A CO₂ Infrastructure for the North Sea

Hugh Sharman (hms@inco2.com) of INCO₂ Aps (together with co-authors Neils Peter Christensen, Nicholas Riley and Erik Lindeberg) has contributed this visionary article which puts forward the case for constructing a CO₂ distribution system for the North Sea which enables collection of CO₂ from onshore power-generation and other industrial plants (which would otherwise be emitted to the atmosphere) and distributes it offshore for use as an EOR agent and for sequestration in mature oil and gas fields. Click here for more details about the authors

Summary

On 6 December, 2002, the European Environmental Agency (EEA, http://www.eea.eu.int/) published Environmental Issue Report, No 33, “Greenhouse gas emission trends and projections in Europe”.  The conclusion of many experts is that the EU-15 will have great difficulty in collectively meeting its obligation for an 8% reduction in greenhouse gas emissions in a timely manner.

By late 2002, the actual reduction achieved, relative to 1990, was only 0.5%.  A few days later, on 10 December, the EU’s Council of Ministers agreed to set rules for the first trans-national government carbon trading scheme in the World.  These include penalties for the failure of licensed emitters to meet Governmental targets.  The penalties are € 40 per tonne for non compliant emitters in the period 2005 through to 2007 and €100 per tonne from the beginning of 2008 (full text at http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/02/1832|0|RAPID&lg=EN;).

This latter value aligns favourably with the UK Government’s “Renewables Obligation” carbon avoidance measures placed on UK electricity generators, which at £30/MWhe, costs roughly €120/t CO₂ avoided.

€40 - 100 could therefore be the possible value placed by governments and the EU for sequestered CO₂ when used during the operation of enhanced oil recovery (EOR), if geological storage became accepted as a valid emission reduction strategy.  In turn, the reduced net cost for delivered CO₂ could make CO₂ for EOR attractive to oilfield operators.  These are faced with declining production and large decommissioning costs, in most of the giant oilfields of the North Sea.

In this article, the authors present the case that a CO₂ infrastructure, built between 55° N and 62° N, could deliver and sequester up to 40 million t/y CO₂ from industrial installations around the North Sea Basin while producing up to 120 million b/d incremental oil which would otherwise be permanently lost after decommissioning.

During the lifetime of the EOR operations, up to 1.6 billion t of CO₂ would be permanently sequestered and  around 5.3 billion incremental barrels of oil would be produced, delaying decommissioning and saving many thousands of high quality jobs. Natural gas and LPG production would also improve because the CO₂ could be substituted for these lean hydrocarbons which are currently re-injected as an EOR technique,  and because the CO₂ is an effective solvent for lighter hydrocarbons that otherwise would be trapped in the reservoir.

The effectiveness of gas injection has been demonstrated widely in Norway. Early injection in some Norwegian reservoirs has resulted in record-high yields of oil in the Statfjord formation on the Statfjord field and the Alpha formation on the Oseberg field, where yields between 85 and 90% can be expected. At present, approximately 40% of all produced Norwegian hydrocarbon gas is being injected.   The NPD estimates that 20% of all such injected gas will be permanently sequestered, a huge loss to the Nation.

Many of the injection projects started when there was no infrastructure for gas export and when the gas price was lower. Today gas is sold for a higher price than oil (per energy unit) and a comprehensive infrastructure for gas allows gas export to market from most Norwegian fields.  It therefore makes sense to substitute CO₂ for methane as soon as possible, where this is going to be cost efficient.

After all the incremental oil has been extracted, the authors argue that the CO₂ infrastructure can be used to deliver CO₂ into other geological structures for many decades to come.

Click below to read the substantive sections of this article.