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CO2 Utilization: Beyond EOR

Recently issued techno-economic report, exclusively for members of TCGR’s Carbon Dioxide Capture and Conversion (CO2CC) Program provides insights into CO2’s use as an injection fluid for enhanced hydrocarbon recovery…

See report TofC here (as PDF)

You no doubt are aware of the unmet need for the development of technology that can remove current and future carbon dioxide (CO2) from the atmosphere in an effort to address GHG mitigation. It is in this vein that TCGR’s most recent Carbon Dioxide Capture and Conversion (CO2CC) Program techno-economic report, “CO2 Utilization: Beyond EOR,” was created for organizations in the energy/fuels, petrochemical/chemical, and allied industries.

This report analyzes and evaluates the current status of enhanced oil recovery (EOR), enhanced gas recovery (EGR), and enhanced coalbed methane (ECBM) recovery for both conventional and unconventional reservoirs, with a specific focus on the usage of carbon dioxide (CO2) as an injection fluid for enhanced recovery from these resources.

Enhanced Oil Recovery—CO2-EOR is a proven and mature technology that has been practiced for decades, particularly in the U.S. It works because of the ability of CO2 to extract hydrocarbons into the CO2-rich phase. The technology for recovering more oil from depleted reservoirs is well-understood, and many operators engaging in EOR projects achieve competitive prices. This study finds that CO2-EOR activities have the potential to increase the ultimate recovery factor to values around 60% of the original oil in place (OOIP)—an incremental increase of ~20% over the typical waterflooding recovery factor.

Table 1: Sandstone Recoveries

  • CO2 costs, pipeline and transmission costs, and the influence of oil prices all play a role CO2 EOR profitability. An economic evaluation of operational costs is the most important preliminary study for understanding the costs associated with a candidate reservoir.
  • Lack of access to CO2 has stymied the growth of CO2-EOR projects. However, many projects have secured CO2 at competitive prices from facilities where the CO2 stream was a by-product of a process for another industry, such as natural gas processing, ethanol production, or fertilizer production. Generally, the costs associated with separation of CO2 from flue gases at power plants have, to date, been too high to induce much activity in this sector.
  • The subject matter experts (SMEs) interviewed for this report unanimously agree that CO2-EOR operators will significantly benefit from the recently enacted update to 26 U.S. Code § 45Q, which provides tax credits for CO2 The updated code now offers a tax credit of USD $35 per ton of CO2 used for EOR activities. Inclusion of the tax credit in an EOR project’s business case analysis may prove the determining factor for undertaking or rejecting the project.

Enhanced Gas Recovery—Conventional gas resources have been supplying an increasingly smaller portion of the natural gas demand in the U.S. This report finds that although injection of CO2 into gas reservoirs can “theoretically” improve gas production rates, this practice introduces non-trivial challenges, including potential corrosion of the injection tubing and surface facilities due to higher CO2 content. The costs associated with separation of CO2 from produced gas streams can be significant, potentially jeopardizing the project’s profitability. The relatively low commodity price for natural gas in the U.S.—price points that may persist for the next decade—further complicates this picture.

  • This report also investigates the potential of CO2 sequestration in depleted gas reservoirs. It finds that due to their very high storage volume and suitable permeabilities, these reservoirs have significant potential for use as CO2 storage media. The study’s findings show that operators could benefit substantially from CO2 emission regulations and tax credits, including the update to Section 45Q of the U.S. tax code.
  • The SMEs interviewed for this report unanimously concluded that the supply of natural gas in the U.S. will quite likely outpace demand in the coming decade, thus depressing the price of natural gas to levels where CO2-EGR is not attractive to industry.

Enhanced Coalbed Methane Recovery—This report also assesses current status of coalbed methane (CBM) reservoir development, its contribution to natural gas production, and the potential of CO2 injection for enhanced CBM (ECBM) projects.  CBM reservoirs account for ~4% of the natural gas production in the U.S.

  • Domestic natural gas production and consumption in the U.S.—for both residential and industrial sectors—will likely increase through 2050. The production rate of natural gas, however, will likely outpace consumption/demand rate during this period, resulting in more natural gas supply than demand over the coming decades.
  • The current consensus among the SMEs interviewed for this report is that CO2 injection for ECBM purposes will be more challenging in the coming decades. This assessment is based on four primary factors: 1) It is becoming increasingly difficult to find CBM reservoirs at shallow depths; and newly discovered reservoirs are generally found at greater depths; 2) Substantial concerns exist relative to the well drilling, completion, and maintenance of the wellbore in coalbed reservoirs; 3) Hydraulic fracturing in coalbed reservoirs is not a trivial and straightforward operation, such as the application of the technology to shale gas formations; 4) The physical interaction and structural changes that CO2 may cause to the coal formation needs considerable more investigation before these dynamics are adequately understood.

Don’t be left behind! Align with leading industrial CO2CC Program member-companies like BASF, Dow, Equinor, ExxonMobil, Petrobras, Reliance and Total, among others, in the CO2 utilization space by joining the CO2CC Program today. This is the only way to get TCGR’s in-depth and unparalleled report, CO2 Utilization: Beyond EOR.”

See report TofC here (as PDF)

More information about this and other services of the CO2CC Program can be seen at http://www.catalystgrp.com/php/tcgr_co2cc.php.
Call +1-215-628-4447 or e-mail John J. Murphy at jmurphy@catalystgrp.com, and we’ll be happy to discuss these and other interesting membership benefits.

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The Catalyst Group Resources (TCGR), a member of The Catalyst Group, is dedicated to monitoring and analyzing technical and commercial developments
in catalysis as they apply to the global refining, petrochemical, fine/specialty chemical, pharmaceutical, polymer/elastomer and environmental industries.