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Saturday, October 4, 2014

CO2-EOR; CO2 As A Commodity


October 4, 2014: be sure to see first comment below about UND-EERC; and, GE and Statoil partnering on CO2-EOR studies.

Original Post
 
I got a couple of articles sent to me today regarding CO2-EOR and carbon capture and storage (CCS). Time to have a page devoted to CO2-EOR updates.

October 4, 2014: CBC is reporting --
Saskatchewan made history this week by launching the world's first commercial-scale carbon-capture and storage operation at a coal-fired power plant.
With the $1.4-billion mega project, Saskatchewan has leapfrogged past Alberta to take the lead in the race to capture carbon in Canada.The facility in Estevan will take a million tonnes of CO2 a year from a SaskPower station, convert it to liquid and bury it deep underground.
SaskPower says the captured emissions are equivalent to taking a quarter of a million cars off the road.
Alberta’s plans sounded even more ambitious six years ago when the government announced it would invest $2 billion in four major carbon capture and storage (CCS) projects to slash emissions.
But since then two projects have been scrapped and new Premier Jim Prentice now seems lukewarm on CCS.
CCS simply for environmental reasons is costly; may not make economic sense. However, treating CO2 as a commodity for CO2-EOR is a completely different story.

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This is simply some housekeeping:

January 18, 2014: Barron's on DNR.
The first 20% of an oil well's production gushes out, thanks to natural pressure. That eventually drops, and you can push out another 20% by flooding the well with water. When that's finished, you can do carbon-dioxide flooding, a highly effective technique that is Denbury's specialty. Carbon dioxide is an unusual gas. It loves oil. Denbury injects highly pressurized CO2 into a well. It finds the oil, bonds to it, and pushes it out. 
The biggest user of this oil-recovery procedure is Occidental Petroleum. The next largest, and the purest play, is Denbury, which produces 72,000 barrels of oil equivalent a day.
This quarter, the Plano, Texas-based company will pay its first-ever dividend, of 25 cents. Next year, that dividend will grow to between 50 cents and 60 cents a share, giving the stock a yield of about 3%. At a recent $16.46 a share, the stock trades at 4.5 times free cash flow, well below the industry average of 6.8. Closing the gap could push the shares up at least 20%, to $20, not including the dividend.
January 3, 2014: The Dickinson Press, for some reason, ran a story today suggesting that DNR will begin waterflooding in southwestern North Dakota around 2020, but needs to lay a CO2 pipeline first. Not sure why the story was printed at this time. Don updates DNR's plans for southwestern North Dakota:
One year ago this field was supposed to have CO2 in 2018. DNR is currently laying the pipeline for CO2 from Belle Creek, MT, to Baker, MT. I believe the injection in the Baker, Montana, field is to start in 2015. There are also fields northwest and southeast of Baker
DNR's plans were delayed somewhat because the company decided in late 2013 to transition to a "dividend company" rather than a growth company. In 2014 DRN will start paying dividends and are slowing down the growth pace. This meant that the field in North Dakota got pushed back two years (to 2020).
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Timing Is Everything

This article "found" just after I was putting together this CO2-EOR page.

For the warmists who love graphs, this is a good one.

PowerLine is reporting:
One fundamental question in the global warming debate is, what is the Earth’s equilibrium climate sensitivity? That is, how much will the Earth’s average surface temperature rise, ceteris paribus, on account of a doubling of the concentration of carbon dioxide in the atmosphere? Global warming hysteria is predicated on the belief that average temperature will rise by up to 6 degrees C as a result of doubling atmospheric CO2. All of the scare headlines you see about polar bears, droughts, flooded cities, etc., rely on that assumption.
The problem for alarmists is that contemporary research doesn’t support any such scenario. The most recent nail in the alarmists’ coffin is a paper by Nic Lewis and Judith Curry titled “The implications for climate sensitivity of AR5 forcing and heat uptake estimates,” which concluded that the best estimate of equilibrium climate sensitivity is 1.64 degrees. C. Lewis describes the paper’s methodology at the link at the PowerLine article.
Why is 1.64 degrees so important? Because it's the range of normal variability. Furthermore, it is like the 1.64 degrees is "too high," anyway.

Yes, the science is settled. Has been for quite some time.

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2 comments:

  1. Mr. Oksol, the work coming out of research labs on this topic - such as the EERC up there in North Dakota - is off the charts stunning. (To be clear, the EOR in conventional fields - with their multi decade history of implementation - is exciting in itself on many levels), however the unconventional formations (Bakken, EF, etc.) have never yet been attempted on any significant scale.
    The EERC boys indicate in their Phase I report - released a few months ago - that "90% of of the oil in Bakken reservoir rock" and "60% of the oil in Bakken shales" should be recoverable with maximized use of CO2.
    As an aside, GE is committing $10 billion to research in this general field - maximizing and optimizing hydrocarbon extraction with empasis on waterless fraccing and EOR. They are partnering with Statoil for both lab and worldwide field application.

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    Replies
    1. If any oil in the "reservoir rock" is recoverable that's huge. As I understand it right now, all the oil Harold Hamm, et al, are recovering is coming from formations other than the source rock itself.

      GE is already in the Bakken, and it appears their footprint is getting bigger. I am hoping that GE and Statoil are using the Bakken as a test laboratory. My hunch is they are.

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