ethanol co2 for eor, history, challenges, and opportunity• combustion of 1 barrel of oil yields 8...

Capturing Value from Biogenic CO2, Aug 2, 2017, Des Moines, IA

EthanolCO2forEOR,History,Challenges,andOpportunity

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Martin K. DuboisImproved Hydrocarbon Recovery, LLC,

In collaboration withKansas Geological Survey

Possible?


Outline

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1. CO2 and EOR primer2. Kansas examples

• Pilot projects• Commercial projects• Projects not implemented

3. Opportunities and risks4. Costs, Value Chains and Risks

Ø Challenges and risks


CO2 conversions, scales and “green” oil

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How green is anthropogenic CO2 EOR?• Combustion of 1 barrel of oil yields 8 mcf CO2• For every barrel of oil produced 5-7 mcf CO2 is permanently

left in the reservoir• 25% the carbon footprint of the usual barrel of oil

CO2 production at varying scales• An average human exhales 5.6 mcf CO2/ yr, 0.26 tonnes/yr• Ethanol plant (55mgy) – 8.3 mmcfd, 0.16 million tonnes/yr • Jeffrey Energy Center – 12.5 million tonnes/yr

Units/volumes• 1 ton CO2 = 17.2 mcf• 1 metric ton CO2 = 19 mcf• 1 gallon ethanol yields 6.624 lbs CO2


CO2 – the magical fluid

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CO2 Phase Diagram

Modified after Condren www.cbu.edu/~mcondren/CO2_phase_diagram.jpg

Kansas Reservoirs

(BHP & BHT)

• Miscible floods must operate at greater than supercritical (1073 psi) and MMP (>1200 psi)

• Kansas reservoirs ambient properties range: 400 psi and 85F at 1000 ft and 1600 psi and 125 F at 6000 ft.

Pleasant PrairieDavis Ranch/John Creek


CO2 Volume with Depth (P&T)

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Source: IPCC Special Report on Carbon

Dioxide Capture and Storage, 2005

3281 ft

1640 ft

4921 ft

CO2 Processing Styles

Kuuskraa, 2008

Kinder Morgan website

Horizontal (piston) flood • Application: Follow waterfloods • KS targets: L-KC, Bartlesville,

Morrow, Chester• Well documented

Gravity-stable flood• Application: bottom-water

drive reservoirs • KS targets: Arbuckle,

Simpson, Viola• Fewer analogues

Capturing Value from Biogenic CO2, Aug 2, 2017, Des Moines, IA6


Current (2009) Pipeline Network

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• 34Mt/year of CO2 are injected in 72 U.S. EOR projects, most of them West Texas.

• Up to 9.5 Mt/yr of pent-up demand in the Permian Basin alone

• Kansas demand could be ~ 3-4 Mt/yr.

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CO2 EOR in KansasKansas Ethanol Plants (2008)

Blue – active, Tan - planned

Chapparal buys Arkalon Ethanol CO2

for Okla. EOR

2009

Petrosandtander injects Bonanza Ethanol CO2 inStewart field

2012

Berexco and KGS inject CO2 into Wellington field

in DOE pilot study

2015

KCC denies pooling request for commercial

Hall-Gurney flood

2015



Kansas Ethanol CO2 EOR Projects

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• Two pilot projects• Two commercial operations• Several ideas that did not make it

Ø Challenges and risks

ICKan Kick-off Meeting, Feb 14, 2017, Lawrence KS

Murfin’s Hall Gurney (Russell) Pilot (2005)DE-AC26-00BC15124

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• Injected 1398 mmcf (74k tonnes CO2)• Produced an estimated 27.9 mbo incremental oil


Berexco’s Wellington Pilot (2016)DOE-FE-006821

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• Injected 374 mmcf CO2 (19.8 tonnes) over 165 days through June 2016

• Incremental oil produced ~9950 bbls through March, 2017


Kansas Commercial Project - Bonanza

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PetroSantander’s Stewart Field Project

• Conestoga’s 55 MGY Bonanza plant Garden City, KS

• 15 miles to Stewart oil field• Operational since 2012 • Captures ~ 100,000 t CO2

annually

Conestoga report, 2016


Kansas Commercial Project - Arkalon

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• Conestoga’s 110 MGY Arkalon plant, Liberal KS

• Started in 2009

• 210 k tons/yr to Chaparral’s Booker and Farnsworth fields, Texas Panhandle


Two projects did not make it

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U.S Energy Partners and C12 Energy, LLC, 2015• 55 MGY plant 10 miles to Hall Gurney field• Unitization application denied by Kansas Corporation Commission

Kansas Ethanol, LLC (Lyons, KS) and CAP CO2, LLC, 2010• 55 MGY plant 15 miles to

Geneseo oilfield• Three reasons

1. Not funded in DOE Phase II2. Drop in oil prices3. Geologic risk


Challenges and Risks

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Challenges1. High, non-recoverable capital costs

• Capture & Compression• Pipeline• Prepare oil field for CO2

2. Small fields, disparate minerals and lease ownership3. Unitization challenges

Risks1. CO2 source risk2. Geologic reservoir risk

For the typical business model• Point-to-point• Oil operator owns/builds capture, compression, pipeline and

owns the field• Ethanol producer paid for raw CO2 at the fermenter


Answer? Sharing the risk and spreading the wealth

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1. What are the costs?

2. What is the Value Chain?

3. Just how big is the prize?


By the Numbers

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55MGY 110MGY

CO2(tons) 182,160 364,320 Plantoutput

DirectCO2Revenue($M) $1.2 $2.4 Sellat$6.50/tonRaw

OilProduction(bbls) 392,327 784,654 2.2bbloil/tonCO2

OilRevenue($M) $16.3 $32.6 $41.50/grossbbloil

PlantSize

CapitalandOperatingCosts($Million)CapX(Capture/Compress) $12.4 $15.3 Privateengineeringstudy(2008)

OpX(annual) $1.4 $2.8 Privateengineeringstudy(2008)

CapXPipeline(15mi) $10.5 $11.6 DE/NETLCostModel(2011)

OpX(annual) $0.24 $0.21 DE/NETLCostModel(2011)

Costsdonotincludefinancecostsandprofitmargin


By the Numbers – 20-yr life

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Life-CycleNumbers(20yrs) 55MGY 110MGY

CapX+OpXCost($M) $56.0 $87.6

CapX+OpXCost/ton($) $15.37 $12.03 ($0.89and$0.70/mcfCO2)

CO2Revenue($M) $23.7 $47.4 Sellat$6.50/tonRaw

OilRevenue($M) $325.6 $651.3 $41.50/grossbbloil

Costsdonotincludefinancecostsandprofitmargin

PriceAdjustmentsand/orTaxCredits(peryear)LCFS/RINspread(current) $11.0 $22.0 $0.20/gallon

LCFS/RINspread(future?) $27.5 $55.0 $0.50/gallon

StorageTaxCredit(current) $1.8 $3.6 45Q@$10/tonEOR

StorageTaxCredit(proposed) $6.4 $12.8 45Q@$35/tonEOR($Million)

California Market

California Market


Monetizing Ethanol CO2

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What are the current opportunities? (RIN, LCFS, CARB)

What if there was a point-to-point EOR opportunity

Trade for opportunity by taking some of the risk?

What if there was an opportunity to gather CO2 from many plants and ship it to the oil patch?


Very Large Project

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IA,NE,KSIL,MN,SD,ND

Ethanol(MGY) 6187 4171 10,358

CO2(Mtons/yr) 20.5 13.8 34.3

Ethanol and CO2 for 7-state area

From 32 plants (4,171 MGY)Gather and transport 12.2 MtDeliver to oil fields in NE, KS, OK, TX

Costs and benefits currently under study

(EIA 2015)


More Discussion?

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ethanol co2 for eor, history, challenges, and opportunity• combustion of 1 barrel of oil yields 8...

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