North American CO 2 Status

Transcription

1 North American CO 2 Status Enhanced Oil Recovery Institute s 3 rd Annual CO 2 Conference Casper, Wy Tom Doll, State Oil & Gas Supervisor Wyoming Oil and Gas Conservation Commission Tracy Evans, Denbury Resources L. Stephen Melzer, Melzer Consulting June 2009

2 For Their Assistance, We Also Wish to Thank: Lon Whitman, EORI Bryan Hargrove, Trinity CO 2 Stefan Bachu, Alberta Research Council

3 North American CO 2 Status OUTLINE OF TALK CO 2 EOR Over The Past 2 Decades An Update On CO 2 Supply Areas Of Growth A Lead-in to the Rapidly Advancing Policy World

4 Worldwide and U.S. CO 2 EOR Projects* GROWTH OF WW and U.S. CO2 EOR PROJECTS Worldwide Projects U.S. Projects 120 NO. OF PROJECTS YEAR * Includes CO 2 only Miscible Floods (Source: OGJ 4/21/08 & APTA CO 2 School (Jan & Aug 08)

5 Worldwide and United States CO 2 EOR Production* 300 WW & U.S. CO2 EOR PRODUCTION ALL OF U.S. Worldwide CO2 EOR PRODUCTION - kbopd * Ref: O&GJ Biennial EOR Editions & UTPB Petr Industry Alliance YEAR * Includes CO 2 Miscible & Immiscible Floods (Source: OGJ 4/21/08 & APTA CO 2 School (Jan & Aug 08)

6 New Developments in the Gulf Coast EOR Production - Kbbls/day RECENT GROWTH OF MISSISSIPPI CO2 PROJECTS & PRODUCTION EOR Production bbls/day - Rt Scale Denbury Operates 12 Floods now YEAR * Source: OGJ 4/21/08 & APTA CO 2 School (Jan & Aug 08)

7 Gulf Coast (MS) CO 2 EOR Production +

8 Decline Leveled Due to CO 2 EOR

9 Production History at EnCana s Weyburn Unit Saskatchewan, Canada Oil Rate, 1000 bopd Prim ary & Waterflood Current production at 35-year high Vertical Infills Pre-CO 2 Horiz Infills Actual Waterflood Improvement 5 0 Jan-55 Jan-61 Jan-67 Jan-73 Jan-79 Jan-85 Jan-91 Jan-97 Jan-03 Jan-09 Jan-15 Source: Bachu, 2008 CO 2 Conference and EnCana Corporation

10 Production History & Forecasts at Apache Canada s Midale Unit Waterflood Wedge Primary Wedge EOR Phase Group #3 EOR Phase Group #2 EOR Phase Group # Jun-53 Jun-56 Jun-59 Jun-62 Jun-65 Jun-68 Jun-71 Jun-74 Jun-77 Jun-80 Jun-83 Jun-86 Jun-89 Jun-92 Jun-95 Jun-98 Jun-01 Jun-04 Jun-07 Jun-10 Jun-13 Jun-16 Jun-19 Jun-22 Jun-25 Jun-28 Jun-31 Jun-34 Jun-37 Oil Rate, bopd Oil Rate, bbl/d Source: Bachu, 2008 CO 2 Conference and Apache Canada

11 STATUS OF THE SUPPLY OF CO 2

12 U.S. CO 2 SALES FOR EOR BCF per day CO2 Sales YEAR Just reached 3 bcfpd * Source: 2008, Hargrove, Melzer and Whitman, CO 2 Flooding Conference (Dec 08)

13 NORTH AMERICAN CO 2 SOURCE DELIVERIES FOR ENHANCED OIL RECOVERY (1 st Q 09) Average Daily North American CO2 Source 07 Deliveries for CO2 EOR - 1st Q '09 Ammonia (Fert) 1.4% Nat'l Gas Plants 10.6% Coal Synfuels 4.9% Ethanol 0.0% Ethylene 0.1% Refinery 0.0% TOTAL CO2 VOLUMES NA = 3.05 bcfpd PB = 1.8 bcfpd (Both New Records) Underground 83.0% * Source: APTA CO 2 School (Jan 09) and Melzer Consulting

14 Wyoming CO 2 Supply Wyoming CO2 Purchases to ,000 8,000 7,000 CO2 Purchases - mmcf/month 6,000 5,000 4,000 3,000 2, mmcfpd 1, YEAR

15 Gulf Coast CO 2 Supply Ref: Denbury Resources, Inc. June 2009 Corporate Presentation

16 Permian Basin CO 2 Supply Suppliers At Maximum Capacity McElmo Dome/Doe Canyon Source Fields Limited by Cortez Line Capacity (but a recent upgrade incremented throughput by 200 mmcfpd) Sheep Mountain on Decline (~2-4 years life left?) Bravo Work Underway but Expansions are Challenging West Bravo Now On-line South Permian by-product CO 2 is Currently Compression Limited* * But about to change bcfpd REACHED 1.3 BCFPD IN JAN & FEB) 40 mmcfpd 250 mmcfpd 110 mmcfpd 80 mmcfpd bcfpd

17 Permian Basin CO 2 Supply Average Daily CO2 Purchases w/ Projections- Permian Basin Coal Plant Capture CO 2 Additions? Nat l Gas By-product CO 2 Additions Year 1983 Ave. Daily CO2 Purchase Vols - mmccfpd

18 Proposed CO 2 Backbone Pipelines in Alberta ICON Project Proponents: - Suncor, Husky, Nexen, Shell and Air Products - CNRL, ConocoPhillips, Syncrude, Imperial Oil, Transalta, Sherritt and Agrium Currently in negotiations with the federal and Alberta governments Note: Weyburn pipeline: 328 km (204 mi), capacity of 5 Mt/yr Source: Bachu, 2008 CO 2 Conference

19 But What About EOR Growth Potential? and then, Where Would the CO 2 Come From?

20 SALT CREEK AND MONELL FLOOD PERFORMANCE 12,000 BOPD 40% Development) + CAGR of 20%

21 Gulf Coast CO 2 EOR Growth Record* NET BOPD 10-15% Projected AGR Ref: Denbury Resources, Inc. June 2009 Corporate Presentation

22 U.S. Growth Potential

23 So How Much U.S. CO 2 EOR Potential is Out There?

24 Regional CO 2 EOR Growth Potential Distribution of Technically Recoverable CO2 Reserves* in billions of barrels Total Recoverable: 87.1 billion bbls 3% 7% 2% 14% Alaska California 7% Gulf Coast (AL,FL,MS,LA) Mid-Continent (OK,AR,KS,NE) 20% 8% Illinois/Michigan Permian (W TX,NM) Rockies (CO,UT,WY) Texas, East/Central Williston (MT, ND, SD) Louisiana Offshore 5% 12% Appalachia (WV, OH, KY, PA) 21% 1% * "Storing CO2 w ith Enhanced Oil Recovery," DOE/NETL-402/1312/ dtd Feb 7, 2008, Advanced Resources International

25 WHAT ARE THE LIMITING FACTORS FOR FURTHER GROWTH OF CO 2 EOR? LACK OF AFFORDABLE CO 2 LOCAL AVAILABILITY / TRANSPORTATION NETWORKS CONVERGENCE OF CARBON CAPTURE AND STORAGE GOALS WITH CO 2 EOR NEXT GENERATION TECHNOLOGIES

26 One Large Next Generation Technology is Already Here! (if Time Permits)

27 HESS SEMINOLE FIELD EXPANSION ANNOUNCEMENT: 5-07

28 GEOGRAPHICAL AND GEOLOGICAL SETTING OF THE WASSON AND SEMINOLE FIELDS Seminole Field San Andres Producing Fields and Approximate mid- San Andres Paleogeography * Adapted from Brown, A., (2001), Effects of Hydrodynamics on Cenozoic Oil Migration, Wasson Field Area, NW Shelf PB, W. Tx Geol Soc Fall Symp, Pub , Oct 2001, pp

29 SSAU MPZ & ROZ Crossection and Zonal Attributes Gross Net Permeability Initial Thickness Thickness Porosity Range OOIP Oil Saturation Main Pay Zone (MPZ): % md 1 billion stbo 0.84 Residual Oil Zone (ROZ): % md billion stbo 0.32 Bush, J. (2001), The SSAU Residual Oil Zone (ROZ) CO 2 Flood, Presentation Slides, CO 2 Flooding Conference, Midland, TX. Dec 2001 (

30 Seminole Field Water Saturation Profile* * Brown, A., (2001), Effects of Hydrodynamics on Cenozoic Oil Migration, Wasson Field Area, NW Shelf PB, W. Tx Geol Soc Fall Symp, Pub , Oct 2001, pp

31 WY Oil & Gas Conservation * Source: Commission Biagiotti (2008), Hess Corp., CO 2 Flooding Conference (Dec 08)

32 But Not All the Policy for this Growth is in Place (CO 2 Sourcing is Still Challenging)

33 A QUICK LEAD-IN FOR TOMORROW STATE POLICY ACTIONS Wyoming Texas Louisiana Others FEDERAL ACTIVITY Draft EPA Rules on Sequestration Draft GhG Source Reporting Rules Senate Energy Bill Waxman-Markey Climate Change Bill Stimulus (ARRA) Funding

34 SUMMARY (1) CO 2 EOR Growth has been Steady for Two Decades and Rapidly Accelerating in the Past Few Years For , CO 2 Supplies Were at Full Utilization in the Permian Basin, Wyoming, and Canada (and Mississippi Supplies were Rapidly Expanding) Until the Very Recent Months, EOR Production Growth was Reflective of Lack of Supply Growth (New Projects were also Limited as a Result)

35 SUMMARY (2) Mississippi Supplies Were Not Similarly Constrained and Showed Dramatic Growth: EOR Production Rising Quickly as a Result Wyoming CO 2 Production Continuing to Grow as Salt Creek and Monell Mature Sudden Collapse of Oil Prices in Last Half of 08 Curtailed Demand Somewhat but Lingering, Pent-up Project Demand is Filling Gaps; New Projects are Being Announced and Implemented

36 SUMMARY (3) Further CO 2 EOR Production Growth Expected, Both Within the Three Regions and Canada plus Louisiana and Texas Gulf Coast, Michigan, Montana, Oklahoma, and Possibly California and Kansas Next Generation Technologies are Coming ( Quaternary Oil) Policy Actions are Everywhere (Driven by Storage Considerations)

37 QUESTIONS?

38 BACKUP SLIDES

39 Canadian CO 2 Conclusions CO 2 EOR has not been developed in Canada because of the high cost of CO 2 (there are 68 tertiary recovery projects using natural gas and solvents) Policies and incentives for reduction of greenhouse gas emissions will create the regulatory and economic framework for CO 2 capture and transportation CO 2 will be used for CO 2 EOR wherever and whenever possible Large emitters will use deep saline aquifers and depleted gas reservoirs for storage of surplus CO 2 Source: Bachu, 2008 CO 2 Conference

40 HOW BIG IS THE CO 2 EOR BUSINESS? Annual Production Rev Figures** U.S. $8.0 billion* PB $5.3 billion* $80/bbl NOV 2005 * Source: Oil & Gas Journal (Mar 08) and CO 2 Flooding Conference (2007) ** Does not take into account the NGLs produced from the recycle volumes