Oil & Gas - Maximising Recovery Programme (formerly SHARP) IOR Views

Attendees

I had the pleasure of attending this ATW on CO2 Sequestration or Carbon Capture and Storage (CCS) as proponents now prefer to call the issue.  There were 76 pre-registered attendees of whom 63 where from the US and Canada.  It is thought this high level of interest amongst US participants is because:

• Uniquely, the oil and gas industry has the knowledge and experience to make the process work, i.e. there is extensive experience of CO2 EOR, Acid Gas Injection and Enhanced Coal Bed Methane (ECBM) which involve Capture and Transport and to some degree, Storage.
• Growing concern at the grassroots is driving action at the State level to get round inaction at the Federal level.

By employer type, there were 29 attendees from oil companies, 19 from US/Canadian research laboratories and universities, 3 “regulators” from the US Bureau of Economic Geology and 2 Green/NGO lobbyists from the US organisations, Environmental Defense (www.edf.org) and the National Resources Defense Council (NRDC) (www.nrdc.org).

Presentations

The first talk was by Ken Calderia from the Department of Global Ecology at Stanford on “Climate Change Science” – is that a first at an SPE conference?  There were no objections to his presentation from the floor.

Sally Benson from Lawrence Berkeley gave an “Introduction to CO2 storage.”  She quoted heavily from the recent Intergovernmental Panel on Climate Change (IPCC) report – the technical summary is available at www.ipcc.ch/activity/ccsspm.pdf.  She said the main challenge is to find enough suitable large-scale saline aquifers as the pore space available in depleted oil and gas reservoirs will not be sufficient.  Benson and other speakers noted only the oil and gas industry has the skill set necessary to characterise these reservoirs and engineer the injection schemes.

Howard Hertzog of MIT spoke about “CCS Economics”.  The bottom line is 75-85% of the cost is the carbon capture, be it pre- or post-combustion.  If we can lower this cost, CCS becomes even more attractive.  With current capabilities, we can expect a 40% increase in the cost of electricity generated by CCS with a 90% reduction in CO2 emissions.

A variety of Oil Company speakers said what their companies were doing to reduce emissions, increase efficiency and look at business opportunities, etc.  To highlight competency in the Transport and Storage areas, there were talks on Acid Gas Injection, ECBM and several on CO2 EOR including the Weyburn project in Saskatchewan from EnCana.  Here the CO2 is captured from a power station by the North Dakota power company and piped over the border into Canada.

Although familiar to many in the audience, the talk by Tore Torp of Statoil on Sleipner was well received as a discussion of the first true large-scale offshore CCS project.  When faced with an annual tax bill of $50M/year to vent excess CO2 to the atmosphere, Statoil’s response was to process the wet gas stream, remove as much CO2 as possible and then inject it into the over-lying Utsira saline aquifer.  Since 1996, about 1 M tonnes/year has been injected and it has been estimated the Utsira formation could hold 100 times the volume of all of Europe’s power plants.  There are many more Utsira-like reservoirs worldwide.

Facilities at the In-Salah CO2 storage project in the Algerian dessert.  The principal objective of the project is to demonstrate that industrial scale geological storage of CO2 is a viable GHG mitigation option with long term assurance through cost-effective verification.

Iain Wright of BP spoke about two projects, one which is already underway and a second which could be sanctioned very soon.  Like Sleipner, In-Salah in the middle of the Algerian desert produces gas with a high CO2 content.  BP is partnership with Statoil and Sonatrach are processing the produced gas and re-injecting the captured CO2 into the aquifer which supports the gas.  Wright also discussed DF-1, the project to process Methane into Hydrogen and CO2 prior to combustion of the Hydrogen at a power plant in Peterhead, near to Aberdeen.  The CO2 will then be piped to the Miller field where it will be used for some incremental EOR but primarily for long-term storage.  Both these projects aim to capture the order 1 M tonne CO2/year.

David Hawkins of the NRDC told how in the US and China there are already plans to build 100s of coal fuelled power stations – security of supply using local fuel.  Ten years in the planning with an operational life of 50-80 years, these will be major CO2 sources for the whole of this century.  He did note the US developers are mindful they may need to build CCS into their plans.

Oh and the Texas regulator has just received their first proposal for a new Nuclear plant in over 20 years!