Photo credit: Flickr/Melissa
Posted on 07/20/2014 1:42:44 PM PDT by ckilmer
July 20, 2014 | Comments (0)
Photo credit: Flickr/Melissa
It is estimated that there are 160 billion barrels of oil still trapped underneath this country in what are considered depleted oil fields. That's a tremendous amount of oil given that America uses about seven billion barrels of it each year. In fact, if we could only find the key to unlock this trapped oil we could extend fleeting our reserves by more than 22 years.
That's why it probably comes as a surprise to learn that we've already found the key we need to unlock this oil. That key is none other than discarded carbon dioxide, with the primary source of this practically prized greenhouse gas coming from none other than coal emissions. It's a stunning turn of events to say the least.
Cleaner coal and more oil, too
America has actually been flooding depleting oil fields with carbon dioxide since the 1970's. Most of the carbon dioxide used has come from naturally occurring sources. The problem is that carbon is costly as getting it from those sources to spent oil fields requires pipelines. But thanks to technological advances in carbon capture and storage we're beginning to see new investments that are directed to cleaning coal and using the captured carbon to produce more oil. It's this combination that has the potential to breathe new life into some of America's long dormant oil fields.
A positive forward was taken when NRG Energy (NYSE: NRG ) announced earlier this week that it began construction on a billion dollar retrofit to its East Texas coal-fired power plant. While the project is being underwritten in part by $167 million from the Department of Energy, NRG Energy sees it being self-liquidating as the carbon dioxide that is captured will be used to yield a 30-fold increase in oil production from an aging oil field NRG Energy also co-owns.
The reason production will surge is because carbon dioxide, which is injected into an oil reservoir, mixes with oil droplets that are left behind after initial production and expands the oil so that it can move through producing wells. The following slide shows how the oil recovery process works.
Source: Denbury Resources Investor Presentation (link opens a PDF)
NRG Energy expects this process will improve the production at its West Ranch oilfield from a meager 500 barrels of oil per day to 15,000 barrels of oil per day at its peak. Put another way, at current oil prices that field will go from producing about $18.2 million worth of oil each year to well over half a billion dollars of black gold per year.
Meanwhile, the project will also substantially clean up the carbon emissions of NRG Energy's coal plant. About half of the flue gas that would typically be emitted into the atmosphere will go into the carbon capture facility, which will remove all of the sulfur as well as capture about 90% of the carbon. Because of that it will remove the equivalent of the exhaust of 336,000 cars each year.
Small steps
NRG Energy isn't the only company seeking to use captured carbon to clean up coal and fuel oil production. Denbury Resources (NYSE: DNR ) is building its business completely around the enhanced oil recovery process. So far the company has produced over a hundred million barrels of oil through carbon flooding. However, it is investing to build out the necessary carbon dioxide transportation infrastructure to revive even more nearly dead oil fields.
While most of Denbury Resources investments have been to take naturally occurring carbon dioxide to these fields, the company is beginning to use more industrially produced and captured carbon in its Gulf Coast operations as noted on the slide below.
Source: Denbury Resources Investor Presentation (link opens a PDF)
As that slide points out, Denbury Resources currently has three projects either currently producing or pending start-up. The most important is the upcoming Mississippi Power project from Southern Company (NYSE: SO ) . The $5.2 billion power plant is the first large-scale plant in America that will transform coal into a gas, capture the carbon, and then sell it to Denbury Resources for enhanced oil recovery. If successful, Southern Company's plant should supply Denbury Resources with about 115 MMcf/d of carbon dioxide. Overall it is expected that the carbon captured from Southern Company's plant will be used to boost oil output by two million barrels per year.
Investor takeaway
There is an incredible amount of oil stranded in America in what are currently thought to be depleted oil reservoirs. But by using carbon dioxide captured by coal power generation, the energy industry will could breathe new life into these oil fields and revive production. It's a stunning turn of events that can provide Americans with cheap and cleaner coal-fired electricity as well as enough oil to get our nation off of OPEC's oil.
No. It is better to describe it as recovering 30% of the total oil underground instead of only getting 10~15%.
Yea carbon credits.
..............
I’m against carbon credits.
That’s not what this is about.
The central question is this...does pumping carbon dioxide into old oil fields yield a 30 fold increase in oil production. That’s what the article contends. The second question is does the higher oil yield justify the cost of carbon dioxide. I don’t that either.
I’ve pinged a couple guys who might know.
We’ll see.
If the program is successful then what the hey. A very very beautiful thing has been accomplished. More coal plants can go up near old oil fields. The carbon dioxide from the coal plants can be used to produce more oil from the old oil fields. What’s not to like.
If the numbers don’t pencil then likely there won’t be anymore programs like this.
Anyhow more data is needed to evaluate this article properly.
Is this the first time a large scale version of this process has been tried?
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This is another question I don’t know the answer to.
Carbon capture with that technology would use up 1/3 of the plant’s output. What that means is we would have to build a minimum of one new coal plant for every three installing carbon capture just to replace the net MW loss to the grid.
I hope it works out. Freeing up more oil from domestic reserves makes the USA that much stronger.
Mix 1 gallon of oil and 1 gallon of refrigerant and you will have 2 gallons of oil. In the article the narrative says that “CO2 moves through formation finding droplets of oil and expanding them and moving them to the producing wells,” These droplets that have expanded will have a lower viscosity and will flow more easily through the formation to the producing wells. Then of course the CO2 will have to be removed to and could be recycled. I wonder what CO2 would do in Oil Shale?
There is that nasty carbon dioxide again.
Do you know which east Texas coal fired plant and which oil
field they are referencing in the article?
As Thackney said, it's been proven and its not new. In the past decade in Hobbs, NM OxyPermian has been converting waterflood injection wells to CO2 injection for tertiary recovery of crude. They have converted the water pipelines to carry CO2 to the well heads.
For those who couldn’t see through the sponsored obfuscations and distractions, coal-fired plants are being shut down in favor of natural gas interests. Very expensive. Power plant costs and energy prices are going to go sky high.
With total shutdown of modern tech, the extermination would largely take care of itself.
Yeah, yeah..
Sorta like soda pop for your refinery.
Another pressure depletion problem can occur when pressures drop to what is known at the 'bubble point' for the reservoir fluids.
The theory: Once a reservoir reaches bubble point (the temperature/pressure where gas bubbles out of the liquids), natural gas can come out of solution in the reservoir, effectively blocking liquid flow through pore throats with bubbles. Pore throats are the paces which connect the pores, often smaller or complex connections.
If the CO2 can be used to restore reservoir pressure, the bubbles can be forced back into solution, the pore throats relieved of obstruction, and remaining liquids recovered--enhanced production of oil, or water, or both.
A lot depends on the variables present in the field, reservoir pressure, rock type, pore geometry, permeability, structural and stratigraphic controls, to name a few.
> then why was a $167 million grant from DOE necessary in the first place?
Because they could get it? It might not have been necessary for the project to pencil out but since when has a business turned down Uncle Sugar?
Oh, I quite understand.
And, by the same token, under the circumstances, why did the DOE offer the grant?
Because they had the money.
Similarly, you can dissolve a half pint of sugar in a gallon of water, but you won't have a gallon and a half pint of liquid. Volumes are not additive, but the weights are.
It’s called tertiary recovery and it is not a new concept. A few fields in the panhandle were doing it in the late 80’s right before the Saudi price bust that caused a lot of outfits to walk away from a lot of fields in the 90’s.
No
Not a 30-fold increase, but it will increase production, but guess what? The old wells have to be re-drilled and FRACKED first. The CO2 is used to re-pressurize the field.
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