Energy Evolution: July 18, 2005
Glencoe's CO2 Injection Project To Boost Oil Production
A small, privately-owned Calgary oil and gas producing company has joined giants of the industry, such as EnCana Corporation and Penn West Energy Trust, in tapping carbon dioxide (CO2) from waste petrochemical plant emissions to boost oil production from its nearby fields.
Glencoe Resources Ltd. has started construction on CO2 gathering and pipelining facilities to move 130,000 tonnes of CO2 a year from a NOVA Chemicals plant near Joffre in central Alberta.
Meanwhile, the 16-year-old company will start construction this September of similar facilities located at the ME Global petrochemical plant site nearby.
Doug Geeraert, vice-president of production for Glencoe, which doesn’t release financial or production statistics on its operations because it is privately owned, says his firm will be removing an additional 110,000 tonnes a year from ME Global, a company jointly owned by Dow Chemical Co. and a Kuwaiti firm.
“That will add up to 240,000 tonnes in total, but we think that could ultimately rise to 350,000 to 400,000 tonnes,” Geeraert says.
Although NOVA and ME Global are separately-owned corporations, he says it made sense for the two companies to work with Glencoe, since the CO2 the company is removing would otherwise be emitted as a greenhouse gas.
“It just happens to make a lot of sense for Glencoe to do both of these projects at the same time,” he says.
“There’s a lot of synergy in using common pipelines and other facilities.”
The petrochemical plants are located adjacent to one another.
Geeraert says Glencoe, which employs about 30 people and considers that part of central Alberta as its core producing area, has been working on CO2 capture and injection technology since 1998.
He would not reveal how much the two projects will cost to build, but says the company may seek federal or provincial government financial help.
Under the federal government’s recently announced Kyoto climate change plan, hundreds of millions of dollars were set aside for projects like the one his firm is building.
Carbon capture and injection projects have the dual advantage of removing greenhouse gases from the atmosphere, while allowing for increased production from older conventional oil reservoirs.
Natural Resources Canada is spearheading a “technology roadmap” into CO2 capture and injection and some involved in that process believe the technology could help the fossil fuel industry virtually become a green industry, while continuing to produce large quantities of oil and gas.
“I could see a time when we could ship CO2 to the Middle East, once their [oil and gas] reservoirs have been depleted,” said Bill Gunter, a scientist with the Alberta Research Council, who heads the roadmap process.
“It’s really exciting when you think outside of the box.”
In Canada, the best known CO2 injection project is at Weyburn, Saskatchewan, where Calgary-based EnCana and other industry partners expect to recover 130 million barrels of oil equivalent over the next 30 years using CO2 pipelined there from the Great Plains Synfuels plant in North Dakota.
Apache Canada Ltd. and partners recently announced plans to spend $95 million on a spur pipeline from the North Dakota line to inject CO2 into other Weyburn-area fields. The partners expect to boost oil recovery by up to 65 million barrels.
Four other CO2 capture and injection projects are underway in Alberta, with Penn West spending $15 million on its Pembina Cardium enhanced oil recovery scheme, aimed at increasing recoveries from the multibillion barrel Pembina Cardium oil pool it considers a core area.
Penn West has been taking CO2 from the NOVA plant since 1984 for enhanced oil recovery at its wells, located just north of the plant. However, it takes just an average of 34,000 tonnes of CO2 now.
If the pilot project is successful, Penn West has said it could lead to a large-scale project that would see it take hundreds of thousands of tonnes a year from area petrochemical plants.
William Andrew, Penn West’s president and CEO, has said he sees great potential in using CO2 injection to increase oil recovery.
“I firmly believe the potential cannot be overstated for extracting more oil,” he said recently.
Of the estimated 7.8 billion barrels of oil in place on the Pembina Cardium pool, only about 15% has been recovered and Penn West has said it could recover another 100 to 200 million barrels of oil equivalent using CO2 injection technology.
Glencoe’s Geeraert says its CO2 project promises to boost its oil recovery for many years.
“What is significant is that [the projects involve] long-term contracts for the solvent [the CO2] we need for our oilfields,” he says.
“This is a multi-year contract that will span several pools.”
No financial terms have been released regarding the acquisition of the CO2.
Geeraert says the likelihood of continued high oil prices boosts the prospects for CO2 gathering and injection.
“Obviously, it depends on the source of the CO2 and related costs,” he says.
A paper produced as part of the technology roadmap process suggests up to 10 million tonnes of CO2 could be captured and stored geologically every year in Western Canada, with the ultimate storage potential of the Western Canada Sedimentary Basin -- the area’s main oil and gas producing area -- being 120,000 megatonnes.
As a measure of the environmental benefits that would bring, NOVA has estimated that the 240,000 tonnes of CO2 the Glencoe project will extract from the atmosphere would be equivalent to removing 52,000 passenger cars from Canada’s highways. If the project almost doubles in size in the future, that would be equivalent to removing 100,000 cars from roadways.
Another environmental advantage of CO2 injection is that it removes the need for using water as an injection fluid in enhanced oil recovery.
NOVA has provided smaller quantities of CO2 to local enhanced oil recovery projects for 20 years.