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One step on the path to solving climate change

By Richard Garrett, Jr.
Your voice for conservation at the Wyoming State Legislature

For the last year, and at the suggestion of our friends at Western Resource Advocates, I have worked on behalf of our members with a diverse group of stakeholders in the development of a national policy initiative for enhanced oil recovery using carbon dioxide.

The technique of enhanced oil recovery (you’ll see it abbreviated as EOR or CO2-EOR in this piece and elsewhere) via the injection of CO2 into an existing oil field, is a way to increase the amount of crude oil that can be extracted from the field—sometimes more than doubling the production from a field.

The technique can also allow production in otherwise inaccessible geological formations called residual oil zones, which are often adjacent to existing fields. A major ROZ is located in Wyoming’s Bighorn Basin.

The reason the Wyoming Outdoor Council is interested in participating in a national policy initiative for CO2-EOR is because we view this as a unique opportunity to help shape a public/private/nongovernmental organization process that might result in a market-based incentive to capture and store (the new term for sequester) one greenhouse gas, CO2, which is a major contributor to climate change.

In Wyoming’s Bighorn Basin it has been estimated that there might be as many as 10 billion barrels of oil in existing fields that is, as resource analysts say, “stranded.”

The prospect of further developing a domestic resource by largely reusing existing infrastructure with industrially produced CO2, which is then stored safely underground, is an enticing one.

It could help reduce the pressure to drill in new places and it could result in a net reduction in CO2 emissions, even if the oil that is brought up is burned and its CO2 is not captured.

As you will read below, this kind of technology is not without its challenges.

In my presentation to the 6th annual University of Wyoming Enhanced Oil Recovery conference in Casper, WY on July 11, 2012 I made our concerns clear.

These are the same concerns that the Council has articulated throughout our participation in the national policy initiative process.

Although there is a great deal of work yet to be done on the national policy initiative; we are cautiously optimistic that our environmental concerns will continue to be recognized and effectively addressed.

In fact, I heard from many people following my presentation that they agree with at least two of our essential tenets—CO2 used in the process must be a captured industrial byproduct (for example from coal-fired power plants) and that its permanent storage must be verifiably safe and secure.

What follows is the text of my presentation to the conference. As always I invite your comments and involvement, both of which the Council relies upon to make the right choices as we urge that energy development be done right.

My Address to the University of Wyoming Enhanced Oil Recovery conference in Casper, WY, July, 2012

Thank you.

I am pinch-hitting today for Brad Crabtree, the Policy Director with the Great Plains Institute who has ably led the national policy initiative about which I’ve been asked to speak. Brad is in D.C. advancing the goals of the initiative, and you can imagine how tough that duty is in July in Washington D.C.

By the way, I am aware of my vulnerable position as the last man standing between 200 people and lunch so I will try to be both concise and brief.

Disclosure—I walked here from where I left my gasoline-powered vehicle parked—in lot 9. FYI, I heat my home, indirectly, with coal. Try as I might, I cannot yet escape the grip and benefit of fossil fuels and maybe I never will.

I do, however, try to be mindful about their creation and conservative in my use of them. I suspect many, perhaps all of you, share that awareness and sense of conservation.

Thank you to those here today, and thank you as well to David Mohrbacher and Glen Murrell (of the University of Wyoming Enhanced Oil Recovery Institute) and to Mark Northam, Kelly Garvey, Mary Byrnes, and the University of Wyoming School of Energy Resources for this opportunity.

I also want to thank the Center for Climate and Energy Solutions (C2ES), the Great Plains Institute, and especially Brad Crabtree for offering the Wyoming Outdoor Council the chance to contribute to the process of helping to conceptualize a national policy initiative [the National Enhanced Oil Recovery Initiative] for the broader use of CO2-EOR—I want to tell you more about the initiative, but first I want to tell you a little bit about the environmental organization that I work for, the Wyoming Outdoor Council.

We have just celebrated, along with some 1,500 members, our 45th anniversary. The Council was brought to life by our iconic founder (and still spiritual leader) Tom Bell. Tom was born and raised in Wyoming and like so many others of his generation went to fight for our country in World War II. Flying as a bombardier in a B-24, Tom lost an eye to enemy fire.

He returned home to his beloved Wyoming to recover and consider. He found comfort in the landscape, clear blue skies, wildlife, and clean water that his father and mother and generations before had left for him to enjoy and prosper from. Tom had—still has—a profound appreciation for all that is Wyoming, its people, places, and sheer untamed wildness.

Tom went on to build two of his first careers (there have been at least five by my count) in the next 20 years, first as a wildlife specialist for the Wyoming Game and Fish and then as a junior high school teacher. It was the latter experience perhaps that instilled more than ever in him the recognition that Wyoming was a gift given to him by those that came before and one that he should pay forward to future generations. It was this fundamental belief and commitment that inspired him to create the Wyoming Outdoor Council.

As you might imagine with any organization like ours that has been around for 45 years there have been an incredible number of challenges, some victories, and some setbacks.

Perhaps our finest victory, beyond simply building a sustainable and respected organization, is knowing that we have been working for 45 years to find a way to reach the goal that I suspect everyone in this room and certainly everyone in WY shares—to build a better place for our children and to leave it in even better shape than when it was given to us.

As for challenges, well we have seen Wyoming become the nation’s BTU leader—combined we create or participate in the creation of 1 out of every 6 BTUs that the nation consumes. I say challenge because this role is one that not unexpectedly creates conflicts.

The creation of energy brings economic prosperity—something we all enjoy—but at the same time it brings environmental risks to the Wyoming values that our members most cherish, those same things that Tom Bell recognized that as a good steward he must pass on to future generations.

So we, as an organization, work hard to encourage the state and its industrial citizens to do it right when it comes to energy development. We know development is going to happen, we recognize its many benefits. At the same time it’s all about place and pace and it is crucial that we find the right formula to fulfill our obligation to not only help meet the nation’s energy needs, but also its need for a wild and profoundly beautiful place like Wyoming.

So what is the formula? Well there are several, in all likelihood, but one certainly seems to be CO2-EOR. In many ways it appears to offer a unique opportunity to balance energy development while reducing environmental risks or imprints. But here is the rub, that is only true if it is done right.

That is where the National Enhanced Oil Recovery Initiative saw an opportunity. C2ES and the Great Plains Institute brought together a diverse universe of stakeholders including industry leaders, decision-makers, academics, regulators, and yes, even environmentalists. Some examples include Arch Coal, AFL-CIO, Tenaska Energy, state legislators (Texas and Montana for example), General Electric, the Clean Air Task Force, West Virginia Public Service Commission and of course the Wyoming Outdoor Council —and by the way, you can learn more about all of this including our accomplishments to date, white papers, and participants at www.neori.org.

The initiative kicked off in earnest last year about this time with an intense two day meeting in Washington D.C. There, we (about 40 folks), worked through the broad outline of what an initiative might look like and how in a polarized world we could work collaboratively to craft a policy which, if adopted on a national scale, would encourage the further development and deployment of CO2-EOR.

We identified these objectives:

  • Capture CO2 from industrial sources.
  • Ship the CO2 through an expanded infrastructure.
  • Use the CO2 to recover an otherwise stranded resource in existing brownfields.
  • Store —dare I say, sequester—the CO2 permanently.
  • And do all this with the creation of, for a limited time frame, a tax structure that could jump-start the opportunity.

Our organization (and perhaps other environmental organizations) was intrigued by this concept because it has the potential for helping us to advance our mission.
• We believe capturing CO2 from industrial sources is critical to our world’s ability to cope with climate change—climate change is the number one challenge to our mission.
• We believe that re-development of existing infrastructure and oil field developments (brownfields) reduces the demand to discover and develop new resources—we need to leave resources available to future generations.
• We must store CO2 in a way that is environmentally responsible and we need to make sure that it is in the ground, sealed for eternity.

The initiative’s participants have met two more times since that first meeting in D.C. and we have had weekly conference calls to continue to craft the policy initiative.

As you might imagine, there have been stumbles along the way, but we are glad to report that we have completed Phase I of the initiative and are now well underway with Phase II where we are at the point where key members of Congress—supporters of the initiative—almost/nearly/maybe/certainly will craft legislation that will support the public/private partnership that the initiative has championed.

Still to be fully fleshed out are 45Q tax issues, something that my fellow panelist Mike Moore referred to and not my realm of expertise but a crucial component for the success of the initiative.

As I close, I want to ask upon everyone here today one thing (much in the same way I embrace the many benefits of energy development). I ask that you embrace the value of our organization’s mission—namely, good stewardship with the goal of offering our children the same gift given to us. To me one of the key components of that will be to trust but verify the key components of the policy initiative, namely:

CO2-EOR must capture, use and store industrially produced CO2. I ask you to collaborate with us on these objectives. I pledge our organization’s continued involvement and point to an example of our good faith about which you may, or may not know.

First some background:

Wyoming is a big square state (I suspect you already know that). About half of our state is publicly owned and managed by either the federal or state government. At the Department of the Interior, the federal government divided our state into field offices (Lander, Rock Springs, Casper, Rawlins, etc).

The Bureau of Land Management manages these field offices and leases mineral, timber, and grazing resources within their boundaries while balancing them with recreational and conservation objectives under a concept known as multiple use. These field offices are required to create, with ample public input, 20-year plans called RMPs or resource management plans. Not too long ago, the combined Bighorn Basin RMP was made public. The RMP neglected, for whatever reason, to account for how an estimated 10 billion barrels of stranded oil could be recovered using CO2-EOR. Wyoming’s Governor Matt Mead together with key state legislators including Senator Eli Bebout and Representative Tom Lockhart (both of whom are here today) recognized this deficiency and reached out to the BLM and a variety of stakeholders for correction.

By joining in the policy initiative, and learning from its participants (people like Steve Melzer), our organization was able to endorse the governor’s successful call to the BLM for an amendment to the RMP which would account for the availability of the stranded resource using CO2-EOR.

I use this as an example of our members’ good faith in the process and its purpose. We are eager to continue to work collaboratively in ways that will make sure that Wyoming, as called upon, will continue to contribute our fair share to the nation’s BTU requirements. We are also pledged, above all, to our mission and the protection of our wild (and square) state’s environment.

There is reason for optimism. I will conclude by reading from an MIT Energy Initiative Study, published in 2011 (this study is available on the NEORI website):

“ . . . [A]n organized CO2-EOR program using anthropogenic CO2 could, with the appropriate CO2 transportation infrastructure, kick-start larger-scale sequestration in the [United States] and meet sequestration needs for a significant period if CO2 emissions pricing is introduced. Of course, this will depend on reaching a satisfactory understanding of the scale and permanence of CO2 storage in EOR.”

It appears that up to 3,500 GWe-years of CO2 from coal power plant generation could be accommodated in the EOR Main Pay Zones (MPZs).

This represents about 15 years of total output from all US coal plants, or equivalently about 60 years of output from 25 percent of the US coal fleet.

The combination of the high cost of integrated first-mover CCS projects, the benefits of enhanced domestic oil production, and the rough equivalence of CO2 needs for EOR and CO2 sequestration potential in the next two-to-three decades merits a serious look at scaling up CO2-EOR with government support.

However, in addition to the research needed to quantify storage performance, several other implementation issues need to be addressed.

There is reason for optimism, though. Another MIT study suggests that contrary to prevailing thought CCS is not prohibitively expensive and can become “a cost-effective mitigation pathway.”  The study found the following:

Carbon dioxide capture increases the busbar electricity cost (COE) from—

5.0 to 6.7 ¢/kWh at IGCC plants (integrated gasification combined cycle power plants)
4.4 to 7.7 ¢/kWh at PC plants (pulverized coal-fired power plants)
3.3 to 4.9 ¢/kWh at NGCC plants (natural gas combined cycle power plants)

Thank you. Again, I appreciate the invitation to speak to you today and to share our perspective on CO2-EOR.

 

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5 Responses to “One step on the path to solving climate change”

  1. I deeply appreciate Richard circulating this clear and informative position paper on EOR or CO2-EOR. As he notes, there are risks to the initiative. But the benefits, if done right, seem clear, assuming, as we probably must, the nation’s on-going commitment to fossil fuels. I wish this initiative pushed us further along the road to increased development of renewables. But that may be seeking apples when we are talking about oranges.

  2. I agree with your plan of Co2 reduction and sequesteration by improved use of existing infrastructure and its benefits to conservation of wildland habitat.

  3. Questions for Richard:

    Thank you for sending along this speech and additional info.

    What is the amount of oil recoverable using CO2 EOR? I understand that a figure is mentioned but how does it compare to a year’s worth of consumption of oil in US/North America?
    What does “expanded infrastructure” mean as it relates to getting CO2 from one place to another? What are the costs associated with this “expanded infrastructure”? How do they compared with $s generated by the yield of stranded oil?
    What is the science on pumping CO2 into old oil fields? My understanding is that they would be as leaky as sieves.
    What is the percentage of CO2 that might be captured annually as compared to the amount generated
    annually in the US/ North America?

    Thank you Richard. No hurry on answers. I suspect we’ll have plenty of time to contemplate this issue!

  4. Encouraging to see industry and environmentalists working together to solve energy issues!

  5. Thank you for all of the responses. I appreciate the chance to continue the dialogue.

    According to the Energy Information Agency, the U.S. consumes more oil per day, 18.8 million barrels, than the next four largest consuming nations combined. Reliable estimates of the amount of stranded oil that have the potential to be ‘recovered’ using CO2-EOR range up to 400 billion barrels. Excluding reserves in the Gulf of Mexico, the U.S. was ‘endowed’ with 596 billion barrels of oil. Thus, CO2-EOR could increase U.S. tertiary reserves by close to 65%.

    The expanded infrastructure to which I referred would include intrastate and interstate pipelines. Presently there are about 3,000 miles of CO2 pipelines in the U.S. A significant expansion of this network would have to be accomplished in order to facilitate the transport of captured CO2 from large emitters (like, for example, the coal-fired power plants in Wyoming) to where it would be used and stored (Wyoming’s Bighorn Basin being one example).

    CO2 has been used since the mid-60s to recover ‘stranded’ oil. Collectively we are only just now beginning to recognize how crucial it is to make sure that the CO2 stays in the ground. The technology will not win public acceptance if it is not independently verified that the CO2 is sequestered permanently and without danger to the climate or to future generations.

    Wyoming produces about 61.5 million tons of CO2 annually which is roughly equivalent to Libya’s annual production. The U.S. produces about 5.5 billion tons of CO2 annually. We are second only to China which is said to be the world’s largest producer of anthropogenic CO2 (7 billion tons per year). How much of this CO2 can be captured is a key challenge. Without economic or regulatory incentive, the world’s largest polluters will continue to pursue business as usual.

    The industry participants in the NEORI initiative have calculated that there is a sound business model for capture, transportation, sale, use, and storage of CO2 but they advocate that the U.S. tax code, section 45Q, must be adapted, for a limited time (10 years) to provide appropriate recognition of their risks of startup. While I admit that this kind of incentive is one frequently permanently bestowed on industry, I think that the greater public good of the potential for CO2 sequestration and offsets to climate change warrant informed debate on the tax code revision. I promise you that WOC will remain alert to this while continuing to push for the use of anthropogenic CO2 and its permanent sequestration.

    In closing, please know that CO2-EOR is not the only (or even primary) alternative that we have identified for solving climate change. The nation (and Wyoming in particular) must continue to devote resources to conservation, efficiency, and the deployment of large scale as well as distributed renewable energy resources. Wyoming’s wind, for example, is rated ‘world-class’ and the Council is working to make sure that resource continues to be developed with all of the safeguards that we advocate for more traditional energy development. Wyoming can lead by example in reversing the effects of climate change.

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