compressing and dehydrating natural gas.
- Gasification of biomass with fossil fuels: CO2 capture from gasification of biomass, by itself or with fossil feedstocks for production of electricity and liquid fuels, holds promise for increasing both domestic energy production and reducing carbon emissions.
Agricultural industries present an important, early opportunity to provide CO2 for EOR because of the relatively low cost of capturing CO2 from these types of facilities
Build-out of pipeline infrastructure is required to support expansion of CO2-EOR.
CO2 pipelines have operated in the US for decades and there are currently over 3,900 miles of CO2 pipelines. Additional infrastructure is required to expand domestic oil production by gathering CO2 from sources such as ethanol and fertilizer facilities and transporting the CO2 to EOR operations by pipeline.
Integrating CO2-EOR with agricultural industries provides an opportunity for lowering the carbon intensity of agricultural products.
The environmental benefits of CO2-EOR provides agricultural industries a commercially proven option for complying with emerging and expected state, regional and international lowcarbon fuels policies. For example, capturing CO2 from ethanol plants and permanently storing it in EOR formations significantly lowers the carbon intensity of the ethanol plant operation, and potentially commands higher prices in states with Low Carbon Fuel Standards and other policies that create incentives for lower carbon intensity fuels.
Agricultural industries are working to advance and integrate technologies that can contribute to expanding CO2-EOR.
For example, ADM’s Illinois Industrial Carbon Capture and Sequestration (ICCS) Project will be a commercial-scale example of a CO2 capture and storage project at an ethanol facility and builds on ADM’s experience with a smaller-scale project. ADM will capture one million tons of CO2 per year at their ethanol production plant using dehydration and compression for transport, injection and geologic storage in the Mt. Simon Sandstone Formation. The ICCS project is carried out in partnership with the U.S. Department of Energy’s National Energy Technology Laboratory.
Another example is Chaparral Energy, which has CO2-EOR projects in Kansas, Oklahoma and Texas. Since 1982, the Chaparral and Merit Enid Fertilizer Project has captured and transported CO2 from an ammonia nitrogen fertilizer plant in Enid, Oklahoma to EOR fields in southern Oklahoma. Every year, about 600,000 tons of CO2are captured and injected, demonstrating the longevity of manmade CO2-EOR projects. Looking ahead to 2013, Chaparral will begin capturing about 850,000 tons of CO2 per year from an ammonia nitrogen fertilizer plant in Coffeyville, Kansas, and will transport the CO2 via pipeline approximately 70 miles to an EOR field for CO2-EOR recovery and simultaneous carbon storage. This project will be the largest CO2 capture and injection operation in N. America involving CO2 emissions from a fertilizer facility.
Where does the CO2 come from and where does it go? Today, most of the CO2 used in EOR operations is from natural underground ‘domes’ of CO2. With the natural supply of CO2 limited, man-made CO2 from the captured CO2 emissions of power plants and industrial facilities can be used to boost oil production through EOR.
Once CO2 is captured, it is compressed and transported by pipeline to oil fields. During EOR operations, CO2is injected into the oil formation where it mixes with the oil and helps move the oil through the formation and to the production wells. CO2 that emerges with the oil is separated and re-injected into the formation. CO2-EOR projects resemble a closed-loop system where the CO2 is injected, produces oil, is stored in the formation, or is recycled back into the injection well.
Is CO2-EOR safe? CO2 is non-flammable and nonexplosive. It is not defined as a hazardous substance, but a Class L, highly volatile, nonflammable/nontoxic material (CFRg, CFRe, Appendix B, Table 4). (WRI, 2008)
Operating for 40 years, CO2 pipelines have an excellent safety record with no serious injuries or fatalities ever reported. Today there are over 3,900 miles of pipeline transporting CO2 for EOR use at wells producing 281,000 (MIT 2011) barrels of oil per day. The industry has operated for decades under existing policy and regulatory oversight at the local, state and federal level.
Geologic storage of CO2 is also regulated under existing policies and regulations. CO2 is contained by a series of physical and chemical trapping mechanisms over time. Most formations that hold oil for thousands of years also have the ability to contain CO2. As an example, research by the University of Texas Bureau of Economic Geology’s Gulf Coast Carbon Center on the SACROC oil field, where CO2 has been injected for EOR since 1972, has found no evidence of CO2 leakage (TBEG). Experience from this decades-old CO2-EOR project and current commercial-scale CO2-EOR projects today shows that CO2-EOR can be performed in a manner that is safe for both human health and the environment.
- World Resources Institute, “Guidelines for Carbon Dioxide Capture, Transport, and Storage,” 2008.
- MIT Energy Initiative, “Role of Enhanced Oil Recovery in Accelerating the Deployment of Carbon Capture and Sequestration,” 2011.
- See the SACROC Research Project website for a complete list of studies. www.beg.utexas.edu/gccc/sacroc.php
Does Increasing CO2-EOR Create Jobs? Yes. Workers will be needed across the full CO2-EOR value chain: from building and operating CO2 capture systems at power plants and other industrial facilities, to constructing new pipeline networks to transport CO2, to retrofitting and giving new life to existing oil fields.
- The Kemper County Integrated Gasification Combined Cycle project in Mississippi, a new plant currently under construction, will create around 300 permanent jobs from power plant and supply chain operations. Employment during construction is expected to peak at 1,150 and average 500 jobs over a 3.5 year construction period. (DOE, 2010)
- FutureGen 2.0 proposes to retrofit an existing coal-fueled power plant in Meredosia, Illinois with advanced oxy-combustion technology. The project expects to create approximately 1,000 construction jobs in Illinois from upgrading the power plant, building the CO2 pipeline and storage facility, as well as visitor, research, and training facilities. (FutureGen)
- The 2010 Midwest CO2 Pipeline Feasibility Study included an analysis of job creation prepared by Northern Illinois University (NIU) on a proposed Midwest pipeline – which would transport manmade CO2 captured from coal gasification plants in Illinois, Indiana, and Kentucky to the Gulf Coast. NIU stated the pipeline construction would create over 3,500 local jobs over a four year construction period and over 2,000 jobs from indirect economic activity. (Lewis and Bergeron, 2009)
- The Wyoming Grieve Field project (Fladager, 2011), a small-scale CO2-EOR project that has been approved for construction, will generate more than 50 construction jobs to revitalize and return an aging oil field to service. It will also add five to ten operations jobs and produce 12 to 24 million barrels of additional oil that will inject millions of dollars into Wyoming’s economy through taxes, royalties, and local purchasing.
Does Increasing CO2-EOR Stimulate the Economy? Yes. CO2-EOR will create and preserve high-quality jobs and enable states and local governments to realize additional revenue, inject millions of dollars into local businesses, and reduce oil imports and trade imbalances.
Recent estimates by the U.S. Carbon Sequestration Council (Carter, 2011) show that expanded CO2-EOR could provide up to $12 trillion, equal to about 80 percent of the U.S. national debt, in economic benefits to the U.S. over the next three decades, based on the “multiplier effects” of oil production on economic activities. The multiplier effect is the tendency for newly generated wealth to transfer hands and be spent several times.
A report by the University of Texas Bureau of Economic Geology’s (TBEG) Gulf Coast Carbon Center (TBEG, 2004) quantifies the total economic activity of oil production for Texas to be 2.9 times the value of the oil produced. In other words, almost two dollars of additional economic activity is created for every dollar of oil produced. Moreover, TBEG estimates 19 jobs for every $1 million of oil produced annually.
Advanced Resources International (ARI, 2010) estimates that an increase in oil production from CO2-EOR could reduce net crude oil imports by half and provide up to $210 billion in increased state and federal revenues by 2030. ARI also estimates that a robust EOR policy could reduce the U.S. foreign trade deficit by $11 to $15 billion dollars (2007 dollars) in 2020 and $120 to $150 billion by 2030. Cumulatively, this reduction in oil imports would keep $600 billion here at home, generating additional economic activity, jobs and revenues, rather than flowing out of the U.S. economy to other countries.
- U.S. Department of Energy (DOE) in cooperation with U.S. Army Corps of Engineers. “Final Environmental Impact Study.” Chapter 4 Environmental Consequences. May 2010. http://www.netl.doe.gov/technologies/coalpower/cctc/EIS/kemper_pdf/Final/09_Chapter%204.pdf
- FutureGen Alliance. www.futuregenalliance.org/pdf/FutureGenFacts.pdf
- Lewis, J. & Bergeron, L. Regional Development Institute, NIU.“Economic Impacts of a Midwest CO2 Pipeline: Construction, Easement and Operational Impacts.” Under agreement with Denbury Resources. October 30, 2009.
- Fladager, Gary. “New enhanced oil recovery planned for Natrona County.” Casper Journal. 19 July 2011. http://www.casperjournal.com/news/article_f40db9a0-2406-5097-bc7d-d435a8ddf23d.html
- Carter, L.D., Enhanced Oil Recovery & CCS. United States Carbon Sequestration Council. 14 January 2011. http://www.uscsc.org/Files/Admin/Educational_Papers/Enhanced%20Oil%20Recovery%20and%20CCS-Jan%202011.pdf
- CO2 Enhanced Oil Recovery Resource Potential in Texas – Potential Positive Economic Impacts, Texas Bureau of Economic Geology (TBEG), April 2004.
- Advanced Resources International (ARI), White Paper: U.S. Oil Production Potential from Accelerated Deployment of Carbon Capture and Storage, 2010.
How does EOR reduce CO2 emissions? Using CO2 captured from power plants and industrial sources to enhance oil production has the potential to help the U.S. reduce its emissions by improving the CO2 intensity of the industrial and power generation sectors. Over the life of a project, for every 2.5 barrels of oil produced, it is estimated that EOR can safely prevent one metric ton of CO2 from entering the atmosphere.3
A current estimate of CO2 use for EOR is 72 million metric tons per year; 55 million metric ton of CO2 come from natural sources and 17 million metric tons come from anthropogenic sources. But the potential for EOR to contribute to CO2 reduction goals is great, as supplies of natural CO2 are constrained. The volume that could be captured and sequestered from industrial facilities and power plants to support “next generation” EOR could be 20- 45 billion metric tons of CO2. This is equal to the total U.S. CO2 production from fossil fuel electricity generation for 10 to 20 years. (ARI, 2011)
Will CO2-EOR harm groundwater resources? EOR is governed by federal regulations that require the protection of underground sources of drinking water, under the EPA’s Underground Injection Control (UIC) program. Many states have obtained authority from EPA to administer the UIC program and have laws that meet or exceed EPA’s requirements. Permits issued by the EPA or states require that EOR operators manage their site in a manner that will prevent CO2 (and other formation fluids) from migrating out of the subsurface confining formation and into drinking water aquifers. ( 40 CFR §144.12)
The University of Texas Bureau of Economic Geology’s (TBEG) Gulf Coast Carbon Center has studied the longest running EOR site in the world at the Scurry Area Canyon Reef Operators in Scurry County, Texas (SACROC). SACROC has been operating since 1972 and has injected over 175 million tons of CO2. TBEG has found no evidence that CO2 has escaped the EOR site and contaminated groundwater resources. (TBEG)
Furthermore, the International Energy Agency’s Greenhouse Gas Programme (GHGP) Weyburn-Midale CO2Monitoring and Storage project is the site of the world’s largest CO2 monitoring project. Since 2000 more than 30 internationally recognized research organizations have conducted scientific assessments of the integrity of the geological storage system, monitored CO2 in the deep subsurface, and tested for any evidence of anthropogenic CO2 at the surface.None of the studies have detected anthropogenic CO2 in the soils or groundwater. (Cenovus, 2011)
What is the land use impact? CO2-EOR largely takes place at existing oil fields and CO2 is transported through underground pipelines thus reducing land use impacts.
- Advanced Resources International (ARI). (June 20, 2011). Improving Domestic Energy Security and Lowering CO2 Emissions with “Next Generation” CO2-Enhanced Oil Recovery.
- 40 CFR §144.12
- See the SACROC Research Project website for a complete list of studies.
- Cenovus Energy, Site Assessment Weyburn Unit SW30-5- 13W2, November 2011.
How does CO2-EOR work?
CO2-EOR works most commonly by injecting CO2 into already developed oil fields where it mixes with and “releases” additional oil from the formation, thereby freeing it to move to production wells. CO2 is separated from the produced oil in above-ground equipment and re-injected in a closed-loop system many times over the life of an EOR operation.
A commercial technology established in North America in 1972, CO2-EOR could more than double economically recoverable U.S. oil reserves.
Increasing EOR production by using captured CO2 is a compelling and largely unheralded example of American private sector innovation that supports several urgent national priorities:
- Increase U.S. oil production from already developed fields with reduced risk and impact compared to conventional oil production;
- Strengthen America’s national security by reducing our dependence on unstable and/or hostile regimes for our oil supply;
- Create new, high-paying American jobs, and retain and attract private sector investment in our economy;
- Reduce trade deficits by keeping petroleum expenditures at home and at work in the U.S. economy;
- Achieve significant net carbon reductions by expanding opportunities for oil, natural gas, coal, ethanol and other industries to invest in commercially proven technologies to lower the CO2-intensity of their products.
Challenge: the U.S. needs to capture more CO2 to increase domestic oil production. CO2-EOR projects use CO2 to access and mobilize oil that otherwise would not be produced using conventional technologies. One study states that with an increase in CO2 supply and by applying existing best practices, CO2-EOR has the potential to add as much as 61 billion barrels of oil to U.S. domestic oil production.
CO2 capture projects and pipeline infrastructure are needed to meet this demand. Significant amounts of CO2 captured and transported from power plants and industrial sources are urgently needed to boost U.S. oil production through CO2-EOR.
Support for CO2-EOR is critical to achievement of energy security, economic, and environmental benefits. The development of CO2 capture projects, build-out of CO2 pipeline infrastructure and improvements to existing oil field infrastructure is required to provide the level of CO2 needed to expand the US CO2-EOR industry.
This requires private investment, and federal and state policies and incentives to support additional deployment of CO2 capture projects and infrastructure. These projects will provide jobs and economic benefits for local and state governments. At a time when federal and state officials are struggling to reduce deficits, tax revenues generated from new projects can offset the additional cost of state and federal incentives and even increase government revenue over time.
The National EOR Initiative is committed to building a pathway to a secure and low-carbon energy future through expansion of CO2-EOR. At its launch, the Initiative received bipartisan support from several members of Congress who are monitoring the Initiative’s progress and will receive final recommendations for legislative consideration.
EOR Initiative Timeline:
- July 2011: Launch of National EOR Initiative and inaugural meeting.
- August 2011 - January 2012: Ongoing work of industry, government and environmental leaders participating in EOR Initiative.
- February 2012: Release recommendations.
- ARI, Improving Domestic Energy Security and Lowering CO2 Emissions with “Next Generation” CO2-Enhanced Oil Recovery (CO2-EOR), June 20, 2011, DOE/NETL-2011/1504.
Learn about the Climate Leadership Conference, Australia's new carbon pricing mechanism, the Make an Impact energy conservation challenge, and more in C2ES's January 2012 newsletter.
Climate change is the global innovation challenge of our time. That was the theme of a Green Innovators in Business Network “Solutions Lab” in Cambridge, MA, last month co-hosted by C2ES, EDF, Innocentive, and others. Dr. Andrew Hargadon, a leading expert in technology management and author of “The Business of Innovating,” articulated for participants the enormous scale of innovation needed to achieve a clean energy economy. “Low-carbon innovation” is about dealing with new problems—carbon emissions, skyrocketing energy costs—that emerge from traditional solutions for making our economy work, such as for transporting goods or lighting our buildings. Transforming energy-consuming activities to emit less carbon requires that we deploy new technologies that will work with conventional behaviors, and develop entirely new behaviors.
C2ES's December 2011 features updates from the 17th annual Conference of the Parties (COP17) in Durban, South Africa, policy options for a clean energy standard, a blog post on the landmark new fuel economy standards, and more.
As discussed in the first part of this blog series A Strong Defense for Low-Carbon Innovation, the U.S. Department of Defense (DOD) has both the demand for and procurement capabilities to advance the development and deployment of innovative low-carbon technologies. This post highlights a variety of leading businesses innovating and creating new opportunities in response to the U.S. Department of Defense efforts, and some of the challenges businesses encounter along the way.
Strategic public-private partnerships are key to helping the DOD meet its energy goals and present significant low-carbon business opportunities. Employing the expertise of companies, such as those specializing in electricity generation or computer technology, gives the DOD access to specialty skills and knowledge needed to advance innovative low-carbon technologies. Businesses, in turn, have the potential to enhance their competencies through government-funded research and development, or provide new technologies for commercial markets after large-scale demonstration through the DOD.