Is There a “New Dawn” for CO 2 -EOR?

1. Is There a “New Dawn” for CO2-EOR? Presented at WY EOR task force meeting July 25, 2006 Casper, WY Dag Nummedal Colorado Energy Research Institute Colorado School of Mines Golden, CO

2. View of the SPE Forum, Broomfield, June 30, 06 • Consensus is yes! • Large amounts of CO2 will be generated in the future (GTL, coal gasification, coal to liquids, heavy oil SAGD, gas fields, oil shale); supply for EOR will increase • CO2 is valuable commodity for EOR purposes. Now scarce in the US • CO2 is waste for sequestration folks – resource to EOR (different ‘drivers’) • Costs/Fiscal regimes will evolve to make CO2 EOR attractive; e.g. cap and trade

3. CO2 for EOR in the Rocky Mountains Present: use ‘natural’ CO2 for EOR Goal: use power plant CO2 for EOR and sequestration

4. Wyoming CO2 Budget (’03) CO2 Production LaBarge: 9.7 MM tons/yr Madden: 1.2 MM tons/yr Power plant release: 58 MM tons/yr CO2 Requirements OOIP in WY candidate reservoirs: 8 BBO CO2 flooding recovers 10 -15% of OOIP EOR potential: 0.8 – 1.2 BBO CO2 required: 460 – 700 MM tons total

5. A Glimpse of the Future: Coal Burning Power Plantsw/ Carbon Capture British Consortium to Generate Clean Electricity from Hydrogen BP press release, June 30, 2005. BP, ConocoPhillips, Shell and Scottish and Southern Energy (SSE), have announced that they are to commence engineering design of the world's first industrial scale project to generate 'carbon-free' electricity from hydrogen. Raw material: natural gas. Main product: H2 as fuel for turbine for electricity. CO2: Pipelineto Miller oil field, 240 km offshore. Pet Coke for H2 and CO2-EOR BP press release, February 14 2006. Carson, CA BP and Edison Mission Group (EMG), a subsidiary of Edison International, plan on building a new $1 billion, 500 MW hydrogen-fueled power plant in California, which, while not using renewable energy, will generate clean electricity and sequester its carbon dioxide (CO2) emissions.   Raw material: petroleum coke. Main product: H2 to fuel gas turbine for electricity. CO2: Capture 90% of emissions; pipeline to an oil field for CO2-EOR.

6. Global Growth in CO2-EOR Projects Announced Feb. 9, 2006 Shell and Statoil have started developing the world’s largest project to date using carbon dioxide (CO2) for enhanced oil recovery (EOR) offshore. 2 to 2.5 million tonnes of CO2 annually in two different fields • 860 MW gas-fired power plant and methanol facility in Mid-Norway. • The plant will be fueled by gas from offshore fields – Draugen and Heidrun. • The project will depend on a government funding and involvement. • The US Department of Energy projects that carbon-dioxide capture EOR could more than quadruple US domestic oil production.

7. Questions?

8. Japan’s CO2 Storage Commitment • CLIMATE: Japan to establish underground CO2 storage • Japan plans to set up facilities around the world to capture carbon dioxide from industrial operations and store it underground, the Japanese Ministry of Economy, Trade and Industry announced yesterday. • The ministry said it aims to use a CO2 capture and storage technology called CCS that reduces CO2 emissions into the atmosphere by 200 million tons per year, a sixth of current domestic CO2 emissions. Japan would store half of the CO2 in country and the other half abroad. • Not only does Japan hope to reduce its own emissions from CCS, it hopes to employ the same technology outside of Japan alongside natural gas production. The ministry said it hopes to start obtaining carbon credits from developing countries with CCS technology by 2010. • Pending international rules should establish how to count developed nations' CO2 reduction using CCS technology in developing countries along with developed nations' own reductions (Japan Times, June 20).

9. Japan’s Major Storage Comitment - 2 • Burying CO2 not 'silver bullet' to combating global warming, expert says • While energy firms around the world are heavily investing in projects to bury carbon dioxide, it is a costly venture that has the overall effect of a pinprick in the world's total emissions, an International Energy Agency expert said yesterday. • "It's expensive ... this can be one solution among many to global warming [but] it's not going to be a silver bullet," Kelly Thambimuthu said during a carbon dioxide conference in Trondheim, Norway. • Projects in Norway, Australia, Scotland and the United States tout goals of burying as much as 15 million metric tons of CO2 per year, a fraction of the 25 billion metric tons of emissions globally every year. A 500-megawatt coal-fired power plant emits about 3 million metric tons per year. • Additionally, the high cost of storing CO2 underground, when compared with the cost of carbon credits, does not make storage cost-effective. Thambimuthu said that in Europe for storage to be economically viable the cost for a carbon credit would have to rise from its current $18.99 per metric ton of CO2 to at least $30 per metric ton or higher (Alister Doyle, Reuters/New Zealand Herald, June 20).

10. Principles Behind Miscible CO2 Flooding

11. CO2 flooding works: History of CO2 – EOR at two Wyoming Oil Fields

12. CO2 fingering Edge of salt dissolution Weyburn Time-Lapse (2002-2000) N RMS Amplitude % Difference (2002-2000) Tom Davis, CSM

14. Global and US Capacity for CO2-EOR Global: 120 GtCO2 US: 12 GtCO2 Current rates of CO2 release: World: 26 GtCO2 Carbon Dioxide Capture and Geologic Storage; Battelle, April 2006 JJ Dooley (Lead Author), RT Dahowski, CL Davidson, MA Wise, N Gupta, SH Kim, EL Malone

15. Why we need to do this: CO2 from 400,000 – 0 ybp Today 375 ppm

16. CO2 _EOR projects in pipeline • Gas Injection & Environmental Driven Projects? • Most New Projects in North America – 15+, But projects in the pipeline in many areas: Oman, North Sea, North Slope, Brazil, Malaysia, Tengiz, etc • Several pure sequestration projects coming • Source gas limitations. Projects occurring where there is gas, geologic gas, cheap waste gas, no market for produced gas: How do we increase available gas? • Permian Basin successful due to concentration of large fields, low reservoir temperature and good residual oil target • Pipeline and infrastructure built during “irrational exuberance” of 1980’s (could we use some “rational” exuberance?) • CO2 can be successfully contained – no leaks to surface.

17. OilProduction Base Waterflood Horizontal Infill Miscible CO2 Flood 8000 7000 6000 5000 Production (m³/d) 4000 3000 2000 1000 0 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Year

18. CO2 Injection Operation - Weyburn Hz Producers Hz CO2 Injector Midale Anhydrite Marly CO2 & Oil CO2 CO2 Oil & CO2 Vuggy Water Frobisher Vertical Producer Vertical Water Injector

19. The Economics of Adding Reserves by CO2 Flooding A: Average finding and development cost from 1995 to 1999, on different ‘continents’. B: Average finding, development, and production cost in the US from 1995 to 1999 ($10, left column), compared to cost per barrel of reserves developed for CO2 flooding ($6, right column). From Bradley, 2001.

20. Weyburn Field SASKATCHEWAN HUDSON BAY ALBERTA MANITOBA EDMONTON PRINCE ALBERT SASKATOON CALGARY REGINA CANADA WINNIPEG WEYBURN BRANDON U.S.A. NORTH DAKOTA MONTANA HELENA BISMARCK PIERRE SOUTH DAKOTA WYOMING SEDIMENTARY BASIN

21. Regina Weyburn Manitoba Estevan Saskatchewan Canada USA Montana North Dakota Bismarck Beulah The Source of CO2 • Dakota Gasification Company • 250 mmscfd CO2 by-product of coal (lignite) gasification • 95 mmscfd (5000 tonnes/day) contracted and injected at Weyburn • EnCana currently injects 120 mmscfd (i.e. 21% recycle)