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.
In observance of today’s holiday, we’ve given our writers a break and are revisiting a recently published blog on CO2. If you didn’t read it then, this is your opportunity to see what you missed. Happy 4th of July!
When we first started posting our daily blog many, many moons ago, our unshakable focus was on hydrocarbons and the interrelationships between the crude oil, natural gas, and NGL markets. Life was so simple then! But more recently the energy industry has begun to undergo massive change, and lately the pace of that change has been accelerating and the trajectory and target have become crystal clear. Like it or not, we’re headed toward a lower-carbon world, and players in the hydrocarbon sector can either figure out how to participate in — and hopefully benefit from — the upheavals that are occurring or watch from the sidelines. As for us, we prefer to be engaged and to learn, and to try to foresee how the energy transition getting under way in earnest will unfold, and how the role of hydrocarbons will evolve as it does. Toward that end, in addition to our blogs about crude oil production, LNG exports, steam cracking margins, gasoline demand and similar topics, we’ve been blogging a lot more in recent months about things like the ESG movement, the prospects for producing hydrogen for use as a fuel, low-carbon fuel standards, renewable diesel, and, in this series, the huge potential for sequestering carbon dioxide through enhanced oil recovery (EOR).
As we said in Part 1, CO2 sequestration is the permanent storage of CO2 deep below ground in permeable rock formations, oil and gas reservoirs, saline formations, coal seams, etc. If the CO2 is captured and stored, and that’s all, the process is called CCS (Carbon Capture and Storage). On the other hand, if the CO2 is used for some other process before it’s stored, it is called CCUS (Carbon Capture, Use, and Storage). EOR is a form of CCUS, and a very economic one at that. In EOR, CO2 is pumped into the production zone of an old, exhausted oil field. It mixes with the oil that has been left behind, combines with the oil so that it “swells” and flows better, and helps push that oil toward the producing wells, in effect breathing new life into otherwise depleted fields. Some of the CO2 used in this process stays underground, permanently trapped in the reservoir. The rest of the CO2 comes out of the ground mixed with the oil, then is separated and recycled back into the field — a process that goes on until all the original CO2 used is trapped underground.
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