The Future of Carbon Dioxide Injection EOR in the United States

(This article is the first in a periodic series exploring legal issues relating to CO₂ enhanced oil recovery and serves as an introduction to the process. Our next article will focus on issues relating to the regulatory regime for CO₂ transportation.)

Background

In the primary phase of oil production, after a conventional oil well is first drilled, the natural pressure of the oil reservoir, sometimes assisted by pumping, lifts the oil to the surface.¹ When the reservoir’s natural pressure subsides following a well’s initial production, oil producers may extend the life of a well through secondary recovery processes, which usually involve injecting water or gas into the reservoir through a non-production well to increase pressure and direct underground oil to the production well.² These first two phases typically recover 30-40 percent of the original oil in a conventional oil field.³ In the third and final phase, enhanced oil recovery (EOR) techniques can be used to further extend the useful life of a conventional oil well. This final phase can result in recovery of up to 5-15 percent of the oil otherwise trapped in a conventional oil field.⁴

EOR encompasses several tertiary recovery methods to extend the life of multiple wells in an oil reservoir. Generally, EOR methods aim both to increase reservoir pressure and change the properties of the oil, including by altering its density to improve recovery.⁵ This article focuses on one EOR method, the use of carbon dioxide injection (CO₂EOR), one of the most common EOR methods in use by producers today.⁶

CO₂EOR usually requires the producer to inject intervals of compressed, supercritical CO₂ into an oil reservoir.⁷ The CO₂ typically dissolves in the oil, reducing its viscosity or changing its density as it displaces the oil from the reservoir’s porous rock.⁸ Producers then alternate supercritical CO₂ injections with water injections to further direct and drive the oil-CO₂ solution toward the production well.⁹ As above, CO₂EOR can result in a 5-15 percent increase in the production from a well¹⁰ and can extend the productive life of an oil field, in some cases, for decades.¹¹

In 1972, Chevron installed the first large-scale CO₂EOR project in the western Texas Permian Basin in the U.S.¹² By 2013, CO₂EOR contributed approximately 3.7 percent (about 280,000 barrels per day) to U.S. oil production.¹³ Today, there are approximately 70 oil fields in eleven U.S. states located largely in the Gulf Coast, Mountain West and Great Plains, which have employed CO₂EOR technology as a means to enhance oil recovery.¹⁴ The Permian Basin project remains the most productive CO₂EOR project in the U.S. in terms of daily oil production.¹⁵ This use of CO₂EOR in Texas is set to continue. Globally, the U.S. has the highest number of active CO₂EOR projects and ranks first in terms of total oil production from CO₂EOR, accounting for approximately 80 percent of oil sourced globally from CO₂ injection.¹⁶

Other regions are investing in CO₂EOR technology for mature fields as well, although with a relatively small contribution to global production. There are some 140 CO₂EOR projects worldwide that contribute approximately 0.35 percent to global daily oil production, or about 300,000 barrels per day.¹⁷ In 2014, the Asia Pacific Economic Cooperation (APEC) commissioned a review of eight member countries for CO₂EOR potential and estimated the process could incrementally increase recoverable oil resources by 18-78 billion barrels for the countries studied.¹⁸ However, as the review noted, for these APEC countries to increase production from CO₂EOR injection, a steady source of low-cost CO₂, together with a means to transport the CO₂ to oil fields and greater legal certainty, are critical.¹⁹ Additionally, APEC foreshadowed that it will be key for these countries to identify potential CO₂ sources in close proximity to suitable oil reservoirs, to create more responsive policy and legal frameworks, and to create methods to evaluate proposed CO₂EOR projects in order to plan, finance and implement successful proposals.²⁰

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1. Int’l Energy Agency, Storing CO₂ Through Enhanced Oil Recovery: Combining EOR With CO₂ Storage (EOR+) For Profit 9 (2015).
2. Id.
3. U.S. Dep’t of Energy, Office of Fossil Energy, Enhanced Oil Recovery.
4. Int’l Energy Agency, supra note 1.
5. Int’l Energy Agency, supra note 1, at 10.
6. Apec Energy Working Grp., Feasibility Of Accelerating The Deployment Of Carbon Capture, Utilization And Storage In Developing Apec Economies 1 (March 2014).
7. Int’l Energy Agency, supra note 1, at 10-11.
8. Sean McCoy, Int’l Energy Agency, Potential for EOR to Kick-Start Early Projects CCS Projects.
9. Nat’l Energy Tech. Lab., Carbon Dioxide Enhanced Oil Recovery: Untapped Domestic Energy Supply And Long Term Carbon Storage Solution 5 (March 2010).
10. Int’l Energy Agency, supra note 1.
11. U.S. Dep’t. Of Energy, Office Of Fossil Energy, supra note 3.
12. Nat’l Energy Tech. Lab., supra note 9, at 10.
13. U.S. Energy Info. Admin., Annual Energy Outlook 2015, A-28 (April 2015).
14. U.S. Dep’t Of Energy, Office Of Fossil Energy, supra note 3. (See also Nat’l Enhanced Oil Recovery Initiative, 5 Things to Know about CO₂-EOR.)
15. Michael L. Godec, CO₂-EOR to CCS: Prospects and Challenges of Combining CO₂-EOR with Storage, (February 2012).
16. Id.
17. Int’l Energy Agency, supra note 1, at 11.
18. The countries studied include Brunei, People’s Republic of China, Indonesia, Malaysia, Thailand, Mexico, Peru and Vietnam. Apec Energy Working Grp., supra note 6, at ii.
19. Apec Energy Working Grp., supra note 6, at iv.
20. Id. at 110.