SPE Distinguished Lecturer Program

Transcription

1 SPE Distinguished Lecturer Program The SPE Distinguished Lecturer Program is funded principally through a grant from the SPE Foundation. The society gratefully acknowledges the companies that support this program by allowing their professionals to participate as lecturers. Special thanks to the American Institute of Mining, Metallurgical, and Petroleum Engineers (AIME) for its contribution to the program. Society of Petroleum Engineers Distinguished Lecturer Program

2 The Strategic Significance and Practicalities of CO2 EOR and Storage David S Hughes (david.hughes@senergyworld.com) Carbon Storage Specialist USA, April 2009 Society of Petroleum Engineers Distinguished Lecturer Program

3 Geological Storage of CO2 New business stream for oil industry Store liquid CO2 in depleted oil and gas fields and also saline aquifers Synergies with existing operations through reuse of infrastructure etc. and possibility of increasing hydrocarbon recovery Contributes to the fight on global warming Has value through Cap and Trade arrangements such as the EU emissions trading scheme But comes with regulations and liabilities Uses all our skills

4 IPCC Prediction of Requirement for Carbon Capture and Storage (CCS) From ~2030 amount of CO2 that requires to be stored is ~4 billion tonnes/year, rising to ~18 billion tonnes/year in 2095 c.f.3.9 billion tonnes/year oil production and 2.5 billion tonnes oil equivalent/year gas production in From IPCC Special Report on Carbon Dioxide Capture and Storage 2005 and BP Statistical Review, 2006

5 CO2 Flooding is a Major Enhanced Oil Recovery (EOR) Process in USA CO2 to Canada Weyburn 25,000 bbl/d En Cana 2006 statistics 45 million tonnes fresh CO2 injected per year (USA) 53 projects USA (80 worldwide) ~180,000 b/d USA (~260,000 b/d worldwide) 1/3 of one percent of world production Rockies 5 Fields Additional 2 Proposed (Anadarko) 19,520 Gross Bbls/d Operators: Exxon/Chevron/Merit CO 2 Source: Natural/Manufacturing LeBarge McElmo Dome Ridgeway CO 2 Discovery Permian Basin 42 Fields 155,000 Gross Bbls/d Operator: Multiple (16) CO 2 Source: Natural Sheep Mountain CO2 supply network Bravo Dome Great Plains Coal Gasification Plant Gas Plants Mid-Continent 4 Fields 9,800 Gross Bbls/d Operators: Exxon/Anadarko/Chaparral CO 2 Source: Manufacturing Ammonia Plant Jackson Dome Eastern Gulf Gulf Coast 3 Fields 8,000 Gross Bbls/d Operator: Denbury CO 2 Source: Natural

6 World Coal Resources

7 Contribution to UK CO2 Emissions From Power Sector UK CO2 emissions million tonnes* About 1/3 from fossil fuelled power stations 23 million tonnes at Drax in England 10 million tonnes at Longannet in Scotland *UK DECC, 26 March 2009

8 UK Commitment to Reduction in CO2 Emissions Under Kyoto Protocol UK committed to reducing greenhouse gas emissions by 12.5% from their 1990 level by (achieved 23% to 2008*) 2008 Climate Change Act has set legally binding targets for the UK to reduce greenhouse gas emissions by at least 80% by 2050, and CO2 emissions by at least 26% by 2020, from 1990 base (achieved 13% CO2 reduction to 2008*) Also requires the Government to set five year carbon budgets, in order to set out a trajectory for emissions reductions to 2050 Government sees Carbon Capture and Storage (Sequestration) making a significant contribution towards achieving these targets Principal funding mechanism issuing allowances and allowing them to be traded (EU Emissions Trading Scheme) *UK Department of Energy and Climate Change, 9 February and 26 March 2009

9 Fighting Climate Change (a year ago) We re fighting climate change with techna-ology We re legislating

10 Fighting Climate Change (now) We re legislating We ve legislated

11 Decarbonisation of UK Fossil Electricity Supply PetaJoule (10 15 Joule) 1 MWh = Joules UK Power Generation Scenario with 80% cut in CO2 Emissions Plan for UK fossil power supply to be decarbonised (coal) by 2030 CO2 Capture rates (million tonnes per year) From Heather Haydock, AEA, City and Financial CCS Summit, 2 and 3 December 2008

12 Proposed New Power Stations with CO2 Capture and Storage CO2 (mill te/y) CO2 Captured Proposed programme would capture up to 80 million tonnes per year at 90% load factor So in 50 years 2-4 billion tonnes needs to be stored depending load factor CO2 Storage Options Oil fields including enhanced oil recovery (EOR) Depleted gas fields Saline aquifers Map: ENDS Report July 2007

13 Capture Options (~90%) Post Combustion Capture Exhaust, % CO 2 Coal 900 kg CO2 per MWh Gas 400 kg CO2 per MWh Power Plant Conventional CO 2 Capture Pre-combustion Capture 2H 2 + O 2 2H 2 O Coal Oil Natural Gas Gasification Reforming H 2 +CO Water- Shift CO 2 Capture H 2 +CO 2 Power Plant Hydrogen-rich fuel CO 2 storage Oxyfuel Combustion H 2 for other uses Exhaust, % CO 2 CH 4 + O 2 Power Plant Oxy-fuel combustion CO 2 + 2H 2 O Air Separation Water Removal

14 Sources and Potential Sinks of CO2 Around North Sea Geographical Information System Decision Support System Part of EU GESTCO Project British Geological Survey, February 2005

15 SNS Gas Fields CO2 Storage Potential 53 fields most Permian Leman Sandstone Proven geological trap for hydrocarbon gas Near to CO2 sources Existing infrastructure Well and pressure depletion may have compromised trap Aquifer influx may reduce capacity CO2 capacity ~2.8 billion tonnes

16 SNS Bunter Sandstone CO2 Storage Potential A number of potentially suitable saline aquifers have been identified with cumulative capacity maybe 10s billions tonnes For example SNS Bunter sandstone 29 closed structures Good porosity (average 18.7%) and permeability ft deep Near to CO2 sources Good seal (mudstones and evaporites) - gas bearing in places proves trap (or not!) Some existing infrastructure Cut by faults which may leak Material on SNS gas field and aquifer storage from: An assessment of carbon sequestration potential in the UK SNS case study, Michele Bentham, January 2006, Tyndall Centre

17 CO2 EOR Onshore - Advantages CO2 supply network High well density, pattern flood, relatively cheap to redrill/refurbish Relatively low secondary recovery (35-45%) Phased implementation Large surface area available for facilities Currently economic

18 CO2 EOR Offshore - Challenges Limited CO2 supply (at least at present) Fewer wells, peripheral flood, expensive new wells and workovers High secondary recovery (55-70%) Single implementation (i.e. no chance to introduce the project in phases) Existing facilities mainly incompatible with high CO2 content in fluids Limited weight and space for new facilities Estimated UK North Sea EOR-related CO2 capacity billion tonnes (1-2.8 billion barrels incremental oil) But probably need $100 barrel for offshore EOR to be economic

19 Well Density Onshore vs. Offshore 10 acre spacing (660ft sq) 600 acre spacing (5500ft sq)

20 UK Carbon Capture, Transport and Storage Competition Single CCS project up to 100% funding (around 1 billion) Offshore disposal of CO2 Coal (including oxyfuel) with post-combustion capture (i.e. using technology that can be retro-fitted and capable of being deployed in China etc.) MW (~ 2 million tonnes/y of CO2) First CO2 capture and storage by 2014 Discussions ongoing with three consortia to close contract in September 2009 One of demonstration projects in EU by 2015

21 Sleipner CO2 Storage Project Images: Alligator film /BUG / Øyvind Hagen StatoilHydro Natural gas in Sleipner contains 9 mol% CO2 Offshore chemical capture plant reduces CO2 content of gas for export to <2.5 mol% CO2 To avoid $50 tonne tax captured CO2 compressed an reinjected into shallower (3000 ft) Utsira formation million tonnes/y CO2 reinjected, started 1996 and lasts for ~20 years

22 Weyburn CO2 EOR, Saskatchewan, Canada 200 mile pipeline - 2 million tonnes/year (~100 million scf/d) 130 mill barrel 30 mill te CO2

23 Weyburn - 4D Seismic Monitoring

24 CCS Activity Map Canada USA Norway UK Europe Algeria UAE India Japan China South Africa Australia

25 USA CO2 Emissions and Reduction Targets GHG emissions in 2005 were 7206 million (metric) tonnes CO2 equivalent (actual CO2 emissions were 6032 million tonnes or 84% of total) Compared with 1990, 2007 CO2 emissions were 20% higher (34% higher from electricity generation) Kyoto target (non- signatory) was a reduction of 7% Reduction targets in Henry Waxman (House Energy and Commerce Chairman) bill are 3% by 2012, 20% by 2020, 42% by 2030 and 83% by 2050 compared with 2005 base Note that the 2050 figure is 66% reduction compared with 1990 base American Clean Energy and Security Act of 2009 (Draft), 30 March 2009

26 American Clean Energy and Security Act of 2009 (Draft) Act will establish Carbon Storage Research Corporation with role to seed fund commercial scale CCS with levy on fossil fuelled electricity generation of $1 billion per annum for ten years Also establishes coordinated approach to permitting and certifying geological storage sites including subsurface property rights Establishes reporting and regulation regime for CO2 injection sites including those associated with enhanced hydrocarbon recovery Deals with liabilities for closed sites American Clean Energy and Security Act of 2009 (Draft), 30 March 2009

27 Establishes US Wide Cap and Trade System Allowance trading system from 2012 covering power utilities, oil companies and large industrial sources totaling 85% of GHG emissions (>25,000 tonnes/year) Number of allowances reduced each year to meet emissions reduction targets 100% auctioning of allowances (23% revenue used for clean energy investment rest returned to people, communities and businesses) Trading system designed to establish and maintain an effective, transparent, and fair market for emissions allowances and preserve the integrity of the cap on emissions American Clean Energy and Security Act of 2009 (Draft), 30 March 2009

28 US Projected Power Generation by Fuel Type and CO2 Emissions (Unabated) US DOE/NETL Carbon Sequestration Atlas of USA and Canada, 2008 American Clean Energy and Security Act of 2009 (Draft), 30 March 2009

29 US CO2 Emissions from Power Sector From power sector 2.4 billion tonnes/y CO2 (US) 5-6 billion tonnes/y CO2 (worldwide) Growing substantially Expected to be by 1/3 rd in US over next 20 years without action to reduce emissions CO2 emissions from electricity generation (blue circles) and other industrial sources

30 US CO2 Storage Options Oil and gas fields 91 billion tonnes (red) Saline formations 3378 billion tonnes (blue) Unmineable coal seams 202 billion tonnes (yellow)

31 FutureGen (Original Project May Be Revived) 245 MW IGCC (gasifies coal to produce hydrogen and CO2) In December 2007 awarded to Mattoon Township, Coles County, Illinois 1 million tonnes CO2 per annum to be stored in saline formation below site Funding canceled in January 2008 because of escalating costs ($1.8 billion gross, 74% from DOE) In March 2009 Secretary of Energy Steven Chu expressed support for reviving FutureGen using stimulus funds Part of a larger portfolio of international demonstration projects Cost now estimated at $2.3 billion

32 FutureGen Original single project program restructured mid-2008 to provide grants to multiple projects ($ million each) Total available around $1.3 billion MW IGCC with Carbon Capture Goal of 90% capture (minimum 81%) CCS demonstration for 3-5 years with monitoring continuing for further 2 years At least 1 million tonnes per year of CO2 at each project Applications closed 8 th October 2008 Start 2015

33 Regional Carbon Sequestration Partnerships Joint government and industry initiative to determine the most suitable technologies, regulations, and infrastructure needed for CCS Geographical differences in fossil fuel use and sequestration sinks across the US dictate regional approaches Seven partnerships: Big Sky Regional Carbon Sequestration Partnership (Big Sky) Plains CO2 Reduction Partnership (PCOR) Midwest Geological Sequestration Consortium (MGSC) Midwest Regional Carbon Sequestration Partnership (MRCSP) Southeast Regional Carbon Sequestration Partnership (SECARB) Southwest Regional Partnership on Carbon Sequestration (SWP) West Coast Regional Carbon Sequestration Partnership (WESTCARB) Network includes 350+ state agencies, universities, and private companies, spanning 41 states, two Indian nations, and four Canadian provinces

34 Hydrogen Energy s IGCC with CCS in California Application for Certification before the California Energy Commission filed 31 July 2008 Located in Kern County (moved from Long Beach) Fuelled by petroleum coke or coke/coal blends 390 MW gross output 2+ million tonnes/y CO2 captured (90%) Used for enhanced oil recovery and storage in Occidental s nearby Elk Hills oil field

35 Business Model Three distinct types of activity Power generation Transportation (pipelines and ships) Storage and EOR Each has their own stakeholders, regulation regime, tax regime, subsidy entitlement How are interests aligned? Business model(s) will evolve over next decade

36 Conclusions CO2 storage is a substantial new business for the oil industry Uses most of our skills but is a significant challenge Is an absolute necessity to make significant reductions in CO2 emissions Opens up the use of vast coal stocks Provides energy security through diversity Enables hydrogen to be used as energy carrier

37 Acknowledgements SPE Distinguished Lecturer Program Senergy for allowing me to participate One day training course Introduction to the Geological Storage of Carbon Dioxide (CO2) Course outline at: