2D Ferguson Van Leeuwen Storing CO2 with Enhanced Oil Recovery CO2 with Enhanced Oil... · 2014-07-23 · May 6, 2008 Advanced Resources International Storing CO 2 with Enhanced Oil

Advanced Resources InternationalMay 6, 2008

Storing COStoring CO22 with with Enhanced Oil RecoveryEnhanced Oil Recovery

Prepared for:2008 CCS Conference

Prepared by:Robert FergusonTyler Van LeeuwenVello KuuskraaAdvanced Resources International, Inc.

May 6, 2008Pittsburgh, PA


OutlineOutline

• Background• Methodology• Technically Recoverable Resource• CO2 Demand and Recoverable Oil Resource• Market Demand for CO2: Power Plant Perspective• Summary Remarks


The Goal

Reduce EmissionsUS GHG Emissions

Source: Lashof, Hawkins. NRDC 2006


Challenges and Barriers

• GHG Reduction “Solutions”– Carbon Capture & Storage– High Efficiency Electric Vehicles– Nuclear Power– 2nd Generation Biofuels

• Are 10 years away– Climate scientists tell us GHG emissions need to

peak in 10-15 years, then begin dramatic decline.


The Role of CO2-EOR in Reducing GHG Emissions

• Revenues from sale of captured CO2 can Jump-start the application of CCS technology

• Oil produced from CO2-EOR has lower carbon impact than traditionally produced oil.


Large Volumes Of Domestic Oil Remain “Stranded” After Traditional Primary/Secondary Oil Recovery

Original Oil In-Place: 596 B Barrels*“Stranded” Oil In-Place: 400 B Barrels*

Proved Reserves21 Billion Barrels

Future Challenge400 Billion Barrels

Cumulative Production175 Billion Barrels

*Based on field-by-field assessment of over 2,011 large U.S. oil fields accounting for 74% of domestic oil production; excludes deep-water GOM.Source: Advanced Resources International (2008)

Storing COStoring CO2 2 with EOR: A Large with EOR: A Large ““ValueValue--AddedAdded””Market for COMarket for CO22 EmissionsEmissions


Storing COStoring CO22 with Enhanced Oil Recoverywith Enhanced Oil RecoveryStoring CO2 with Enhanced Oil Recovery (EOR)

provides an “early action pathway” for overcoming the initial barriers:• Regulatory / Public Acceptance• Long-term Liability • Pore space Ownership to Geological Storage of CO2

It can also provide significant revenues. For example, a one GWsize coal-fired power plant emitting 6 MMmt of CO2 a year and selling this CO2 (at pressure and at the plant gate) for $35 per mt would realize $6.3 billion in 30 years.


GROWTH OF CO2-EOR PRODUCTION IN THE U.S.

Oil and Gas Journal, 2008.


JAF01994.CDR

LaBargeGas PlantLaBarge

Gas Plant

Val VerdeGas PlantsVal Verde

Gas Plants

Enid FertilizerPlant

Enid FertilizerPlant

JacksonDome

JacksonDome

McElmo DomeSheep Mountain

Bravo Dome

McElmo DomeSheep Mountain

Bravo Dome

7

7

14

60

8

Dakota CoalGasification

Plant

Dakota CoalGasification

Plant

Antrim GasPlant

Antrim GasPlant

21

1

U.S. COU.S. CO22--EOR ACTIVITYEOR ACTIVITY

Number of CO2-EOR Projects

Natural CO2 Source

Industrial CO2 Source

CO2 Pipeline

101

Currently, 100 Domestic CO2-EOR projects provide 250,000 B/D Affordable natural CO2 launched CO2-EOR activity in the 1980’sFederal tax credits (Sec.43) and state severance tax relief still encourage CO2-EOR


The “Poster Child” - Weyburn Enhanced Oil Recovery Project(Maximizing Oil Recovery and CO2 Storage)

• Largest CO2 EOR project in Canada:

– 1.4 billion barrels (OOIP) oil field

• Outstanding EOR response • World’s largest geological CO2

sequestration project– 2.4 MMt/year – 23 MMt with EOR– 55 MMt with EOR/sequestration

Regina

Weyburn

CO2Beulah

North Dakota

Saskatchewan

Montana

ManitobaCanadaUSA

Canada

USA

Source: EnCana, 2005


Methodology


Storing COStoring CO22 with Enhanced Oil Recoverywith Enhanced Oil Recovery

Advanced Resources recently completed a report for DOE/NETL entitled “Storing CO2 with Enhanced Oil Recovery,”* an update to the previously published “basin studies”.**

• Examines economically recoverable oil from applying CO2-EOR (oil price $70/B; CO2 cost $45/mt),

• Addresses market demand for CO2 by the EOR industry• Uses a streamline reservoir simulator and a data base of

2,012 large oil reservoirs (74% of U.S. oil production),• Covers 27 producing states plus offshore Louisiana.

*Available on the U.S. DOE web site. http://www.netl.doe.gov/energy-analyses/pubs/Storing%20CO2%20w%20EOR_FINAL.pdf**Available on the U.S. DOE web site. http://www.fe.doe.gov/programs/oilgas/eor/Ten_Basin-Oriented_CO2-EOR_Assessments.html


U.S. Basins/Regions Studied For COU.S. Basins/Regions Studied For CO22 Storage and Storage and Enhanced Oil RecoveryEnhanced Oil Recovery

The 27 states with shading are included in the eleven Advanced Resources International updated “basin studies”of CO2 storage with enhanced oil recovery.


CO2 Demand and

Recoverable Oil Resource


Domestic Oil Resources Technically and Domestic Oil Resources Technically and Economically Recoverable w/COEconomically Recoverable w/CO22--EOREOR

Billio

n of

Bar

rels

of O

il

*Already produced or place into proved reserves with CO2-EOR.**Assuming oil price of $70/B (real); CO2 costs (delivered to field at pressure) of $45/metric ton ($2.38/Mcf); investment hurdle rate (15% and 25% ROR, real).

87.1

47.4

0

20

40

60

80

100

TechnicallyRecoverable

EconomicallyRecoverable**(@ 15% ROR)

EconomicallyRecoverable**(@ 25% ROR)

40.5

**


JAF02709.PPT

Base CaseOil Price($70/Bbl)

Higher Oil Prices

($90/Bbl)

Econ

omica

lly R

ecov

erab

le Do

mes

tic O

il(B

illion

Bar

rels)

0

20

30

40

50 47.9

10

45.0

Lower Oil Price

($50/Bbl)

39.1

60

43.1

29.7

38.2

15% IRR 25% IRR 15% IRR 25% IRR 15% IRR 25% IRR 15% IRR 25% IRR

48.344.6

Higher Oil Prices

($100/Bbl)

Economically Recoverable Domestic Oil Resources from Applying CO2-EOR


Market Demand for COMarket Demand for CO22 by the Enhanced by the Enhanced Oil Recovery IndustryOil Recovery Industry(1)(1)M

illio

n M

etric

Ton

s

*CO2 demand being met by on-going CO2-EOR projects and CO2 demand in Alaska.**CO2 demand that can be met by natural CO2 and already being captured CO2 emissions.(1) Economic CO2 market demand for EOR at oil price of $70/B (real), CO2 cost of $45/mt, and ROR of 15% (real).

Total U.S.CO2 Demand

NewLower-48

CO2 Demand

Net Lower-48From CapturedCO2 Emissions

0

2,000

4,000

6,000

8,000

10,000

12,000

14,00012,500

9,700

7,500

2,800* 2,200**


Market Demand for CO2:Power Plant Perspective


The NEMS Electricity Market ModuleNEMS Regions: CO2 supply and demand have been organized according

to the 14 NEMS regions (13 lower-48 plus Alaska) in the Electricity Market Module

JAF02709.PPT


Market Demand for COMarket Demand for CO22 by EORby EOR

Electricity Regions

New Coal Plants Market Demand for

CO2 Emissions(MMmt)

Ability to Meet Market

Demand(%)GW Capacity

30 years of CO2Emissions

(MMmt)

Region 2 – ERCOT (Texas) 16 GW 2,480 2,440 98%Region 9 – SERC (AR,LA, MS, AL, FL, TN, GA, SC, NC) 34 GW 5,270 1,700 32%

Region 13 – WECC/CA (California) - - 1,380 -

Region 10 – SWPP (OK, KS, NM) 7 GW 1,080 1,290 100+%Region 11/12 (WA, OR, ID, MT, WY, UT, NV)/(NM, CO, AZ) 26 GW 4,030 390 10%

All Others 14 GW 2,170 300 14%

TOTAL 97 GW 15,030 7,500 50%*After subtracting EOR market demand met by natural CO2 and being captured industrial sources.Source: AEO 2008 (March, 2008) and Advanced Resources International.


Relationship of CORelationship of CO22 Sales Price to Cost Offsets Sales Price to Cost Offsets in the Coalin the Coal--Fueled Power Sector (Year 2020)Fueled Power Sector (Year 2020)

7,920 btu/kWh x94 MMmt CO2/QBtu x

90% Capture

Sale of CO2 @ $25/mt CO2

Cost Offset:$16.80/MWh

Sale of CO2 @ $35/mt CO2

Cost Offset:$23.50/MWh

7,920 btu/kWh x94 MMmt CO2/QBtu x

90% Capture


Cost

of E

lectri

city (

$/MW

h)*

*Cost of electricity includes generation and transmission.

Source: AEO 2008, Reference Case (Electricity Market Module); CarBen 2008

Pulverized Coal

Advanced Coal (IGCC)

Advanced Coal w/CCS

Advanced Coal w/CCS and Sale of CO2

Advanced Nuclear

Reference Case2020

40

50

60

70

80

90

60 62

1981

Sale of Captured COSale of Captured CO22 Emissions Can Help Make Emissions Can Help Make Coal Plants w/CCS Competitive (Year 2020)Coal Plants w/CCS Competitive (Year 2020)

Advanced Coal w/EOR Revenues

2020

81

@ $35/mtfor CO2

5766


Cost

of E

lectri

city (

$/MW

h)*

*Cost of electricity includes generation and transmission.

Source: AEO 2008, Reference Case (Electricity Market Module); CarBen 2008

Advanced Coal w/CCS

Advanced Coal w/CCS and Sale of CO2

Advanced Coal w/CCS and “Learning”

Advanced Coal w/CCS, “Learning” and Sale of CO2

JAF02709.PPT

40

50

60

70

80

90

“Learning by Doing” can further decrease costs of deploying CCS in the Future

Advanced Coal w/EOR Revenues

2020

8175

Advanced Coal w/EOR Revenues and “Learning”

2020

@ $35/mt for CO2

@ $25/mt for CO2

57 58


20000

10000

5000

1000

10010 100 1000 10000 100000

1982

1987

1963

1980

Windmills (USA)(learning rate ~ 20%)

USAJapan

Cumulative MW Installed

19811983

500

Photovoltaics(learning rate ~ 20%)

Gas turbines (USA)(learning rate ~ 20%, ~10%)

US(1

990)

$/kW 1995

1992

200

2000

Costs of New CCS Technology Will Decline Due to “Learning”

Source: Nakicenovic, N., Grubler, A., and MacDonald, A., “Global Energy Perspectives”, ISBN-10: 0521645697, Cambridge University Press (1998).

Cost

Inde

x ($/k

W)

Number of Doublings (Installed Capacity)

Mean Learning Rate(115 Case Studies):-20% Per Doubling

1.5

1.0

0.5

0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Modified from Nakicenovic (1998).

Historical Cost Reductions Rates from Learning Curves

Learning Curves for Energy Technologies

RD&D PhaseCommercialization Phase


Integrating CO2-EOR and CO2 Sequestration shows that much more CO2 can be stored, making the additional oil produced “GREEN OIL”*.

“State of the Art” “Next Generation”

(millions) EOR Seq. Total

CO2 Storage (tonnes) 19 76 33 109

Storage Capacity Utilization 13% 52% 24% 76%

Oil Recovery (barrels) 64 180 - 180

% Carbon Neutral (“Green Oil”) 70% 100% - 160%

Integrating CO2-EOR and CO2 Storage

*”Green Oil” means that more CO2 is injected and stored underground than the volume of CO2 contained in the produced oil, once burned.


Summary RemarksSummary Remarks

• CO2-EOR offers a large, “value added” market for captured CO2 emissions of 7,500 million metric tons (equal to 49 GWs of advanced coal-fired power).

• Storing CO2 with EOR helps bypass three of today’s barriers to geological storage of CO2 - -regulatory/public acceptance, mineral (pore space) rights and long-term liability;

• The oil produced with CO2–EOR is 70% “carbon-free”. It can become 100+% “carbon-free” with “next generation” technology.


AdvancedResources

Internationalwww.adv-res.com

Office LocationsWashington, DC4501 Fairfax Drive, Suite 910Arlington, VA 22203Phone: (703) 528-8420Fax: (703) 528-0439

Houston, Texas11490 Westheimer, Suite 520Houston, TX 77042Phone: (281) 558-6569Fax: (281) 558-9202


Appendix Slides


Economics and Cost Model• Costs Accounted For:

– Drilling new wells or reworking existing wells– Surface equipment for new wells– CO2 recycle plant and CO2 spurline from main trunkline to the oil

field

– Operation and Maintenance (O&M)• Lifting produced fluids• Capturing, Separating, and Reinjecting CO2

• Economics:– Economic model uses an industry standard cash flow that can be

run on a pattern or a field-wide level and it accounts for:• Royalties• Severance and Ad Valorem Taxes• Oil Gravity and Market Location Differentials• Oil Prices, CO2 Costs, and Other Variables


CO2 Injection and Storage Process• Initially, purchased CO2, equal to 1 HCPV is injected with water for mobility control.

• As oil is produced, CO2 is separated from the oil and reinjected. As produced volumes of CO2 increase, these larger volumes are reinjected.

• At the end of the project, operator can close the field at pressure, storing essentially all of the injected CO2, or inject a large (1 to 2 HCPV) slug of water to recover any remaining oil and CO2. This CO2 may be used again.


State/ Province (storage location)

Source Type (location)

CO2 Supply MMcfd**

Natural AnthropogenicTexas-Utah-New Mexico-Oklahoma

Geologic (Colorado-New Mexico) Gas Processing (Texas) 1,700 110

Colorado-Wyoming Gas Processing (Wyoming) - 340Mississippi Geologic (Mississippi) 700 -Michigan Gas Processing Plant (Michigan) - 15Oklahoma Fertilizer Plant (Oklahoma) - 35Saskatchewan Coal Gasification (North Dakota) - 145

TOTAL 2,400 645

* Source: 12th Annual CO2 Flooding Conference, Dec. 2006** MMcfd of CO2 can be converted to million metric tons per year by first multiplying by 365 (days per year) and then dividing by 18.9 * 103 (Mcf per metric ton).

Injection of Natural and Injection of Natural and Anthropogenic COAnthropogenic CO2 2 for EORfor EOR


Market Demand for COMarket Demand for CO22 by EMM Regionby EMM RegionNEMS EMM Purchased CO2 Natural Industrial

Unmet (Net) Demand for CO2Region Requirements CO2* CO2*

(Tcf) (Tcf) (MMcfd) (Tcf) (Tcf) (Million mt)

Region 1 - ECAR 1.1 - 15 ** 1.1 58

Region 2 – ERCOT 72.3 25 110 1.2 46.1 2,438

Region 3 – PJM (MAAC) 0.1 - - - 0.1 4

Region 4 – MAIN 1.9 - - - 1.9 100

Region 5 – MAPP 2.1 - - - 2.1 109

Region 6 – NY ISO - - - - - -

Region 7 – NW ISO - - - - - -

Region 8 – Florida 0.2 - - - 0.2 9

Region 9 – SERC 40.0 8 - - 32.0 1,695

Region 10 – SWPP 29.7 5 35 0.4 24.3 1,286

Region 11 – WECC/NWPP 7.8 - 175 1.9 5.9 311

Region 12 – WECC/RMPP 2.3 - 65 0.7 1.6 83

Region 13 – WECC/CA 26.0 - - - 26.0 1,377

Region 14 - Alaska 39.6 5 - - 34.6 1,831

TOTAL U.S. 223.0 43 385.0 4.2 175.8 9,302

Lower-48 183.4 38 385.0 4.2 141.2 7,470*Assumed available to be produced and productively used by the CO2-EOR industry in the next 30 years.

**Less than 0.01 Tcf and therefore not included in totals

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2D Ferguson Van Leeuwen Storing CO2 with Enhanced Oil Recovery CO2 with Enhanced Oil... · 2014-07-23 · May 6, 2008 Advanced Resources International Storing CO 2 with Enhanced Oil