A Very Brief Overview of Actual CO2 Marketing, Distribution, Handling and Injection Infrastructure
In the Rocky Mountain and Permian Basin regions of the Continental United States approximately 1.5-2.5 BSCF (85,000-140,000 Tons) of CO2 are purchased daily and injected into oil reservoirs to improve recovery efficiency in commercial enhanced oil recovery projects. Other, similar but smaller, projects exist in South Central Canada, Mississippi and Louisiana. This CO2 is transported cross-country through thousands of miles of DOT regulated large diameter high pressure pipeline from a mix of pure CO2 gas fields and manmade sources. It is handled and injected into the enhanced oil recovery projects through tens of thousands of miles of non-DOT regulated local distribution and gathering infrastructure, thousands of injection and production wells and hundreds of thousands of horsepower of installed compression infrastructure.
Contractual and market making infrastructure exists for both long-term contractual commitments and for short-term “spot” commitments to purchase and sell CO2. An ecosystem of companies, ranging from pure CO2 producers and marketers, pure CO2 flood operators, through DOT regulated middle market transporter/marketing organizations to large independents and majors who have interests in most aspects of the system, exists and is presently flourishing independent of any government subsidies. The operators of these enhanced oil recovery projects spend more than hundreds of millions of dollars annually to purchase, transport and handle this CO2.
These CO2 projects and much of this infrastructure are agnostic with respect to the source of the CO2 that is utilized. As long as the CO2 meets contract specifications for quality and delivery reliability the system can and does use naturally produced CO2 or CO2 from industrial sources interchangeably.
AAPG Search and Discovery Article #90090©2009 AAPG Annual Convention and Exhibition, Denver, Colorado, June 7-10, 2009