Bureau of Economic GeologyJackson School of Geosciences

The University of Texas at Austin

“The Gulf Coast Carbon Center: Exploring

Synergies between gasification and CO2

Sequestration”

Ian J. Duncan

Bureau ofEconomic GeologyEnergy, Environment, Education

QAd2349x

• Established in 1909

BUREAU OF ECONOMIC GEOLOGY

• Oldest research unit of The University of Texas at Austin

• Geological Survey of Texas

• Provides extensive advisory, technical, and informational services

• Conducts basic and applied research– Energy

• Industrial Associates• Basin analysis• Reservoir Characterization

– Environmental and Earth Systems• Airborne Geophysics• Coastal and environmental studies• Geologic mapping• Hydrogeology• Geologic sequestration

– Education and Outreach

Bureau of Economic Geology

CO2 Sequestration• CO2 contributes to climate change

• Geologic sequestration is one way to reduce atmospheric releases of CO2

• Critical assessment of geologic and engineering aspects of CO2

sequestration is needed

GCCC Vision Statement

The GCCC seeks to impact global levels of GHG in the atmosphere by doing science and engineering studies that will support reduction of CO2 and methane emissions and enable the development of an economically viable, multifaceted, CO2 sequestration industry in the Gulf Coast

Why the Gulf Coast?

Image shows concentrations of stationary sources of CO2 superimposed on the thickness of the subsurface

GCCC Industry Partners

Other GCCC Collaborators

• DOE-NETL • Southeast Regional Sequestration Partnership

(SECarb); Southwest Regional Sequestration Partnership

• Environmental research, NGO’s– Environmental Defense, National Resources Defense

Council Houston Sierra Club• Other research teams

– National labs, NETL, LBNL,LLNL, ORNL, PNL; USGS; HARC; UT ESI; Louisiana Geological Survey, Australian CO2CRC

• Mike Moore (Falcon Environmental)– GCCC consultant in carbon credits markets

• UT Department of Petroleum Engineering, internationally recognized leaders in CO2 enhanced oil recovery (EOR) research.

Core Competencies• Conducting large scale field projects

that demonstrate the viability of geologic sequestration of CO2

• Establishing best practices for CO2 Monitoring, Measurement and Verification using risk analysis

• Economic modeling of the future CO2 value chain for the Gulf Coast

• Using next generation reservoir characterization to optimize CO2 EOR

Field Demonstration - Monitoring at Frio Pilot

Downhole P&T

Radial VSPCross well Seismic, EM

Downhole samplingU-tubeGas lift

Wirelinelogging

Aquifer wells (4)Gas wells Access tubes, gas sampling

Tracers

Observation WellInjection Well

Main GCCC Results to Date

• Quantification of CO2 market for EOR in GIS (spatial inventory)

• Successful field demonstration (Frio I Project) of monitoring and modeling techniques to measure subsurface storage of CO2, assure public and environmental safety and effectiveness of this process

• Demonstration of significance of two phase trapping in assuring permanence of CO2 storage

• Development of enhanced screening methodology for EOR prospects

Model for Stacked Storage in the Gulf Coast

Linked enhanced oil and gas productionto offset development cost and speed implementation

Very large volumestorage in stacked brineformations beneathreservoir footprints

Near-term and long-term sources and sinks linked in a regional pipeline network

Validation of adequacy of permitting and monitoring protocols

Message to LegislaturesNational Energy supply benefits from applying

CO2 enhanced oil recovery processes in Texas and the Gulf Coast.

The Environment benefits from capturing and storing a major greenhouse gas.

The Economy benefits from:•Enhanced oil recovery (EOR) including wellhead

value, taxes, and jobs. •Carbon credits from around the world could come

to the Gulf Coast owing to a unique association of large volume storage capacity and CO2 sources

•Jobs created by infrastructure development associated with a CO2 sequestration industry

Future Trends for Fossil Energy Utilization in the

US

THE US IS THE SAUDI ARABIA OF COAL

THE US IS THE SUADI ARABIA OF COALWhat are the Implications for the Oil Industry

• High oil prices and National Security will drive gasification of coal and production of synthetic diesel for DOD

• Environmental NGO’s driving power companies to decarbonize fuel…. CO2 sequestration

• Cheap CO2 available for EOR

GULF COAST CO2 BASED ENHANCED OIL

RECOVERYSCENARIOS

CO2 Miscible Flooding Mechanisms

• Large density at reservoir conditions makes the CO2 a good solvent for light hydrocarbons

• The formation of a single phase diminishes the capillary forces

• Miscibility with the CO2 lowers the viscosity of the oil and increases its mobility.

Pure CO2CO2 VaporizingOil Components

CO2 CondensingInto Oil

Original Oil

Miscibility Region(CO2 and Oil Form Single Phase)

Direction of Displacement

CO2 Flooding under Miscible Conditions

Selection of Candidates Suitable for CO2 Miscible Flooding

Minimum Miscibility Pressure (MMP) within an achievable range

CO2 Minimum Misciility Pressure

50

55

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85

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95

100

1000 1100 1200 1300 1400 1500 1600 1700 1800

Test Pressure, psia

% R

ecov

ery

at 1

.2 H

CPV

of C

O2

Inje

cted

CO2 Thermodynamic MMP

United States CO2 EOR

• 2 Bcf/day (~35 MMTY) of CO2 currently injected for EOR, largely in the Permian Basin

• ~ 20% of CO2 for EOR is anthropogenic (~ 7 MMTY)

• CO2 annual emissions from all fossil energy is ~ 6 GT

• Annual U.S. oil consumption is ~7 BSTB and annual oil production is ~3.2 BSTB

• Current U.S. CO2 EOR Production ~ 206 MBOPD, 7.5 MMBOPY– 4% of U.S. production, 66 active projects, 50 in Permian Basin

Source: Beecy (2003), ARI

United States CO2 EOR

Converging ForcesEnergy, Environment, Economy

Energy supply benefits from applying CO2 enhanced oil recovery processes in Texas and the Gulf Coast.

The Environment benefits from capturing and storing a major greenhouse gas.

The Economy benefits from•Enhanced oil recovery (EOR) including wellhead

value, taxes, and jobs. •Net positive carbon credits in Texas and the Gulf

Coast owing to large volume storage capacity•Jobs created by infrastructure development

associated with a CO2 sequestration industry

Why the Gulf Coast?• The Gulf Coast region accounts for approximately 16%

of the U.S. annual CO2 emissions from fossil fuels.• Annual emissions of CO2 in Texas, Louisiana and

Mississippi are ~ 1 billion metric tons (1 GT), and Texas alone emits 667 million metric tons of CO2.

• Source-sink proximity• “Stacked Sinks”; oil fields and large volume brine

aquifers• Regional and local geology is well understood• Some infrastructure in already in place• Economic feedback, whereby State incentives for

capture are recovered via taxes on CO2 EOR

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Focus on the Gulf Coast#

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Sources (dot size =release) Refineries and chemical

plants Electric power plants

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Selected oil fieldthat could benefit from EOR

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Existing CO2

pipeline

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Future CO2 pipeline

Frio Brine Pilot

Anthropogenic CO2 stationary source data from Hendriks and others, IEA Greenhouse Gas R&D Program, 2002).

Anthropogenic CO2The Gulf Coast “Wedge”

Historical and Forecast of U.S. and Gulf Coast region CO2 emissions from fossil fuels (Data from CDIAC and EIA websites).

0

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4,000

6,000

8,000

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14,000

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1995

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2007

2010

2013

2016

2019

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2049

2052

Ann

ual E

mis

sion

s (M

M m

etric

tons

of C

O

U.S. othersGulf Coast (TX, LA, MS)

Historical Forecast

Converting CO2-EOR to Storage

• Permanently store CO2 in reservoir after EOR has been completed

• Reservoir characterization and simulation for long–term storage

• Long–term measurement, monitoring, and verification (MMV) systems.

Optimizing CO2 Storage

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CO

2 bul

k vo

lum

e re

sidu

al

(kgm

/m3 ) Maximum storage

capacity

Screening Criteria for CO2 Storage/EOR

• Minimum miscibility pressure • Cumulative and current annual oil

production• Storage potential (metric tons of

CO2) • Distance from CO2 source • Reservoir Geology • Cultural character (Urbanization,

Unitization)

DECISION TREEFOR SCREENING

CANDIDATERESERVOIRS

Oil-reservoir database

Has reservoirbeen waterflooded?

Minimummiscibility

pressure (depth,temp., pressure,

oil character)

Does reservoir havewater- drivemechanism?

No

Rejected

No

Rejected

No

Rejected

No

Yes

Unknown

Yes

Yes

Yes

No

Candidate reservoirs

Candidate forsecondaryrecovery

Reservoir depth> 6000 ft

Cumulativeproduction> 1 MMSTB

Yes

Past Gulf Coast CO2 EOR• Water-alternating gas (WAG)

– Example Quarantine Bay, Chevron 1991– Results 16.9% recovery of OOIP, 188 Mstb

recovered– CO2 utilization 2.57 Mcf/stb recovered

• Gravity stable flood– Example Weeks Island, Shell ( Johnston,

1988)– Results 64% of starting oil volume, 261 Mstb– Design 24 % pore-volume CO2 w/ 6 % CH4– CO2 utilization 7.9 Mcf/stb with recycle

Areas With Miscible CO2-EOR Potential

Residual Oil Resources in Texas (Non Permian Basin)

Total > 38 Billion STB

2,051,290 MSTB

13,580,000 M STB

9,637,000 MSTB

13,105,709 MSTB

Gulf CoastTexas Cretaceous MarginEast TexasNorth Central Texas

15% RecoveryTotal = 5.7 billion STB

2,037,000

307,6941,965,856

1,445,550

Gulf Coast

Texas Cretaceous Shelf Margin

East Texas

North Central Texas

Residual Oil Resources in Texas (Non Permian Basin)

Pipelines

Coal Resources and Mines

Economics Anthropogenic CO2-EOR

• Competes with natural source CO2, priced at $10-$15/Ton, delivered at pressure.

• High purity (95+%) CO2 preferred.• Cost of compression and transportation

to sinks are significant.• Near-term opportunities for low-cost

capture and CO2-EOR are offered by high concentration CO2 sources.

• Production of additional domestic oil is value added benefit.

• EOR and carbon tax incentives will provide economic incentives for CO2-EOR for sequestration.

Storage Volumes• Annual production in Gulf Coast

(37,000 km3) is ~1 GT CO2 with emissions doubling over 50 years

• Total EOR CO2 storage is 0.7 GT• Brine filled storage is ~ 222 GT CO2

in only 1% of brine-filled volume in sandstones from 4000 ft-12,000 ft

Technical Advances Since the 1980’s to Improve EOR Results

• 3D seismic for delineating fault blocks

• Directional drilling for placing wells

• Reservoir characterization for designing flood

• Improved knowledge of CO2 flooding

“The Size of the Prize”

CO2-EOR Resource (B bbls)

Oil Price ($/bbl)

Wellhead Value (B $)

Severance Taxes ($B, 4.6%)

Ad Valorem Taxes ($B, 3.95%)

Jobs Created (19.1 jobs per $1MM Wellhead Value)

Economic Value (Wellhead Valuex2.91)

Franchise Taxes ($B, 0.18%)

Sales Taxes ($B, 2%)

5.7 30 $171 $8 $7 3,266,100 $498 $0.9 $105.7 40 $228 $10 $9 4,354,800 $663 $1.2 $135.7 50 $285 $13 $11 5,443,500 $829 $1.5 $17

CO2-EOR Resource (B bbls)CO2 Sequestered (tons)

CO2 Sequestered (metric tons, tonnes)

CO2 Sequestered (Gigatonne, Gt)

5.7 800,565,000 726,112,455 0.73

*Calculations based on the TX RRC's "General Model of Oil and Gas Impact on the Texas Economy" derived from the Comptroller's Input-Output model of the Texas economy. Severance and Ad Valorem Taxes from Wellhead Value; Indirect Taxes from Economic Value.

State Revenue$/bbl Wellhead Taxes Other Taxes$30 $15 billion $11 billion$40 $19 billion $14 billion$50 $24 billion $19 billion

$60 $30 billion $22billion

State Incentives for Capture Cost@ $70/ton capture = $51 billion@ $20/ton capture = $15 billion

We may be closer than we think!

Thanks!

For more information: www.gulfcoastcarbon.org

Anthropogenic CO2 in the Gulf Coast Region

Historical and forecast U.S. and Gulf Coast CO2 emissions from fossil fuels

Data from CDIAC and EIA websites

0

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Annu

al E

mis

sion

s (M

M m

etric

tons

of C

O 2)

U.S. others

Gulf Coast (TX, LA, MS)

Historical Forecast

Molecular Weight C5+ vs. Oil gravity (Lasater, 1958)

0

20

40

60

80

100

0 100 200 300 400 500

Molecular Weight C5+

Oil

Gra

vity

, oA

PI

31

220

Selection of Candidates Suitable for Miscible Flooding

Selection of Candidates Suitable for Miscible Flooding

• Temperature gradient non-linear regression used for the Frio Plays 5, 6, 7, and 10

• Non-linear regression for the molecular weight of the C5+

0386.11

9.7864

API

MW o

Temp = 0.015Depth + 77.45

Selection of Candidates Suitable for Miscible Flooding

• Non-linear Multiple Regression for the Minimum Miscibility Pressure, MMP

MWMWMMP T *377.4)005.1**727.7(558.329