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.

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.

To access the remainder of The Air That I Breathe, Part 7 - Reality or Myth? Carbon-Negative Crude from EOR you must be logged as a RBN Backstage Pass™ subscriber.

Full access to the RBN Energy blog archive which includes any posting more than 5 days old is available only to RBN Backstage Pass™ subscribers. In addition to blog archive access, RBN Backstage Pass™ resources include Drill-Down Reports, Spotlight Reports, Spotcheck Indicators, Market Fundamentals Webcasts, Get-Togethers and more. If you have already purchased a subscription, be sure you are logged in For additional help or information, contact us at info@rbnenergy.com or 888-613-8874.