New technique pumps out more oil [FT]
By Rebecca Bream
Published: April 26 2007 11:32 | Last updated: April 26 2007 11:32
Carbon offsetting credits are being offered for sale to help support ‘enhanced oil recovery’ projects, in which liquid carbon dioxide is pumped into oil wells to help flush out more oil.
But as these projects aid oil production they also lead to the emission of carbon dioxide into the atmosphere, cancelling out some of the benefits of storing the carbon underground.
Natsource, a US carbon and energy trader, is selling carbon credits to the public via its website to support two enhanced oil recovery projects in the US . The projects, located in Wyoming and Texas, are run by Blue Source, a US specialist in carbon offsetting. The carbon credits cost $4 each and Natsource says that one credit represents one less ton of carbon dioxide being emitted into the atmosphere.
Carbon dioxide has been used for enhanced oil recovery in the US for decades, but in the past companies used naturally-occurring underground reserves of the gas. Since the public awareness of global warming has grown and a market for carbon emissions has developed, oil companies have started looking at the viability of using carbon dioxide produced by power stations and industry instead.
Technology has been developed that can capture carbon dioxide from power plants and refineries before it is emitted and turns it into a liquid, for easier storage. Electricity companies around the world are looking at whether carbon capture equipment can be rolled out on a large scale, allowing them to keep burning fossil fuels without contributing to global warming.
But a big question is where to store the liquid carbon dioxide, and many experts think that old oil and gas reservoirs are the best option. Using carbon dioxide from power plants in enhanced oil recovery both solves the problem of where to store the carbon and helps oil companies extract hard to reach oil, they argue.
With the high oil price, in some cases carbon capture for enhanced oil recovery is commercially-viable without money from the sale of carbon credits.
Bill Townsend, co-founder of Utah-based Blue Source, said that an oil company’s decision whether to use carbon dioxide for enhanced oil recovery was a complex calculation based on the price of oil, the cost of carbon and the geological characteristics of the oil reservoir.
He said that carbon dioxide from power stations and industry was often a lot more expensive than carbon dioxide found underground. But he said that these carbon capture and enhanced oil recovery projects did not always need extra revenue from the sale of carbon credits to be profitable: “It certainly can [be done without the extra revenue], but it depends on the project.”
The selling of carbon offsetting credits for the Blue Source projects is part of a wider campaign by Environmental Defense, the US environmental pressure group, which encourages the public to offset their personal carbon emissions. Environmental Defense does not sell the offsets, but vets the projects and then publicises them on its website.
Mark Brownstein, managing director for business partnerships at Environmental Defense, said that projects approved by his group had sold a total of 873 offsets sold representing 9,350 tons of carbon, or around 750 people’s emissions. As the offsets cost an average of $5, this has raised $4,365 for projects including the two Blue Source enhanced oil recovery projects.
He said that his group did not calculate the amount of carbon produced by the use of the oil recovered from these projects, just the carbon pumped into the wells. |
