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Scottish Carbon Capture & Storage Murchison House, West Mains Road, Edinburgh EH9 3LA
Telephone +44 (0)131 650 0270 www.sccs.org.uk
Pathway to UK CCS rollout: CO2-EOR
Professor Stuart Haszeldine
SCCS & UKCCSRC
University of Edinburgh
UKCCSRC twice-a-year meet Strathclyde, 9 Sept 2015
Power sector (all sources) has not decarbonised at all since 1990.
Growth in Renewables and Efficiency has matched the increased global demand
UK carbon budget 4: gap by 2027
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015 2
Gap 70 Mt, progressively increases to 250 Mt : need ways of storing/reducing carbon Gap 70 Mt, progressively increases to 250 Mt : need ways of storing/reducing carbon
Electricity emissions 150Mt/yr
Other fossil fuels 400 Mt/yr
Electricity emissions 150Mt/yr
Other fossil fuels 400 Mt/yr
[email protected] Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
1 Mt CO2 / yr
CO2 capture and storage proven
1 Mt CO2 / yr since 1996 : Sleipner
3
Basic Rollout Questions
• Does CCS need acceleration and money ?
• Does CO2-EOR need acceleration ?
• Can both of these be combined,
profitably and environmentally ?
4 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
YES
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
Inject CO2 into deep oilfield. Makes the oil less viscous, Repressurises, Produces 5 – 15% extra oil Recycle CO2, all stored
What is CO2 – EOR ?
Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
More than 20 Suitable oilfields Geological knowledge and expertise Legacy pipelines Overlap with CO2
Storage regions UK or EU supply CO2
Where is CO2 – EOR ?
Does CO2-EOR work now ?
• No CO2 supply
• Expensive Investment
• Licensing and
Regulation
• Oil price
7 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
• CCS supplies CO2
• Financial incentives, set to Profit Index to compete globally
• Enabling oil,
plus CO2 storage
• Oil price > $ 60/bbl
Gas-EOR works in the North Sea
8 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
Magnus (BP) uses stranded CH4, to produce extra oil, 39API 40% of field production in 2012 attributable to gas injection EOR
Magnus (BP) uses stranded CH4, to produce extra oil, 39API 40% of field production in 2012 attributable to gas injection EOR
SPE 171780-MS
This Report: tackling the barriers
9 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
• Economics • Stakeholder • EOR performance • CO2 Management & Environmental • Legal • CO2 Supply
A series of studies Designed and directed by the
steering group of the JIP
Enacted independently by academic experts, or by recognised consultants
Report – summary versions
Website – full versions (may
be commercially limited)
www.sccs.org.uk/expertise/reports/sccs-co2-eor-joint-
industry-project
A series of studies Designed and directed by the
steering group of the JIP
Enacted independently by academic experts, or by recognised consultants
Report – summary versions
Website – full versions (may
be commercially limited)
www.sccs.org.uk/expertise/reports/sccs-co2-eor-joint-
industry-project
CO2-EOR Economic Multiplier
10 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
Linkage of CCS, and EOR offshore has LARGEST LEVERAGE
£1 Treasury invested = £7.2 Output
Linkage of CCS, and EOR offshore has LARGEST LEVERAGE
£1 Treasury invested = £7.2 Output
Value-for-Money finance help from Government = input can be measured by the effects = output Multiplier = activity into wider UK economy
Offshore Wind = 3.3 CCS – pure storage = 2.6 CCS + CO2-EOR = 7.2
Economic sensitivity oil & CO2 price
11 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
Reference Loan Low Tax Low CO2
Claymore
Scott
Buzzard
Claymore & Scott
90
40
£
Size of dot = NPV
Public data only For each field
Oil
Pri
ce
62
$
140
CO2 £ /ton Kris Welkenhuysen,
Geological Survey Belgium
10 0 -5
Double Monte Carlo: reserves and
prices
for this evaluation no oil company has provided detailed decision-making inputs
CO2-EOR Stakeholders
12 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
Seven types of public: each hope for good, but expect poor Seven types of public: each hope for good, but expect poor
CO2-EOR Performance
13 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
0
2
4
6
8
10
2 2a 2b 2c 3a 3b 4a 4b 5a 5b 6a 6b 6c 6d 7a 7b 8a 8b 9a 9bIncr
emen
tal O
il R
ecov
ery
% S
TOIIP
@ 10 years LOF
@ 15 years LOF
Conti nuous gasinjection cases
Increased injection rate cases
WAG casesRe-pressurisation
cases1 Mt/yr
cases
0
20
40
60
80
100
2 2a 2b 2c 3a 3b 4a 4b 5a 5b 6a 6b 6c 6d 7a 7b 8a 8b 9a 9b
Net
CO
2 St
ored
MtC
O2
Conti nuous gasinjection cases
Increased injection rate cases
WAG casesRe-pressurisation
cases1 Mt/yr
cases
Incremental oil recovery
Net CO2 stored
More CO2 injection rate = more oil = more CO2 stored
More CO2 injection rate = more oil = more CO2 stored
Olden & MacKay Heriot-Watt
CO2-EOR Environmental
14 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
Compare emissions 3.96 Mt CO2 of CCS plus imported oil against 4.25 Mt CO2 emissions CCS + CO2-EOR which produces oil
Minimal additional carbon required to produce 100 Mbbl oil in 10 yrs
Low-carbon electricity unaffected
Compare emissions 3.96 Mt CO2 of CCS plus imported oil against 4.25 Mt CO2 emissions CCS + CO2-EOR which produces oil
Minimal additional carbon required to produce 100 Mbbl oil in 10 yrs
Low-carbon electricity unaffected
3.96 Mt CO2
4.25 Mt CO2
CO2-EOR Legal
15 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
• CO2 for food is moved across EU boundaries.
• CO2 for EOR operations can be moved across EU
boundaries
• Bilateral contracts can be enacted, before any
federal agreement
• Property rights offshore are unclear, and practical
CO2-EOR Supply : shipping
16 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
Tran
spo
rt c
ost
s (U
S$/t
CO
2)
Source: Doctor et al, 2005
Shipping is flexible and similar cost to pipes
Shipping is flexible and similar cost to pipes
CO2-EOR accelerates storage
17 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde
9Sept2015
CO2-EOR acceleration stores 12x more CO2 by 2050, Compared against slow Government development rate
CO2-EOR acceleration stores 12x more CO2 by 2050, Compared against slow Government development rate
Summary
19 Pathway to UK CCS rollout, CO2-EOR. UKCCSRC Strathclyde 9Sept2015
• CO2-EOR could produce an extra 1 Billion barrels UKCS oil • Gas injection recovery works in the North Sea, on very large fields • The Prize is blocked by investment size, perceived risk, and CO2 availability • Fiscal allowance CAPEX on fields and clusters needed, to £23 /bbl oilpretax • Environmental and carbon budget effects are similar to oil produced now • Acceleration of CCS development, can deliver adequate CO2 by 2030 • Economic Multipliers are very favourable 7.2 x; better than off-wind or CCS • Carbon budget is favourable, electricity stays “green”, more CO2 is stored • Stakeholders are favourable, if CO2-EOR is part of a low-carbon Transition
Next Phase of CO2-EOR project seeks sponsors, Oct 2015 Next Phase of CO2-EOR project seeks sponsors, Oct 2015
