EOR Operations-2018

Carbon-dioxide (CO₂) injection is a successful enhanced-oil-recovery (EOR) technology that has been deployed extensively in the Permian Basin of West Texas, enabled by CO₂ mostly produced and transported from naturally occurring CO₂ reservoirs in Colorado and New Mexico.

Further expansion of CO₂ EOR has been limited by the availability of affordable CO₂ rather than the existence of suitable target reservoirs for redevelopment with CO₂ EOR. The US Department of Energy estimates that 67 billion STB of economically recoverable next-generation CO₂-EOR oil exist in US conventional reservoirs, with significant potential identified in other oil provinces around the world.

This situation may be about to change. On 9 February, Congress passed and the president signed into law a budget agreement that included language to expand a 2009 tax credit for CO₂ capture and storage known as 45Q. The key provisions are that, for stored CO₂, the tax credit rises to $50 per tonne in 2027, while, for EOR, the equivalent value is $35. The amounts will be adjusted for inflation after 2026. The tax credit is per tonne of CO₂ captured as long as it can be established that the CO₂ was stored. The tax credit is transferable, hence nontax-paying entities or entities that have no tax liability can benefit from the program. The credit goes to the facility that captures the CO₂ and is available for the first 12 years of operation. There is no cap on the arrangement for the tax-credit projects coming online after 2018 or for which construction has started before 2024.

As a result, the US now has a carbon-pricing mechanism that could well be enough to unlock a wave of innovative CO₂-capture projects and lead to a significant expansion in CO₂ EOR, ultimately leading to new infrastructure, storage sites, and technology improvements that give birth to a CO₂-capture industry.

This Month's Technical Papers

Qualification of Biopolymer in an Offshore Single-Well Test

Multireservoir, Multinetwork Production Optimization of an Omani Reservoir

Horizontal Steam Injectors in the Kern River Field

Recommended Additional Reading

SPE 185526 Surveillance and Initial Results of an Existing Polymer Flood: A Case History From the Rayoso Formation by L.A. Martino, YPF, et al.

SPE 188363 A Field Case Study of an Interwell Gas Tracer Test for Gas-EOR Monitoring by Modiu Sanni, Saudi Aramco, et al.

SPE 185734 Case Histories of Solvent Use in Thermal Recovery by Bita Bayestehparvin, University of Calgary, et al.

Stephen Goodyear, SPE, is manager, gas flood, in Shell’s Improved Oil Recovery/Enhanced Oil Recovery (IOR/EOR) Centre of Expertise. He has 32 years of experience as a reservoir engineer, principally working in EOR. Before joining Shell in 2002, Goodyear worked for an oil and gas consultancy and, over his career, has worked in a wide variety of roles, including in research and field-development planning. He is Shell’s principal technical expert for gas EOR and storage solutions and has a particular interest in next-generation CO₂ EOR projects and carbon capture and storage. Goodyear holds an MMath degree from Cambridge University and a PhD degree in physics from the University of Edinburgh. He is a member of the JPT Editorial Committee and can be reached at stephen.goodyear@shell.com.