The Air That I Breathe

What if crude oil could be extracted from the ground, refined into gasoline and diesel, trucked to your local service station, and used in your SUV to take that next road trip, all the while resulting in LESS CO2 being emitted into the atmosphere? That would mean carbon-negative crude. Crazy talk from a relic of the fossil (fuel) generation? Not so! Carbon-negative crude is being produced today along the U.S. Gulf Coast, assuming you buy the logic of how carbon accounting works for capturing CO2 and using it for enhanced oil recovery — EOR. In today’s blog, we’ll explore what it takes to achieve carbon-negative crude, and why there is vast potential for expanding this pathway to lower greenhouse gas emissions.

Significantly reducing greenhouse gas emissions is an all-hands-on-deck kind of thing. More wind power? More solar? Electric vehicles? Yes, yes, and yes. Another great way to slash GHGs is to use man-made or “anthropogenic” carbon dioxide for enhanced oil recovery. EOR is an extraordinarily efficient way to permanently store CO2 deep underground. And today, the economics for EOR are being turned on their head — in a good way. For decades, the acquisition of CO2 has been a significant cost for EOR operators, requiring volumes to be produced from natural geological formations and then to be pumped to the oil fields where the CO2 is used. But things are changing. Now companies are planning to spend big bucks to capture and dispose of their CO2, meaning they may be paying someone to get rid of it. And if they pay, that flips CO2 from an operator cost to a revenue stream. The implications are profound, with operators historically motivated to use CO2 as efficiently as possible set to morph their operations to use as much CO2 as can be safely sequestered. In today’s blog, we continue our series on CO2-based EOR by looking at the coming transition in CO2/EOR economics.

The handful of enhance-oil-recovery producers in the Permian Basin secure virtually all of the carbon dioxide they use from natural CO2 reservoirs located thousands of feet below the surface. In essence, they are taking CO2 out of the ground and putting it back in during the EOR process — producing more crude oil and demonstrating that the CO2 is safely and securely stored underground. Now the challenge is to transform this proven process in a way that reduces greenhouse gas emissions. To do that, EOR producers would need to use man-made or “anthropogenic” CO2 that is captured from industrial and other sources. Well, that’s exactly what’s already happening to a significant degree in EOR operations along the Gulf Coast and in the Rockies, with plans by a leading producer in both regions to use “A-CO2” for the vast majority of its CO2 needs within a few years. In today’s blog, we continue our series on CO2-based EOR with a look at how Denbury Inc. is shifting from naturally sourced CO2 to the man-made stuff.

The vast potential for permanently storing carbon dioxide underground by using it for enhanced oil recovery can only be realized if produced or captured CO2 can be economically transported long distances via pipeline. And the only way that can happen is if the CO2 is compressed into a “supercritical” or “dense-phase” fluid — a state that is somewhat compressible like a gas but flows and can be pumped like a liquid. When CO2 is in a supercritical state, much more of it can economically flow through a pipeline to the producing field. And when it gets there, the dense-phase CO2 can be injected into an oil production zone, where it has the unique ability to flow through permeable rock formations, bond with and “swell” trapped oil molecules, and free the oil to move to the production well, then up to the surface. Given that CO2-based EOR is destined to become a much more significant activity in the energy industry, it’s time for a fun-filled review of the thermodynamics of fluids as it relates to the transportation of CO2 and its use in the production of crude oil. (Wait! Don’t leave! This will be easy to follow! We promise!) Today, we continue our series on the rapidly evolving CO2 market and why it matters to crude oil producers.

Using carbon dioxide for enhanced oil recovery offers tremendous potential for CO2 sequestration. The problem is, most the CO2 used in EOR today is produced from natural underground sources, only to be piped to EOR sites and put underground again. Realizing the full promise of CO2-for-EOR would require sourcing more and more anthropogenic CO2, or A-CO2 — in other words, “man-made” CO2 that is captured from power generation and industrial processes. In addition to the environmental benefits, there are two other drivers for making this switch from natural CO2 to A-CO2: the first is that some of the natural sources of CO2 used today for EOR are dwindling, and the second is that the push to sequester man-made CO2 is backed by tax credits and other government-backed incentives. No matter the CO2 sourcing, CO2-for-EOR requires pipelines to transport the CO2 from where it is produced to EOR sites. Today, we continue our series on the rapidly evolving CO2 market and the huge opportunities that may await those who pursue them.

No doubt about it. The global effort to reduce emissions of carbon dioxide — the most prevalent of the greenhouse gases — is really heating up. Yes folks, CO2 is in the spotlight, and everyone from environmental activists and legislators to investors and lenders want to slash how much of it is released into the atmosphere. There are two ways to do that. First, produce less of it. That’s what the development of no- or low-carbon sources of power and the electrification of the transportation sector are intended to accomplish. The second way is to capture more of the CO2 that’s being emitted and make it go away, and the most cost-effective means to that end is sequestration — permanently storing CO2 deep underground, either in rock formations or in oil and gas reservoirs through a process called enhanced oil recovery, or EOR. Sure, there’s an irony in using and sequestering CO2 to produce more hydrocarbons, but the volumes of CO2 that could be squirreled away for eternity through EOR are enormous, and the crude produced might credibly be labeled “carbon-negative oil.” In today’s blog, we continue our look at the rapidly evolving CO2 market and the huge opportunities that may await those who pursue them.

There’s a fresh breeze blowing through the energy patch. Oil and gas companies seem to have turned a corner and are piling on the climate change bandwagon. They’re talking green, walking green, and many are in hot pursuit of government subsidies and tax breaks that are here today, with expectations that more incentives are on the way. Carbon dioxide is their primary target — it’s by far the most prevalent greenhouse gas and technologies already exist for permanently depositing captured CO2 deep underground. In fact, the U.S. is #1 in the world at this, accounting for about 80% of all the CO2 being stored globally. But it may surprise you to learn that much of the CO2 being squirreled away for eternity isn’t captured from industrial processes or exhaust. Instead, a lot of it comes from CO2 reservoirs in Colorado and New Mexico, tapped on purpose to bring vast volumes of CO2 to the surface. Why? So that CO2 can be put right back into the ground. Sound crazy? Well, it’s not. In the blog series we begin today, we explore the rapidly evolving CO2 market and the huge opportunities that await those with the ambition to pursue them.