CO2 enhanced oil recovery for decarbonization
For example, jet fuel is very difficult to replace due to the low energy density of batteries and the high cost of alternatives like hydrogen, making an upstream solution the only option until technology and costs. evolve. Thus, making the most of the existing energy supply chain through decarbonization is a realistic and cost-effective option for the medium-term investigation and warrants an investigation.
Initial efforts to decarbonize oil include shifting portfolios to inherently less emitting sources, but further reductions quickly become more difficult. Improved production efficiency – such as reduced flaring and ventilation, economies of scale and better operations – can also lead to significant carbon savings; but for large producers, these upgrades have already been implemented as general cost-cutting measures. Downstream decarbonization opportunities, where carbon is physically removed from fuels to produce blue hydrogen and other energy carriers, will take time to become truly scalable. As the removal of carbon from the supply chain and other industries matures, it also creates a new problem regarding CO2 sequestration. One option that both reduces the carbon intensity of oil and enables CO2 storage is enhanced oil recovery using CO2 (CO2-EOR). The King Abdullah Petroleum Studies and Research Center (KAPSARC) took an in-depth look at this promising option and held a workshop in January 2019 with the International Energy Agency to discuss the technology and the opportunities it offers.
Operation and opportunities
Naturally recoverable oil in a reservoir typically represents about 20 percent of the available resource, but injection of CO2 can reduce crude viscosity and stimulate additional production of up to 13 percent. Not all tanks are suitable for this method, but many meet its minimum pressure and temperature requirements. Assuming complete separation and reinjection of the produced CO2 with the crude, the net carbon extracted from the reservoir is lower per barrel, thus avoiding the need for new resources and the emissions associated with their development.
In normal CO2-EOR operations, the amount of CO2 injected into the reservoir to improve production is kept to a minimum. CO2 is a cost and supply is often limited, so there is little incentive to increase injection rates. However, as more CO2 becomes available from anthropogenic sources through carbon capture, the opportunities to increase these injection levels become viable. Conventional operations use 300 kg of CO2 per barrel produced, but it is possible to inject 600 kg per barrel if the intention is to maximize both the CO2 stored and the oil recovered. 1 The impact of injecting 600 kg of CO2 per barrel means that the carbon produced can technically become negative in some areas. This is the case for several OPEC producers, including Saudi Arabia and Kuwait, because their crude is relatively easy to produce on a large scale with minimal energy investment.
CO2-EOR is a common and commercially viable process. It has been used for decades in the North American energy industry, but it can be used around the world. A recent article published by KAPSARC examined the possibilities of using CO2-EOR to reduce the carbon impact of oil production. The study focused on non-North American resources, as the technique is already well developed in this region, but generally relies on geological sources of CO2 that negate climatic benefits. Study results indicate an immediate technical opportunity to store over 40 Gt (gigatonnes) of CO2 with existing source-well pairs, and 6 Gt could be economically stored at an oil price as low as $ 50. Under less strict criteria, where projects are not limited by local CO2 supply, the total storage potential increases to more than 200 Gt, in line with estimates produced by others.
The global distribution of suitable CO2-EOR reservoirs is robust, with the best development locations in Russia and China (due to stationary sources near the reservoirs) and the highest total storage potential for future development located around the Persian Gulf.
The supply of CO2 is a major constraint to the expansion of CO2-EOR, and this is mainly due to the limited nature of the capture and transport infrastructure available. Without the use of geological sources, there are few reserves of high concentration CO2. Hydrogen, ammonia, ethanol, natural gas and urea plants produce waste streams of CO2 that can be used with minimal processing, but not in the volumes needed to promote mass adoption. Lower concentration sources like power plants require extensive washing, but may become key resources in the future.
When it comes to transportation, building dedicated pipelines for a single source-well pair often does not make economic sense because the distance and volumes involved are insufficient to justify the costs. For most countries looking to manage captured CO2, a grid approach will be needed to connect multiple sources and sinks for collection and redistribution. The responsibility for the construction of the network remains a question, where it is indeterminate whether a legal liability on the emitter, the demand of the oil producer or an economic incentive for a pipeline operator will drive the development. Ultimately, a network of this magnitude can be treated as a public good or service and require government support if private entities are unwilling to invest.
Beyond resolving the CO2 supply constraint, additional factors could increase the adoption of CO2-EOR worldwide. Locally, the tax regime of an oil-producing country can have an influence, qualifying the storage of CO2 as an exempt income stream if royalties on oil production are the main source of government revenue. Direct impacts include the price of oil, with revenues from additional production reducing the CO2 breakeven point to justify an EOR project. A CO2 price can also drive adoption, assuming emitters are willing to pay more for storage. Finally, tax credits can be useful in creating the conditions for EOR growth by indirectly encouraging storage, much like Section 45Q of the United States Tax Code.
Carbon accounting options
Accounting standards for CO2 emissions and storage may make the idea that crude produced via CO2-EOR is a controversial carbon reduction option, due to the fact that the CO2 emitter typically claims credit for any mitigation. The carbon sequester is often treated as a service provider for the emitter, and not as a full partner in reducing emissions. In this case, the only reward for CO2-EOR is in the form of payments for stored CO2 and additional oil revenues. However, there are options that could be more effective in creating favorable conditions with the risk of double counting carbon impacts.
First, a new storage credit system has been proposed that would reverse current thinking on carbon mitigation. Negative emission technologies will be needed to meet our climate goals, and current reduction programs make it difficult to go below zero. By providing credit to verified units of stored CO2, it is possible to encourage the development of carbon capture, use and storage technologies and to reduce future costs. CO2-EOR is an excellent candidate to launch this type of device.
Second, in economies that depend on significant hydrocarbon exports for income generation, the value of ‘green oil’ is a competitive advantage, securing market share and meeting the demands of end markets with established carbon legislation. . The ability to extend the life of their primary income stream, along with the coincidence of frequent state involvement in emissive industries, indicates that credit for mitigation could be allocated to oil producers for the export with their products.
Finally, if an exporter switches to the production of blue hydrogen or another carbon-free energy carrier in the future, the benefits of CO2-EOR multiply. In addition to extending the long-term viability of oil revenues, the challenge of CO2 supply and transport is resolved, as the co-location of hydrogen production with crude production makes EOR a autonomous system.
Although CO2-EOR technology is well established, it has not been used extensively outside of North America. The specific conditions regarding geology, CO2 availability, economics and local politics have kept interest in this approach minimal compared to interest in easier and cheaper options. As these factors, along with other concerns such as sustainability of supply and carbon impacts, evolve, CO2-EOR is likely to become a frontline option as our system transitions. energetic. Large, low-cost producers (like UAE and Saudi Arabia) are most likely first to adopt, as their margins allow investment, but other places with high CO2 taxes (Norway, Europe), or the need to secure supplies (China) will also play a role in wider growth.
Originally posted by Oxford Institute for Energy Studies.
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