Captured CO₂: 80% is Used by the Oil and Gas Industry

Enhanced oil recovery is the primary use for captured CO₂ - subsidized by your tax dollars

Carbon capture and storage (CCS) technology seeks to “mitigate greenhouse gas emissions” by trapping CO₂ from smokestacks and by direct air capture, followed by pumping the CO₂ deep underground. In reality, CO₂ enhances oil recovery as a solvent, by reducing hydrocarbon viscosity and also by displacement of gas and fluids. Source: USA DOE

Carbon capture is a very inefficient process because CO₂ is a trace gas at about 0.04 %, or 4 molecules in 10,000 (about 420 ppm). In the graphic, note the contribution of “human-made” CO₂, orders of magnitude less than “natural” CO₂. For simplicity sake, water is excluded in the graphic.

Preface

Dear Readers, thanks for stopping by again. We start this article with two very simple questions

1. Why would anyone in their right mind use an equivalent or greater amount of energy, typically from fossil fuels, to capture and sequester CO₂ from the air or industrial smokestacks?

2. Why would anyone inject CO₂ underground?

Given the above questions, common sense might also dictate that separating or distilling CO₂ from air would likely be highly inefficient, as CO₂ is extremely dilute in the air at only about 420 parts per million.

One might also surmise that this tiny amount of CO₂ is most likely not a major contributor to global warming, especially when compared to the massive forces exerted by the sun, moon, earth orbit, volcanoes, tectonic shifts, or water in the ocean/land/ice caps/atmosphere. These subjects and the thermodynamic efficiency of carbon capture (10 % on a good day) were covered in this previous article, coauthored by Dr. Gene Nelson of GreenNuke:

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Direct Air Capture: a CO₂ Needle in a Haystack

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In this article we will explore the real reasons for CO₂ capture: that is, despite the high costs and inefficiencies of CO₂ capture, it remains a lucrative business for oil and gas companies and other companies such as Air Products and Linde. Three major reasons are as follows:

1. Carbon credit trading

2. Subsidies from your tax dollars

3. Profitable and legitimate industrial uses

The narrative that CO₂ is causing global warming has warped the CCS free-markets in terms of the 3 items above. Much of the worldwide CO₂ warming scare was catalyzed by the Supreme Court in Massachusetts v. EPA (2007) which ruled that CO₂ is a dangerous pollutant.

The ruling was rubber stamped as USA EPA policy on December 7, 2009, wherein the EPA Administrator signed two distinct findings regarding greenhouse gases under section 202(a) of the Clean Air Act, one of which is presented below:

• EPA Endangerment Finding: The EPA Administrator finds that the current and projected concentrations of the six key well-mixed greenhouse gases—carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF₆)—in the atmosphere threaten the public health and welfare of current and future generations.

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Remarkably, CO₂ is the only “pollutant” that we know of that is required for life on Earth. The other gases listed by the EPA are not required for life on earth.

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The ruling as adopted by the EPA, ultimately gave birth to the profiteering climate industrial complex, which has caused untold damage worldwide for many years to present.

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Capture of CO₂ for Enhanced Oil Recovery

Carbon capture and storage (CCS) is used to enhance oil recovery. CO₂ acts as a solvent, reducing hydrocarbon viscosity and by physical displacement of gas and fluids. Source: USA DOE

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CO₂ Enhanced Oil Recovery: from an Oilman’s Dream to a “Climate Solution”: the process of using carbon dioxide to produce more oil, now known industry-wide as enhanced oil recovery, or “CO₂-EOR”, was born in the oil fields of Texas in the early 1970s. Petroleum engineers from leading oil producers such as Shell, Exxon, and Chevron had discovered that injecting CO₂ at high pressure into “mature” or “previously developed” oil reservoirs helped increase the flow of otherwise stubborn hydrocarbons — in essence squeezing more volume out of aging wells. CO₂ enhances oil recovery by solvation, reducing oil and hydrocarbon viscosity and by displacement of gas and fluids.

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“Of the 32 commercial carbon capture and storage technology facilities operating worldwide, 22 use most, or all, of their captured CO₂ to push more oil out of already tapped reservoirs.” Source: DeSmog.

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Though initial tests found that each ton of injected CO₂ could push out an additional two or more barrels of oil, the lack of readily available CO₂ made the technique expensive. That changed when companies began siphoning off CO₂ emitted from several Texas gas processing plants, and piping it to an oil field to boost productivity. To ensure a steady supply, industry agents scoured the region and purchased the rights to mine naturally occurring CO₂ deposits in Colorado, New Mexico, and Arizona — eventually building hundreds of miles of dedicated pipelines to transport the gas to oil-field injection points. 

By the late 1970s, amid growing concerns over what was then known as the “greenhouse effect,” industry executives began to propose that capturing CO₂ and burying it underground could allow the world to continue generating power from fossil fuels far into the future. In 1992, the Paris-based International Energy Agency (IEA) and other energy organizations established a research program to support developers seeking to prove CCS at scale. 

By the time of the first U.N. climate conferences in the mid-1990s, the oil industry had begun marketing carbon capture as a technological “silver bullet” capable of making coal “clean,” and rendering oil and gas as “low carbon” — a strategy employed by oil majors to this day.

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Since the 1970s, billions of barrels of oil, once thought unrecoverable, have been extracted using CO₂-EOR. Source: Denbury (Exxon)

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Captured by CO₂, Brought to You by the USA Department of Energy

Above: approximately 80 % of commercial carbon dioxide is used for enhanced oil recovery. Source: USA DOE NETL.

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Two Examples of Carbon Capture and Storage Operations for EOR: Exxon and Kinder Morgan

Above: note diverse ExxonMobil CCS site workers.

Above: Exxon CCS-EOR facilities are conveniently located in oil rich areas of extraction.

From ExxonMobil:

Our carbon capture and storage (CCS) network can help reduce carbon dioxide (CO₂) emissions for key industries in the U.S. Our combined assets now include:

• More than 1,500 miles of CO₂ pipeline owned and operated – largest in the U.S.

• Multiple strategically positioned storage sites across the U.S. Gulf Coast

• The potential to reduce CO₂ emissions by >100 million metric tons a year

• Current capture capacity of 9 million metric tons per year.

We have cumulatively captured more CO₂ than any other company – 120 million metric tons – accounting for approximately 40 percent of all the anthropogenic CO₂ that has ever been captured.

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Above: James Dean greeting his people in the iconic film Giant.

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Kinder Morgan CO₂ SACROC Unit located in West Texas. Source: Kinder Morgan.

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From: Kinder Morgan

Kinder Morgan CO₂ Company is the largest transporter of carbon dioxide in North America, transporting approximately 1.2 billion cubic feet per day of CO₂ from our source fields in Southwest Colorado to New Mexico and West Texas for use in enhanced oil recovery (EOR) projects. The CO₂ helps unlock and recover crude oil from mature oil fields and residual oil zones.

We use a good portion of this CO₂ in our own EOR projects, and we sell CO₂ to third-party customers. On the production side, we produce over 50,000 barrels of oil per day, much of which comes from our large SACROC Unit in the Permian Basin of West Texas. We use a long-term hedging strategy to mitigate risk and generate more stable prices from our oil production.

A key asset, the SACROC Unit located in West Texas, is one of the largest oilfields and one of the oldest operating Carbon Capture and injection projects in the U.S. At the time of this project the SACROC Unit processed over 620 MMSCF/d of gas for CO₂ capture and injection while recovering over 30,000 bbl/d of oil and 15,000 bbl/d of NGL liquids. Currently the SACROC Unit processes nearly 1 BSCF/d of gas for CO₂ capture and injection.

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Carbon Capture Will Extend Oil Production by 84 Years, Industry Study Finds From: DeSmog

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Wild Bonanza of Tax Dollars and Credits for America’s Carbon Capture

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Courtesy of the USA taxpayers: tax credits for the sequestration of “carbon oxide”, per section 45Q of the Internal Revenue Code

The Inflation Reduction Act (IRA) enhanced and expanded the Section 45Q tax credit by increasing the tax credit value, extending the construction deadline, and lowering the qualification threshold.

Specifically, the IRA increased the tax credits available under Section 45Q to $85 per metric ton for captured carbon that is stored in geologic formations, $60 per metric ton for the use of captured carbon to produce low and zero carbon fuels, chemicals, building materials, and other products, and $60 per metric ton for captured carbon that is stored in oil and gas fields, all assuming the wage and apprenticeship requirements are met.

In addition to extending the date by which construction must begin by seven years to Jan. 1, 2033, the IRA significantly reduced the amount of carbon oxide (generally, carbon dioxide) that a facility must capture to be eligible for the tax credit under Section 45Q.

Previously, electricity generating facilities were required to capture at least 500,000 metric tons per year, and industrial facilities were required to capture at least 100,000 metric tons per year. The IRA reduced those thresholds to 18,750 metric tons per year and 12,500 metric tons per year, respectively. These lower thresholds may open up new opportunities for entities that were previously scaled out. Source: Reuters.

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Pilgrims can claim their carbon oxide tax credit here.

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Tracking Taxpayer Subsidies and Government Credits for Carbon Capture

Above: Governments have spent over $20 billion – and have legislated or announced policies that could spend up to $200 billion more – of public money on CCS, providing a lifeline for the fossil fuel industry.

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Conclusions

1. Carbon capture and storage is a highly inefficient process, perhaps less than 10 % thermodynamic efficiency.

2. To make carbon capture and storage “profitable”, tax credits and other incentives are used.

3. CO2 injection or “storage” is a useful method to recover oil and gas from non-productive and moribund wells. Billions of gallons of oil have been recovered using CO₂.

4. 80 % of all CO₂ is used by the oil and gas industry for enhanced recovery.

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CO₂ - EOR Clickable Tidbits

1. The Inflation Reduction Act Includes a Bonanza for the Carbon Capture Industry

2. Biden-Harris Administration Announces $3.7 Billion to Kick-Start America’s Carbon Dioxide Removal Industry

3. Carbon Capture Will Extend Oil Production by 84 Years, Industry Study Finds

4. How Carbon Capture and Storage Projects Are Driving New Oil and Gas Extraction Globally 

5. Companies capture a lot of CO2. Most of it is going into new oil.

6. California hopes to fight global warming by pumping CO2 underground. Some call it a ruse

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Extra CO₂ Bonus Section

Above: CO₂ instant ice cream gains patent: A newly patented process using pressurized carbon dioxide can create instant ice cream.

Above: the Iconic.

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Insomnia? Here You Go

Carbon Capture And The Inflation Reduction Act

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The Section 45q Tax Credit For Carbon Sequestration

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DownloDetailed PDFs, IRS 45q and IRA.