Executive Summary for Policy Makers

The overall objective of the Global Technology Roadmap for carbon capture and storage (CCS) in industry is to advance the global development and uptake of low carbon technologies in industry, contributing to the stabilization of greenhouse gas (GHG) concentrations in the atmosphere. This sectoral assessment supports this road mapping activity by providing as input a summary assessment of the potential opportunities and constraints for the application of carbon dioxide enhanced oil recovery (CO2-EOR), using CO2 captured from industrial sources.

Enhanced oil recovery (EOR) is a term used for a variety of techniques for increasing the amount of crude oil that can be extracted from an oil field. As part of the CO2-EOR process, CO2 is injected into an oil-bearing stratum; though CO2-EOR operations have traditionally focused on optimizing oil production, not the storage of CO2. Nonetheless, CO2-EOR can result in effective storage; in general, most of the initially purchased CO2 for CO2-EOR operations (not that which is recycled) can be stored at the end of injection.

CO2-EOR technologies have been profitable in commercial scale applications for over 30 years, primarily in the United States. Natural CO2 fields are currently the dominant source of CO2 for the U.S. CO2-EOR market, providing CO2 supplies amounting to 47 million metric tons per year. Anthropogenic sources are accounting for steadily increasing share of this CO2 supply, currently providing 12 million metric tons per year of CO2 for EOR. An extensive CO2 pipeline network has evolved to meet the CO2 requirements of this market. However, CO2 reserves from natural sources have the potential of supporting the production of only a small fraction of the oil resource potential achievable with the application of CO2-EOR. Therefore, substantial growth in oil production from the application of CO2-EOR requires significantly expanded access to industrial sources of CO2.

The greatest impact associated with CCS in value-added reservoirs such as CO2-EOR may be derived from their ability to produce incremental oil, with the revenues resulting from this incremental production serving to offset costs associated with deploying CCS. The deployment of CO2-EOR, especially in areas where it has not been deployed before, also contributes to the body of knowledge needed to implement CCS. Finally, advances in CO2-EOR technology can both increase oil production from CO2-EOR and improve the utilization of CO2 used for EOR. This can result in expanding the volume of the CO2 storage capacity associated with CO2-EOR.

The potential global capacity for storage of CO2 in association with CO2-EOR can be substantial. In a recent study, a database of the largest 54 oil basins of the world (accounting for approximately 95% of the world’s estimated ultimately recoverable oil) was developed. Defined technical criteria were used to identify and characterize world oil basins with potential for CO2-EOR. From this, a high-level, first-order assessment of the CO2-EOR oil recovery and CO2 storage capacity potential in these basins was developed using the U.S. experience as analogue. These basin-level, first-order estimates were compared with detailed reservoir modelling of 47 large oil fields in six of these basins, and the first-order estimates were determined to be acceptable.

Based on this high-level assessment, it is apparent that CO2-EOR offers a large, near-term option to store CO2. Fifty of the largest oil basins of the world have reservoirs amenable to the application of miscible CO2-EOR. Assuming “state-of-the-art” technology, oil fields in these basins have the potential to produce 470 billion barrels of additional oil, and store 140 billion metric tons of CO2. If CO2-EOR technology could also be successfully applied to smaller fields, the additional anticipated growth in reserves in discovered fields, and resources that remain in fields that are yet to be discovered, the world-wide application of CO2-EOR could recover over one trillion additional barrels of oil, with associated CO2 storage of 320 billion metric tons. Over 230 billion barrels of potential resource potential from CO2-EOR, or nearly half of the overall global potential, exists in basins in the Middle East and North Africa.

In all regions of the world, the supply of CO2 from industrial sources is not sufficient to meet the potential requirements for CO2 for CO2-EOR. The regions containing the more developed countries, like the U.S., Canada, Australia, and Europe have the largest portions of industrial emissions that could be a CO2 supply source for CO2-EOR. Nonetheless, all of the regions have large volumes of CO2 emitted from industrial sources that are in relatively close proximity (within 50-100 kilometres) to basins that contain fields that are amenable to the application of CO2 -EOR.

Since significant expansion of oil production utilizing CO2-EOR will require volumes of CO2 that cannot be met by natural sources alone; industrial sources of CO2 will need to play a critical role. Thus, not only does CCS need CO2-EOR to help promote economic viability for CCS, but CO2-EOR needs CCS in order to ensure adequate CO2 supplies to facilitate growth in the number of and production from new and expanded CO2-EOR projects.

However, it is important to note that estimating the actual performance of CO2-EOR operations in specific applications is a much more complex and data intensive effort than that applied here, and can often take months or years to perform on a single candidate field. Moreover, it requires substantial amounts of detailed field-and project-specific data, most of which is generally only available to the owner and/or operator of a field. While data access and time constraints prevented the application of this level of rigor to estimating the world-wide performance of potential future CO2-EOR projects for this study, the methodology developed builds upon Advanced Resources’ large volume of data on U.S. crude oil reservoirs and on existing CO2-EOR operations in the United States. However, it is not a substitute for a more comprehensive assessment when investing in specific CO2-EOR projects.

In addition to the more than 120 CO2-EOR projects being pursued around the world, a number of research, development, and demonstration (RD&D) efforts are underway focused on the potential of CO2-EOR in combination with CO2 storage. In 2011, the Global CCS Institute reports 77 joint government-industry large-scale integrated projects (LSIPs) at various stages of the asset life cycle. These include eight operating projects and a further four projects in the execution phase of the project life cycle. Of the 77 LSIPs, 34 (44%) are targeted for EOR applications. Five of the eight operating LSIPs and three of the four in execution are injecting CO2 for EOR. Eight of the nine executing or operating LSIPs target EOR.

Since storing CO2 in association with EOR can substantially offset the extra costs associated with CCS, it can encourage its application in the absence of other incentives for CCS deployment. However, to encourage the development of the necessary supplies of affordable CO2 to facilitate large-scale growth in production from CO2-EOR projects, and facilitate the development of large volumes of industrial-source CO2 and the infrastructure to gather, transport, and distribute the CO2 to CO2-EOR prospects, economic incentives for reducing emissions, such as emissions trading programs, carbon taxes, or other mechanisms, may be necessary. Moreover, within any established framework for regulating and/or incentivizing emissions reductions from wide-scale deployment of CCS (with or without CO2-EOR), storage must be established as a certifiable means for reducing GHG emissions.

Supporting the factors contributing to successful, economically viable CO2-EOR and/or CCS projects may be a necessary but not sufficient condition for the ultimate “conversion” of a CO2-EOR project to a CO2 storage project. Numerous regulatory and liability issues and uncertainties are currently associated with CCS that are hindering wide-scale deployment. These uncertainties are also hindering the pursuit of CO2-EOR, particularly because of the lack of regulatory clarity regarding the process and requirements associated with the transition from EOR operations to permanent geologic storage.