Storing CO2 through Enhanced Oil Recovery

© OECD/IEA 2016
Storing CO2 through Enhanced Oil
Recovery
International Energy Agency Webinar
14 January 2016

© OECD/IEA 2016
Storing CO2 through EOR – EOR+
IEA Insights Paper released early in
November 2015
Objectives:
 Estimate the global technical
potential and distribution
 Explore economics of storage cases
 Consider the emissions reduction
potential
 Options to overcome barriers to
EOR+
 Analysis by the IEA and partners
Rystad Energy and StrategicFit
2IEA EOR+ Webinar, 14 January 2016

© OECD/IEA 2016
Webinar Agenda
1 Introduction and motivation Kamel Ben Naceur (IEA)
2 Basis for the EOR+ assessment and key results Sean McCoy(IEA)
3 Technical potential for EOR+ Nils-Henrik Bjurstrøm (Rystad
Energy)
4 Illustrative project-level economics Chris Jones (StrategicFit)
5 Emissions reduction potential and policy
barriers to EOR+
Sean McCoy (IEA)
6 Comments and perspectives on EOR+ Per Ivar Karstad (Statoil)
Steven Carpenter (UW-EORI)
7 Moderated Q&A Juho Lipponen (IEA)

© OECD/IEA 2016
Introduction and motivations
Kamel BEN NACEUR
Director, Sustainability, Technology & Outlooks
International Energy Agency

© OECD/IEA 2016
The IEA at a glance
 Inter-governmental body
founded in 1974;
currently 29 Member
Countries
 Provides policy advice
and energy security
coordination
 Covers whole energy
policy spectrum across all
major energy
technologies
5
 Key publications: World
Energy Outlook, Energy
Technology Perspectives,
Technology Roadmaps
 Enlarging the IEA via
association with major
emerging economies
IEA EOR+ Webinar, 14 January 2016

© OECD/IEA 2016
Energy technology collaboration
 IEA’s Energy Technology Network
includes 39 Energy Technology
Collaboration Programs
 Independent organisations
providing technology input to IEA
analysis

© OECD/IEA 2016
CCS is an essential part of a low-carbon portfolio of
technologies
 Increased ambition of the Paris agreement requires
larger removals by carbon sinks
 IEAGHG was established in 1991; IEA ramped-up CCS
activity around 2000 and formed a dedicated CCS unit
in 2010
7
CCS accounts for 13%
of cumulative
emissions reductions
in IEA 2DS scenario
against business as
usual.
Source: IEA ETP-2015

© OECD/IEA 2016
Storage through CO2-EOR (“EOR+”) is growing
in importance
 CCS has struggled to expand and meet expectations,
often for economic reasons
 Hence the tendency to look for ways to utilise captured
CO2 to offset capture costs
 EOR is by far the largest single use of CO2 today, but
typically injected CO2 is not monitored and verified for
storage
 IEA has therefore analysed a “change of paradigm”: how
CO2 storage and enhanced oil recovery could be co-
exploited  “EOR+”

© OECD/IEA 2016
Basis for the EOR+ assessment and key
results
Sean MCCOY
Energy Analyst

© OECD/IEA 2016
Storing CO2 through EOR
 CO2-flood Enhanced Oil Recovery (CO2-EOR) is widely
practiced in the United States and results in permanent
storage of CO2
 CO2-EOR is attractive because:
 Operators have over 30-years of commercial experience with
EOR
 It can slow declining oil production
 Regulations surrounding EOR are generally clear
 The infrastructure built today for EOR could compliment
development of saline aquifer sequestration in future (e.g. CO2
pipelines)
IEA EOR+ Webinar, 14 January 2016 10

© OECD/IEA 2016
Injected CO2 drives oil production, is produced
alongside the oil and recycled
Image: Global CCS Institute

© OECD/IEA 2016
CO2-EOR drives increased oil production from the
Weyburn Unit
Around 30,000 bbl/day total production, over 20,000 bbl/day due to CO2-EOR
Figure: Cenovus Energy/Malcolm Wilson, PTRC

© OECD/IEA 2016
Use of CO2-EOR has been growing steadily
Data: Kuuskra & Wallace,2014

© OECD/IEA 2016
Shifting from conventional EOR to EOR+
1. Site characterisation to collect information on overlying
cap-rock and geological formations, as well as abandoned
wellbores, and assessment of the risk of CO2 leakage of
from the reservoir.
2. Measurement of venting and fugitive emissions from
surface processing equipment.
3. Monitoring and enhanced field surveillance aimed at
identifying and, if necessary, estimating leakage rates from
the site and assessing whether the reservoir behaves as
anticipated.
4. Well abandonment processes that increase confidence in
long-term containment of injected CO2, in particular to
ensure they withstand the corrosive effects of CO2-water
mixtures.

© OECD/IEA 2016
And, it (should) go without saying...
CO2 produced for the sole purpose of using it in CO2-EOR
(e.g., produced from natural accumulations) can not, in
general, deliver a climate benefit
and
Captured CO2 must be a relatively low-value byproduct of
power generation or industrial production (e.g. fertilizer,
hydrogen, cement, iron & steel)

© OECD/IEA 2016
Report considers of three EOR+ operational
models
Scenario Incremental recovery
% OOIP
Utilisation
tCO2/bbl (mscf/bbl)
Conventional EOR+ 6.5 0.3 (5.7)
Advanced EOR+ 13 0.6 (11.4)
Maximum Storage EOR+ 13 0.9 (17.1)
 All projects undertake the four storage-focused activities
 CO2 is assumed to be captured from anthropogenic
sources for the purpose of avoiding emissions.

© OECD/IEA 2016
Large technical potential for storage
Around half of the storage required in the 2DS could come from
Conventional EOR+… and more than twice the needed capacity
through Advanced EOR+

© OECD/IEA 2016
Potential for incremental production is
equally large
Technical potential for large incremental oil production under
Advanced and Maximum Storage EOR+… large proportion of oil
demand under the 2DS

© OECD/IEA 2016
The NPV of Advanced EOR+ comes out ahead
under all ETP scenarios
As a result of both increased storage and production, and despite
added costs, Advanced EOR+ has the highest NPV under all ETP
scenarios

© OECD/IEA 2016
EOR+ can deliver emissions reductions, but
will need supportive policy
Emissions
 Emissions from fossil fuel
combustion can be offset
by higher CO2-utilization,
i.e., Advanced EOR+
 Even Conventional EOR+
can bring a climate
benefit through
displacement
20
Policy
 Expanding the use of EOR –
regardless of the “+”
 Encouraging adoption of
practices to “store” CO2
consistent with the
requirements of the climate
change mitigation
objectives
 Utilizing more CO2 as part of
the EOR extraction process.

© OECD/IEA 2016
Technical potential for EOR+
Nils-Henrik BJURSTRØM
Senior Project Manager, Consulting Services and
Head of exploration analysis
Rystad Energy

The chart outlines the process
that identifies candidate fields for
CO2 storage during CO2-EOR+
and calculates CO2 storage
potential.
The starting point is all discovered
oil and gas fields in the world.
Relevant data for all fields that are
either abandoned, currently
producing or expected to start
production before 2025, are
moved into an excel book where
the screening takes place.
The candidates for CO2-EOR+
are the fields that match the
screening criteria (see details on
the following pages and
appendix). Additional production
potential and CO2 storage
potential are then calculated per
field. The calculated data is
imported back into UCube and
made available for further analysis
through the Cube browser user
interface. Data on the largest
fields in terms of storage potential
per USGS province is exported to
excel for further analysis.
Overview of screening methodology
All UCube
Assets
All UCube
Fields
Discovery has
been made
Medium-term
commercial
fields
- Abandoned fields
- Producing fields
- Production start before
2025
~12000
assets
Fields with
CO2-EOR
potential
Apply screening criteria
~4600 assets
Storage
potential
per field
Apply storage potential
calculation
Additional UCube
value items
Ucube
RystadEnergyUpstreamDatabase
Excel
UCube
Excel tables with
top 10 fields per
producing USGS
province

Right diagram illustrates the
calculation of scores for miscible
and immiscible flooding.
.
The Minimum Miscibility Pressure
(MMP) is calculated from crude
API and reservoir temperature.
The asset is suitable for miscible
CO2 flooding if the reservoir
pressure is larger than the MMP.
The final score is the product of
the individual scores for the three
additional criteria.
The initial gas/oil criterium is used
to ensure that the candidate fields
do not have gas cap or significant
volumes of associated gas.
The criterium for remaining oil
saturation comes from literature
study, and the criterium for
effective mobility/viscosity comes
from physical considerations.
The effective mobility screening
criteria is based on the Paul and
Lake model of mobility ratio of
miscible flooding being a product
of effective mobility, heterogeneity
factor and gravity factor***. No
information about gravity or
heterogeneity is available, so the
effective permeability ratio will be
used as a proxy for mobility ratio.
Screening process
MMP
API
Temperatur
e
Miscible flooding criteria
Initial gas/oil ratio <
10%
Remaining oil saturation >
30%
Effective mobility < 5
Immiscible flooding criteria
Initial gas/oil ratio < 1
%
Remaining oil saturation >
50%
Viscosity <
10
Confidence score
Miscible flooding
Confidence score
Immiscible
flooding

Right table summarizes the
parameters used to calculate the
additional production and CO2
storage potential for the four CO2-
EOR practices discussed in the
introduction chapter.
Additional production is calculated
as a percentage of original oil in
place (OOIP), and CO2 storage is
calculated as additional
production times storage capacity
per additional barrel.
The storage capacity is assumed
to be proportional to CO2 density
at reservoir conditions.
Right scatterplot shows calculated
CO2 density per candidate field
for CO2-EOR.
The extra investments in the
maximum storage practices are in
this study assumed to have effect
on storage only. A large part of
the extra investments will likely
take place after production
cessation.
More details about the storage
capacity calculations are given in
the appendix.
CO2 storage capacity = (Additional production) x (CO2 sequestered per additional
barrel)
Conventio
nal EOR+
Advanced
EOR+
Maximum
storage
EOR+
Immiscible
Additional production
(% of OOIP)
6,5 % 13% 13% 13%
CO2 storage capacity
at 1500 m
(Tonne per additional
bbl)
0,3 0,6 0,9 0,65

Right char show global CO2
storage potential split by
onshore/offshore.
In total, 71% of potential belongs
to onshore fields.
114 Gt out of the 390 Gt total
storage capacity is in offshore
fields.
70% of storage potential belongs to onshore fields
CO2 storage potential split by onshore/offshore
Gigatonnes
14
58
87
114
276
49
196
294
18
71 390
Conventional EOR+ Maximum
storage
Immiscible Missing data Total
Onshor
e
Offshor
e
71%

Right bar chart shows CO2
storage potential per geographical
region by CO2-EOR practices.
Middle East and Russia represent
58% of the global potential while
North Africa and Central Asia
accounts for 11% and 6% of
global potential, respectively.
Central Asia has higher fraction of
fields with potential for immiscible
flooding than other regions.
More than half of CO2 storage potential is in Middle East and Russia
CO2 storage potential per geographical region
Gigatonnes
0 50 100 150
Middle East
Russia
North Africa
Central Asia
South America
West Africa
North America
Western Europe
East Asia
South East Asia
Eastern Europe
South Asia
Australia
Conventional EOR+
Advanced EOR+
Maximum Storage EOR+
Immiscible
76 % of
potential
Middle
East;
37%
Russia;
21%
North
Africa;
11%
Central
Asia; 7%
Other;
24%

Global storage potential map
High confidence
score
Medium confidence
score
Key

© OECD/IEA 2016
Illustrative project-level economics
Chris JONES
Senior Consultant
StrategicFit

Copyright © 2016 by StrategicFit. All rights reserved. 29
• We tested the different EOR practices against IEA oil and CO2 price scenarios
for a hypothetical CO2 EOR project- a 1bnbbl STOIIP onshore oil field
• The projects were identical apart from the EOR+ operational model
This work was carried out in 2014/5 with the IEA to test
the economics of different EOR practices
Method Increase in Oil
Recovery (%OOIP)
CO2 storage
rate– T/bbl
Conventional EOR+ 6.5 0.3
Advanced EOR+ 13 0.6
Max Storage 13 0.9

CO2
We costed 5 core functional activities to examine the
different EOR practices
Oil/Gas/Water
SeparationCO2 in
Well stream – Oil,
water, gas CO2
Export Oil
Gas, CO2, water
CO2/Gas separation and
clean up
Recycled CO2
re-injected
Export Gas
Reservoir
CO2 Injection
CO2 Recycling
compression
Produced water
Long term
Monitoring
Storing CO2 through Enhanced Oil Recovery: Figure 2

• Phase 1
• CO2 begins to be injected and incremental oil production is ramping up
• Phase 2
• Plateau production before CO2 breakthrough
• Phase 3
• Exponential decline of the incremental oil production
We considered three phases of incremental oil production
after CO2 is first injected
Incremental
Oil
Production
Phase 1 Phase 2 Phase 3
Incremental Oil Production

• Phase 1
• New patterns are being brought online; CO2 injection increases
• Phase 2
• First breakthrough occurs, earlier for Conventional EOR+ than Advanced
EOR+/Max Storage
• Phase 3
• CO2 is produced with the oil and is recycled at all wells
The CO2 required for EOR is initially purchased but
gradually recycled volumes dominate
Incremental
Production
Phase 1 Phase 2 Phase 3
CO2 utilisation compared to Oil production
Annual CO2 Injected
Annual Purchased CO2- Advanced EOR+/MaxStorage
Annual Purchase CO2 -Conventional EOR+
Incremental Oil Production
Recycled CO2

• We considered “CO2 supply price” from the perspective of an EOR operator
• We used the global averages of IEA 2DS,4DS and 6DS scenarios for CO2
emission penalties and a $40/T cost for capturing to calculate a supply cost-
i.e. what an EOR operator would have to pay (or receive) for CO2
How CO2 prices evolve will have a major impact either as
a revenue stream or as a cost
• In 4DS and 6DS the cost of capture is greater than any emission penalty, the CO2
would be sold to an EOR operator (as is typical today)- it is a cost
• In the 2DS the emissions penalty is greater than the cost of capture so an EOR
operator would be paid to verifiably store the CO2 – it is a revenue
Average CO2 Supply prices under three scenarios

• In a 2DS, Max Storage & Advanced EOR+ gain revenues by storing extra CO2
• In 4DS & 6DS Max Storage looks worse due to additional CO2 purchasing costs
• All scenarios have oil prices greater than $90/bbl, rising to $150/bbl in 6DS
The EOR Plus strategy appears optimal for each of the
future scenarios
NPV of illustrative CO2-EOR project for different ETP scenarios and EOR practices

• Increased oil revenues of Advanced EOR+ outweigh additional costs compared to
Conventional EOR+
• Extra CO2 revenues in Max Storage can’t overcome the cost increase as there is
no further incremental oil
What drives the difference between different practices in
a 2DS world?
PV Waterfall for a 2DS Global Scenario

What would Carbon and Oil prices have to be to make
each strategy best?
Illustrative oil and CO2 price impact on choice of EOR practice

• Dramatic CO2 price changes are needed to influence the best EOR practice –
oil price is a much stronger driver
• Especially in the low price environment there are therefore many stumbling
blocks for operators
If it looks good then why isn’t it happening?
CO2 EOR requires a huge
capital investment but there
is uncertainty about
incremental recovery
EOR operator challenge Stumbling blocks
IOCs are hugely cutting capital
expenditure. Risky, EOR work
cannot compete and is
dropped. Will NOCs lead?
Where do we get CO2?
There is rarely a stable
supply and it is not a
tradable commodity
Government support is
needed for carbon capture
but is fickle e.g. UK CCS
project cancellation.
How can we deliver projects
reliably and at low cost?
Without projects the industry
doesn’t get technology, supply
chain & infrastructure talent/
experience to get costs down

© OECD/IEA 2016
Emissions reduction potential and policy
barriers to EOR+
Sean MCCOY
Energy Analyst

© OECD/IEA 2016
The net emissions impact of CO2-EOR is
contentious
CO2-EOR is “no more a climate solution than drilling in ultra-
deepwater, hydro-fracking, or drilling in the Arctic Ocean.” –
Greenpeace
 Multiple studies have looked at the emissions impact of CO2-EOR
operations, e.g.:
Aycaguer et al., 2001; Khoo & Tan, 2006; Suebsiri et al., 2006; Jaramillo et al.,
2009; Falitnson & Guner, 2011; Wong et al., 2013;
Cooney et al., 2015
 On first inspection, studies seem to reach different conclusions;
however, they make very different choices of boundaries,
approaches and assumptions
 They have been based on limited data from real operations

© OECD/IEA 2016
Important observations from past life-cycle
assessment research
1. Emissions depend on boundaries:
a) Including combustion emissions from oil makes business-as-usual
(BAU) CO2-EOR a net emitter
b) Changes to design and operation of BAU CO2-EOR could decrease
the CO2 footprint
2. If energy-related emissions that would otherwise be
produced from a functionally equivalent system are
displaced, CO2-EOR reduces emissions
3. Emissions reduction efficiency is a function of energy
displacement and CO2 utilization
a) Displacement of CO2-intensive power and oil results in a larger
emissions reduction than would otherwise occur

© OECD/IEA 2016
The boundaries used to assess emissions
from CO2-EOR matter
41
CO2-EOR Operations
Crude Oil Transport Petroleum Refining
Petroleum Product
Transport and Use
Fuel or Feedstock
Supply Chain
Production Process
with CO2 Capture
CO2 Transport
Product Transport
and Use
The emissions, to what they can be allocated, and
the way in which they are allocated depends
heavily on the boundaries (Skone, 2013)

© OECD/IEA 2016
Regardless of boundaries, storing more CO2
per barrel is beneficial for emissions
42
CO2-EOR Operations
Petroleum Product
Transport and Use
-0.80 -0.60 -0.40 -0.20 0.00 0.20 0.40
Conventional+
Advanced+
Maximum
Net Emissions (tCO2/bbl)
Petroleum Product
Displacement*

© OECD/IEA 2016
Widespread EOR+ will impact the price and
demand for oil
1. How much production is displaced by CO2-EOR?
2. How much additional production results from CO2-EOR?
3. What is the resulting net impact on emissions?

© OECD/IEA 2016
Under the IEA 6DS scenario, about 20% of
production would be additional
 More costly production is displaced: this is often, but not
always, more carbon intensive (Gordon et al., 2015)
 Hence, we assume a “like-for-like” displacement.

© OECD/IEA 2016
With displacement, even Conventional EOR+
can deliver a benefit
45
CO2-EOR Operations
Petroleum Product
Transport and Use
Petroleum Product
Displacement*
-0.80 -0.60 -0.40 -0.20 0.00 0.20 0.40
Conventional+
Advanced+
Maximum
Net Emissions (tCO2/bbl)*Conventional crude of about 470 kgCO2/bbl (Gordon et al.,
2015); 80% displacement.

© OECD/IEA 2016
Three main challenges for EOR+
1. Expanding the use of EOR – regardless of the “+”
2. Encouraging adoption of practices to “store” CO2
consistent with the requirements of the climate
change mitigation objectives
3. Utilizing more CO2 as part of the EOR extraction
process.
Important to note that there are other, more
challenging legal issues that exist in the US

© OECD/IEA 2016
Expanding the use of CO2-EOR
Problem: CO2-EOR projects may be relatively unattractive from a
financial perspective because:
1. CO2-EOR requires a large capital investment late in the life of a
field – particularly for offshore projects.
2. The increased recovery from CO2-EOR is captured over a long
period of time and, thus, its NPV is diminished.
3. Each application of CO2-EOR is unique and requires costly field
pilot tests to optimise.
Solution: Changes to fiscal regime, provision of tax credits

© OECD/IEA 2016
Ensuring effective storage through CO2-EOR
Problem: Little incentive to undertake the additional activities and
reporting that make EOR+
Solution: Regulatory requirements for the “+” activates whenever
emissions are being avoided and:
1. Developing the appropriate regulations for EOR+
2. Providing support to test, de-risk, and build experience with
needed technologies
3. Resolve legal barriers that limit storage through CO2-EOR (e.g.,
preference for oil production over CO2-storage)

© OECD/IEA 2016
Using more CO2 per barrel
Problem: Emissions reduction benefits are maximized when more
CO2 is used per barrel of oil recovered.
Solution: Let the market do the work:
1. Declining supply costs of CO2 or increasing prices of oil – ceteris
paribus – should lead to increased consumption of CO2 by an EOR
operator.
2. Pricing of CO2 emissions or comparable regulatory interventions
should expand the supply of CO2 and drive down prices.

© OECD/IEA 2016
Comments and perspectives on EOR+
Per Ivar KARSTAD
Manager, CO2 Storage and EOR Research and
Technology
Statoil

© OECD/IEA 2016
Comments and perspectives on EOR+
Steven CARPENTER
Director, Enhanced Oil Recovery Institute
School Of Energy Resources
University of Wyoming

www.uwyo.edu/eori/52
U. S. Oil Recovery and CO2 Storage From
"Next Generation" CO2-EOR Technology*

Non-scientific CO2-EOR Issues
EOR Potential in Wyoming (and US)…
…hampered by migratory bird
protection and permitting on State
and Federal lands

Enhanced Oil Recovery Institute:
Steven Carpenter, Director
steven.carpenter@uwyo.edu
+1-513-460-0360 (cell)
Casper, WY
2435 King Boulevard
Suite 140
Casper, WY 82604
307-315-6442
Laramie, WY
Department 4068
1000 E. University Ave.
Laramie, WY 82071
307-766-2791
Thank you!

© OECD/IEA 2016
Three take-away points from today’s webinar
1. Storing CO2 through EOR, that is EOR+, makes economic
sense
2. There is substantial global technical potential for
storing CO2 through EOR+, and to increase recovery
from aging oil fields
3. Advanced EOR+ can result in emissions reductions
even when considering combustion of oil – and
displacement effects can further increase this benefit.

© OECD/IEA 2013
References
Aycaguer, A.-C., M. Lev-On and A. M. Winer (2001). "Reducing Carbon Dioxide Emissions with
Enhanced Oil Recovery Projects: A Life Cycle Assessment Approach." Energy & Fuels 15(2): 303-
308.
Azzolina, N. A., D. V. Nakles, C. D. Gorecki, W. D. Peck, S. C. Ayash, L. S. Melzer and S. Chatterjee
(2015). "CO2 storage associated with CO2 enhanced oil recovery: A statistical analysis of
historical operations." International Journal of Greenhouse Gas Control 37(0): 384-397.
Cooney, G., J. Littlefield, J. Marriott and T. J. Skone (2015). "Evaluating the Climate Benefits of
CO2-Enhanced Oil Recovery Using Life Cycle Analysis." Environmental Science & Technology
49(12): 7491-7500.
Faltinson, J. E. and B. Gunter (2011). "Net CO2 Stored in North American EOR Projects." Journal of
Canadian Petroleum Technology 50(7): pp. 55-60.
Gordon, D., A. Brandt, J. Bergerson and J. Koomey (2015). Know Your Oil: Creating a Global Oil-
Climate Index. Washington, DC, Carnegie Endowment for International Peace.
Jaramillo, P., W. M. Griffin and S. T. McCoy (2009). "Life Cycle Inventory of CO2 in an Enhanced Oil
Recovery System." Environmental Science and Technology 43(21): 8027-8032.
Khoo, H. H. and R. B. H. Tan (2006). "Life Cycle Investigation of CO2 Recovery and Sequestration."
Environmental Science and Technology 40(12): 4016-4024.
Kuuskraa, V. and M. Wallace (2014). "CO2-EOR set for growth as new CO2 supplies emerge." Oil &
Gas Journal 112(4).
Skone, T. (2013). “The Challenge of Co-Product Management for Large-Scale Energy Systems:
Power, Fuel and CO2.” Presentation to LCA XIII, Orlando, FL. 2 October 2013.
Suebsiri, J., M. Wilson and P. Tontiwachwuthikul (2006). "Life-Cycle Analysis of CO2 EOR on EOR
and Geological Storage through Economic Optimization and Sensitivity Analysis Using the
Weyburn Unit as a Case Study." 45(8): 2483-2488.
Wong, R., A. Goehner and M. McCulloch (2013). Net Greenhouse Gas Impact of Storing CO2
through Enhanced Oil Recovery (EOR) Calgary, AB, Pembina Institute.

Storing CO2 through Enhanced Oil Recovery

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Storing CO2 through Enhanced Oil Recovery