Is EOR a Dead End for Carbon Capture and Storage?

In April’s editorial, “When Technology Tails Wag Power Dogs,” Editor Gail Reitenbach mused about whether the use of captured carbon dioxide (CO2) for enhanced oil recovery (EOR) represents a viable way forward for carbon capture, use, and sequestration (CCUS). This is a subject both of us have covered in various ways over the past few years, and I’ve wanted for a while to look at the actual numbers: Is EOR a useful path, or is it simply a shell game moving carbon around from one place to another?

Certainly, the U.S. Department of Energy (DOE) thinks EOR is a great idea. Last year, it touted the fact that DOE-backed CCUS projects had captured more than 10 million tons of CO2. As Chris Smith, DOE’s assistant secretary for fossil energy, said at the time, “While we’re safely and permanently storing large quantities of CO2 underground, we’re also working on beneficial CO2 utilization. Enhanced oil recovery (EOR)—storing CO2 in depleted oil fields to produce incremental barrels of oil—is one important pathway.”

Pumping It Out

For those of you who haven’t been following these issues closely or have no experience in oil production, most of the oil that is present in an oil field when it’s first drilled doesn’t come up easily. Some of it is under pressure and will flow out in the proverbial gusher, but that represents only a small portion of the total. More intensive measures are necessary to get the rest. In some cases, as much as 90% of the oil will stay in the ground unless it’s forced out.

There are a number of common methods that can be used to exact it, such as brine injection. EOR, because of the expense (more on that in a moment) comes into play only when other methods are no longer productive (thus the enhanced in the term). EOR is a process that involves injecting pure CO2 into the oil reservoir. It’s important to understand here that the CO2 is in supercritical—not gaseous—form during injection, and in that form, it can dissolve and mix with the oil in the ground to bring it back up. This is why petroleum engineers refer to it as “miscible CO2 EOR.” (There are actually several methods that fall under EOR, but CO2 flooding is the most common.)

EOR

1. Flood out. Supercritical CO2, injected underground into mostly depleted oil reservoirs, can dissolve trapped oil and bring it to the surface. The CO2 that rises with the oil (about half stays underground) is captured and reused. Courtesy: Global CCS Institute

 

EOR is not a new process. In fact, it was around long before anyone coined the term “climate change.” The technology was first patented in 1952 and tested at scale in the 1960s. It first began seeing commercial use in the 1970s and more widespread use in the 1980s, primarily in the Permian Basin. The limiting factor, as might be guessed, was where to get sufficient quantities of CO2.

Two sources became common: CO2 recovered from produced natural gas and natural CO2 trapped underground in saline formations. The CO2, whatever the source, is shipped via pipeline to oilfields where it’s needed. EOR is a mature industry, and according to the American Petroleum Institute, there are around 10,000 miles of CO2 pipelines in use across the country for EOR. There’s actually more demand for CO2 in EOR than current production sources can meet—the DOE estimates as much as 500 million cubic feet per day. All of that naturally drives up the price of CO2.

Sequestered . . . Or Not?

Though some CO2 comes back up with the oil, it’s captured, separated, and pumped right back into the reservoir. In practice, around 90% to 95% of the CO2 used in EOR ultimately ends up underground, which is why the industry needs a steady supply.

So as a long-term storage method, EOR looks good. And the demand for it, and the potential value of it when captured from coal combustion in a power plant, has led to several power plant projects aimed at supplying CO2 for EOR, though none have come online in the U.S. so far. The only one operating anywhere in the world is the SaskPower Boundary Dam project in southern Saskatchewan, Canada, which provides CO2 for EOR as well as non-EOR sequestration. That project was POWER’s 2015 Plant of the Year Award winner.

EOR

2. Trailblazer. SaskPower’s Boundary Dam project in Canada is currently the only operating carbon capture facility at a power plant. Some, though not all, of the captured CO2 is used for enhanced oil recovery (EOR). Courtesy: SaskPower

 

But the question few, if any, people seem to be asking about EOR is this: If the point of CCUS is to prevent CO2 emissions from being released into the atmosphere as a result of fossil fuel combustion, does it really make sense to turn right around and use that CO2 to increase fossil fuel production? Put another way, does using CO2 for EOR still mean a net decrease in CO2 releases into the atmosphere?

Answering this question requires looking the relative proportions of where all that carbon is going. According to the scientific literature I was able to find, roughly 1 metric ton of CO2 is required to produce 2.5 barrels of oil via EOR. The DOE, meanwhile, reports that EOR in the U.S. uses 1.6 billion cubic feet of CO2 to produce 170,000 barrels of oil per day, which works out to a slightly lower 2.08 barrels per metric ton.

The Environmental Protection Agency (EPA), in making its calculations for environmental rulemaking and other functions, uses a figure of 0.43 metric tons of CO2 equivalent per barrel of oil when completely combusted. So on that basis, each ton of CO2 used in EOR is bringing up somewhere between 0.89 and 1.075 equivalent tons of CO2 in the form of crude oil.

But not every ounce of oil that comes up from the ground will be combusted. According to the Energy Information Administration, about 85% of the petroleum consumed in the U.S. goes to gasoline, diesel, and other types of fuel; the rest is used as chemical feedstock and for other products like asphalt. So that ton of CO2 used in EOR is bringing up roughly 0.76 to 0.91 tons of equivalent CO2 that will ultimately wind up in the atmosphere. (Since roughly 100% of those liquid fuels will be used for transportation and other functions that aren’t being considered for CCUS.)

EOR: Who Really Benefits?

All that makes EOR a net benefit, but a pretty small one. Each ton of CO2 used in EOR is actually sequestering only around 0.24 to 0.09 tons of it on a permanent basis.

Capturing CO2 from a power plant is, to put it very mildly, not cheap (just ask Mississippi Power, which is hemorrhaging money as a result of its ill-fated Kemper County project). When the same company owns the power plant and the oil well, as with NRG’s Petra Nova project near Houston, a CCUS-for-EOR retrofit can apparently make economic sense, but whether it makes environmental sense is another question.

EOR

3. $6.66 billion and counting. Mississippi Power’s Kemper County integrated gasification combined cycle plant, designed to capture carbon dioxide from gasified coal before combustion, is far over budget and years behind schedule. Once online, the plant will send captured CO2 by pipeline to nearby oil fields for use in EOR. Courtesy: Mississippi Power

 

Certainly, the costs seem wildly out of proportion for the net benefit, and as Reitenbach observed in her April editorial, it’s in many ways a revenue transfer from the power sector to the oil sector (facilitated by substantial federal subsidies). When using captured CO2, EOR makes oil wells more productive at the cost of making CCUS-equipped power plants less productive, at a climate benefit that, if it’s not negligible, is far less than what it’s being sold as.

From where I’m sitting, if the point of CCUS is to reduce CO2 emissions, EOR is about the last thing it should be used for. On the other hand, if the point is to redistribute vast amounts of money, it’s off to an excellent start.

—Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).