The Air That I Breathe, Part 7 - Reality or Myth? Carbon-Negative Crude from EOR

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.

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This is Part 7 of our deep dive into the fascinating and sometimes opaque world of CO₂. In the first six parts of this blog series, we examined where CO₂ comes from, the alternatives for reducing CO₂ emissions (Part 1), how sequestration can be a major contributor to reducing those emissions, and why EOR can jump-start CO₂ sequestration initiatives by providing the means to permanently store CO₂ underground (Part 2). We looked at CO₂ sourcing and pipeline networks for Permian EOR (Part 3), why CO₂ needs to be compressed into a “supercritical” or “dense-phase” fluid before it can be economically piped long distances (Part 4), and the CO₂/EOR operations of Denbury Inc. along the Gulf Coast and in the Rockies (Part 5). In Part 6, we explored the cost of natural CO₂ used for EOR, how that cost encourages EOR operators to minimize their use of CO₂, and how those economics are turned on their head if CO₂ is cheap or free. That is quite possible as regulatory and tax incentives encourage industrial companies to cut their CO₂ emissions. EOR operators will be economically incentivized to use more CO₂, and there is a lot more of the greenhouse gas (GHG) that can be directed down the CO₂ pathway as more incentives are put into effect. As the quantity of CO₂ sequestered using EOR ramps up, the more carbon-negative crude will be produced.

So what exactly is carbon-negative crude? Although you can find various definitions of the term, it basically means crude oil whose production, transportation, refining, and consumption results in net-negative GHG emissions. There are two primary ways to get a carbon-negative barrel of crude oil. First is the Offset Method, in which the seller of crude buys or otherwise secures more than enough carbon “credits” to offset the emissions from the crude — buying enough credits to simply equal the emissions would result in carbon-neutral crude (see yesterday’s A Matter of Trust for more on offsets and credits). The other way is the Process Method, in which the crude is produced using physical processes that eliminate more CO₂ from the atmosphere from that barrel of oil than the production, transportation, refining, and consumption of the oil ultimately emits. In today’s blog, we are focused on the Process Method.