Economic viability is one of the greatest challenges to the effective deployment of CCS technology on a wide-scale; but by using captured CO2 in Enhanced Oil Recovery (EOR) projects, some of this economic burden may be alleviated (Ferguson et. al, 2009). EOR projects have been underway since the 1970’s, and entail the injection of CO2 into largely depleted oil wells, whereby the CO2 lowers the oil viscosity and allows this residual oil to be removed from areas where it was once trapped between pore spaces. It is estimated that 87.1 billion additional barrels of oil may become recoverable in the United States with the use of CO2–EOR. The added advantage of this procedure is the storage of injected CO2 in the newly depleted oil field. Coal burning power plants equipped with CO2 capture technology could sell their CO2 to EOR project operators at a price of approximately $25 to $35 per metric ton, which would offset the cost of generating power with CCS by approximately $17 to $24 per MWh, thereby facilitating a more widespread installation of this technology across America’s power plants.— Shanna Hoversten
Ferguson, R., Nichols, C., Van Leeuwen, T., Kuuskraa, V., 2009. Storing CO2 with Enhanced Oil Recovery. Energy Procedia 1, 1989–1996.
R. C. Ferguson and colleagues at Advanced Resources International and the U.S. Department of Energy, used a base case scenario to model the propensity for coordination between EOR activities and CO2 capture activities. First they looked at the conventionally recoverable versus the “stranded” crude oil resources in the U.S.; then they further broke this down by estimating what proportion of the stranded reserves could be recovered using EOR. Ferguson et. al used a base case to evaluate CO2–EOR potential using an oil price of $70 per barrel and a CO2 cost of $45 per metric ton, differentiating between oil that is technically recoverable and oil that is economically recoverable. Based on these numbers, the amount of CO2 that could be purchased from capture technology equipped power generating plants was calculated, and the potential economic gain of these plants was estimated. Finally, Ferguson et. al calculated that oil produced by CO2–EOR would be approximately 70% “carbon free” given the trade-off between CO2 sequestered and CO2 released by burning the oil.
The potential for extensive use of CO2–EOR technology has many positive implications for CCS deployment. The revenue offsets and the value for carbon abatement could allow for 40% of the new coal-fuelled power capacity built between now and 2030 to install CCS. In real terms, this means that sales of captured CO2 emissions by power plants build after 2020 would support the installation of 33 additional CCS equipped plants by 2030. CO2–EOR projects provide a considerable “value added” market for the sale of CO2 emissions, thereby defraying some of the costs of installing and operating CCS technology. Although the CO2 would be used to facilitate the extraction and continued use of oil, a CO2 intensive energy source, the storage of the CO2 within the oil field would help offset some of the oil’s emissions, and even more importantly, using CCS in this economically lucrative industry would help support early market entry of CCS technology in the coal-fuelled power sector, providing a foundation for future emissions reductions. Additionally, storing CO2 with EOR would help bypass two present legal barriers to geologic sequestration: establishing mineral (pore space) rights, and assigning long-term liability for the injected CO2. The promotion of CO2–EOR is a promising avenue for advancing the development and deployment of CCS technology.